The attorney general of New York State is adding her voice to a growing chorus of critics demanding rebates from pay-TV operators of hefty sports programming fees during the COVID-19 time-out for sports.
It is “grossly unfair that cable and satellite television providers would continue to charge fees for services they are not even providing,” New York Attorney General Letitia James said. “These companies must step up and immediately propose plans to cut charges and provide much needed financial relief.” She added that she has written letters spelling out this demand to a range of pay-TV providers with New York customers.
In recent days, restless fans have come to realize that they continue to pay premiums for sports even though no games have been played in much of the world since mid-March due to the pandemic. There is no clear end in sight for the sports shutdown, though it appears that by June some major events could resume, and Major League Baseball and NBA teams have indicated a possible summer return.
Networks like ESPN, broadcasters like CBS and NBC and regional networks like YES charge MVPDs substantial fees stemming from multi-billion-dollar sports licensing deals. Distributors like Comcast, Charter, Dish Network, AT&T and Verizon, in turn, pass the cost on to their customers.
James estimates that customers are paying an average of $20 per month for sports programming, and in the past two months have received all but nothing. ESPN’s live coverage of the NFL Draft and its broadcast of Michael Jordan documentary series The Last Dance have drawn big ratings but can’t be considered live sports. Other networks have filled their programming days with reruns of past classics.
With the economy reeling due to the pandemic, major pay-TV providers have also been appealing to programmers to offer them rebates or make-goods. As customer complaints have proliferated on Twitter, TV providers have tried to emphasize their view that they are caught in the middle. “Once the NBA, NHL, and MLB announce the course of action for their seasons, including the number of games that will be played, Xfinity could receive rebates or price adjustments from the regional sports networks,” read one response from Comcast Xfinity’s support account.
Wall Street analysts have also highlighted the tensions in recent days, noting that earnings calls to be hosted in the coming days by Comcast, Disney, Dish, Charter and others will likely feature the issue.
Rich Greenfield, an analyst with Lightshed Partners, estimates that most U.S. pay-TV customers are paying about $40 to $50 a month for sports programming “that they are not actually receiving.” In the past decade, Greenfield wrote in a blog post, “sports programming costs have risen to absurd levels, damaging the price/value of the multichannel video bundle and helping to accelerate cord-cutting/cord-shaving. … But charging exorbitant fees for sports networks without sports takes the absurdity to a whole new level, especially during a global pandemic/recession.”
Here is a tweet from James:
And here is a response to a customer by the support account of Xfinity, Comcast’s main video and broadband service: