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Rising sports programming costs could have consumers crying foul

Nearly half of the monthly cable or satellite bill goes to sports channels. Escalating prices are triggering worries that subscribers will start walking away.

December 01, 2012|By Joe Flint and Meg James, Los Angeles Times

As a result, cable and broadcast channels that specialize in sports are able to command higher subscriber fees from pay-TV distributors. Walt Disney Co.'s ESPN gets more than $5 a month for each subscriber, from the systems that carry it, according to the media consulting firm SNL Kagan. Time Warner Cable is getting almost $4 a month per subscriber for SportsNet. Prime Ticket and Fox Sports West, which carries the Angels, together cost about $5 per subscriber, per month.

Those prices are higher than those for non-sports channels. The Disney Channel, for example, gets only about $1, while Viacom's popular MTV gets only 40 cents.

Some consumers, frustrated at the bigger bills, want more say in what they are buying.

"Why can't I just pick and choose which channels I want?" asked Ben Hoyt, a 34-year-old video game producer from Hollywood who gets Time Warner Cable service. "We're forced into pricing models that don't allow us to speak with our wallets."

The idea of offering channels on an "a la carte" basis used to be sacrilege to the industry. Executives argued it would not lower prices because networks would just charge more to make up for the loss of subscribers.

But now some cable and satellite operators think it's time to go down that road with sports.

"I wish Time Warner Cable would give me the option to offer SportsNet as a choice for my customers," said David Shull, senior vice president of Dish Network. "I would do that deal in a heartbeat."

The odds of a change to la carte are long. The majority of the national and local sports channels are owned by a handful of media giants who like the current system and have the leverage to make distributors accept it.

"Our efforts are totally frustrated by this cabal of a half-dozen media giants," said Bob Gessner, president of Massillion Cable, an Ohio-based operator.

Analyst Craig Moffett said that the Dodgers deal could put the pay-TV business in a precarious position.

"For some consumers, this Dodger channel will be the straw that breaks the camel's back," the Sanford C. Bernstein & Co. media analyst said. "Everyone in the television industry will be watching to see what happens in L.A."


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