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Sports Broadcasting Technology

Dodgers Fans May Have Reason to Smile; Time Warner Cable Agrees to Arbitration

July 29, 2014


Though this summer has proven somewhat depressing for some who were looking forward to a ton of hot weather and all that comes with it, it's still summer, and will be for about another seven weeks. Baseball is one of the biggest parts of summer, though for a while, even baseball was looking a bit threatened by recent developments between Time Warner Cable and DirecTV (News - Alert) over matters related to Dodgers baseball. But a new development in the matter should inspire a note of confidence as Time Warner Cable says it's ready for arbitration.

The issue came in some wrangling between Time Warner (News - Alert) Cable and DirecTV, at last report, over pricing for SportsNet LA, a channel which the Dodgers organization actually owns and only launched earlier this year. Time Warner Cable, meanwhile, landed the distribution rights for SportsNet LA in what was reportedly an $8.35 billion deal extending over the next 25 years. Thus, Time Warner Cable began shopping around the SportsNet LA feed to the other cable providers, and reports suggest that was when the trouble began. Some networks are reportedly quite unhappy with how much Time Warner Cable is asking for the ability to carry SportsNet LA, with reports indicating a rate of $4 a month per subscriber, and the price only goes up from there through the rest of the deal's length. Reports from March suggest that ESPN landed $5.54 per subscriber, and even the Disney (News - Alert) Channel only gets $1.15. But that was when Congress got involved.

Reports suggest that a group of Congressmen led by Sherman Oaks Democrat Brad Sherman urged the parties involved to enter binding arbitration to determine pricing and terms, and that in the meantime, Time Warner should make SportsNet LA available to all pay-TV subscribers, with the amount to be paid payable after arbitration settled the matter. A DirecTV spokesman offered up a bit of comment on the matter, saying “Rather than force everyone to bail Time Warner Cable out, the simplest solution is to enable only those who want to pay to see the remaining Dodger games to do so at the price Time Warner Cable wants to set.” The spokesman also noted that non-fans should not be asked to pay for the “excess” demanded by Time Warner Cable.

In one sense, it's important that Time Warner Cable be able to set prices. After all, it arranged the deal and paid the money to carry the games, so it should be able to charge what it likes to air. It didn't make this deal for its health; it made this deal to make a profit. But Time Warner Cable has forgotten one critical point: it can charge what it likes, but it can only reasonably expect to receive the price the market will pay for it. The problem with baseball games is that there are many substitute goods around; don't want to watch baseball? Watch a television series instead. Watch a movie, or a play. Read a book. Go to a concert. E-sports is a rapidly growing field, and may be even better than baseball.

There are a panoply of options available, and though only Dodgers baseball is Dodgers baseball, charging a sufficiently high price that no one wants to pay it only serves to shoot Time Warner Cable squarely in the foot.  Perhaps arbitration will get the two sides of this affair to a reasonable compromise, and hopefully, before the season ends for the year.

Edited by Maurice Nagle