Time Warner Cable has struck a game-changing TV deal with the Lakers to create two new regional sports channels — one in English and one in Spanish — that will use the world champions as their backbone.
The 20-year agreement, which kicks off with the 2012-13 season, covers all preseason, regular-season and postseason games that are not nationally telecast.
The marriage of the Lakers and Time Warner Cable is a major blow to Fox Sports West and KCAL-TV, the current rights holders. It is also bad news for Lakers fans who don't subscribe to a pay-TV service, because no games will be available for free on over-the-air television once the Time Warner Cable deal takes effect. About 620,000 homes do not have a subscription to a pay-TV provider.
There had been rumblings that the Lakers were looking to start their own channel or find a new partner when Time Warner Cable came calling soon after the exclusive negotiating window Fox Sports had with the Lakers expired at the end of last year.
"The courtship happened quickly," said Tim Harris, senior vice president and chief marketing officer for the Lakers, who acknowledged the team did consider going solo on its own network.
Terms of the deal were not disclosed. Under its deal with Fox Sports West, the Lakers were getting about $30 million a year in rights fees, people familiar with the situation said. Some industry observers pegged the new 20-year pact at a value of $3 billion, although Time Warner Cable dismissed that figure.
In a statement, Fox Sports said it had made the Lakers an offer that "would have paid them one of the highest local TV rights fees in professional sports. We did not believe that going higher was in the best interest of our business or pay-TV customers in Los Angeles, who will bear the cost of this deal for years to come."
A spokesman for KCAL said the loss of the Lakers will not stop the channel from making "local sports a big part of the station's identity."
Broadcasters Joel Meyers and Stu Lantz, who handle all of the televised Lakers games, are employed by the team.
Time Warner Cable, which has about 2 million subscribers in Southern California, isn't looking to stop with the Lakers. Melinda Witmer, executive vice president and chief programming officer of Time Warner Cable, said the company would be "looking at all available sports in the marketplace."
Next on their wish list could be the Dodgers. The team's pact with Fox's Prime Ticket expires in 2013. The Angels also have a contract with Fox Sports West, but that arrangement has many years to run. Fox Sports also broadcasts the Kings and Ducks.
According to court documents, Frank McCourt had intended to launch cable channels dubbed "DTV: Dodger Television" in English and Spanish. Dodgers spokesman Josh Rawitch declined to comment on how Monday's news might affect those plans.
"It opens up a heck of a lot more what-ifs," said sports industry consultant Andy Dolich, a former top executive with the Oakland Athletics and Memphis Grizzlies.
For Time Warner Cable, snagging the rights to the Lakers and creating two channels is a shift in strategy. While many cable operators, including Comcast, Cox and Cablevision, are major players in the regional sports channel business, Time Warner Cable has pretty much stuck to the sidelines. However, Witmer said the move to get into business with the Lakers is part of its overall desire to "control our economic destiny."
The challenge will be getting other distributors to carry the Lakers. Regional sports networks are among the most expensive programming for distributors, costing more than $2.50 per month per subscriber, according to industry estimates. Given the cost of landing the Lakers, Time Warner Cable will probably be looking for more than $3.50.
First stop will be DirecTV, which has about 1 million subscribers in the area. Other distributors include Charter Communications and Cox Cable. Fox Sports West, meanwhile, will face pressure from distributors — including Time Warner Cable — to lower its prices because it would no longer have the area's marquee property.
Times staff writer Bill Shaikin contributed to this report.