The Lakers may not have Phil Jackson, but at least they have DirecTV.
Ending a long standoff, satellite broadcaster DirecTV has reached an agreement to carry Time Warner Cable's SportsNet, which is the new television home for the Lakers. As part of the pact, DirecTV also is carrying Deportes, the Spanish-language sister channel of SportsNet. DirecTV subscribers began receiving the channels Thursday afternoon.
Lakers fans who have DirecTV won't be the only ones cheering the decision. Many bars and restaurants with DirecTV have seen their businesses take a hit without having Lakers games on the big screen. However, down the road it could mean bigger bills for subscribers as DirecTV looks to pass on the costs of the accord.
For Time Warner Cable, getting the DirecTV deal done removes its biggest headache. Having DirecTV, with its 1.7 million subscribers in Southern California, onboard is crucial to the long-term success of SportsNet.
"We appreciate our customers' patience and are happy to have arrived at an outcome that benefits everyone involved," said Dan York, chief content officer for DirecTV. Other distributors carrying the channel include Cox Cable, Charter, Verizon FiOS and AT&T U-Verse.
Though neither the terms nor the length of the deal was disclosed, Time Warner Cable was seeking as much as $3.95 per subscriber, per month, for the two channels. That is a very high price tag even for a regional sports network. The YES Network, which carries the New York Yankees, charges about $3 per subscriber, per month, according to SNL Kagan, an industry consulting firm.
Programming deals typically run five to seven years, which means fans shouldn't have to worry about being held hostage again for a little while. Time Warner Cable has the rights to the Lakers for the next 20 years and is paying an average of $150 million per season, according to people familiar with the contract.
With DirecTV out of the way, the last hurdle for Time Warner Cable is Dish Network, the satellite broadcaster that has about 850,000 subscribers in the region. Dish is a tough negotiator, and so far little progress has been made in talks. However, now that everyone else is onboard, Dish may think it needs the channel to avoid being at a competitive disadvantage in the market.
Per the agreement, DirecTV is making SportsNet and Deportes available to all of its subscribers. DirecTV initially wanted to put the channel on a specialty tier that subscribers would have to request to see. Time Warner Cable was greatly opposed to that approach because it would limit revenue from subscription fees and advertisers.
Now that Time Warner Cable has its distribution issues nearly wrapped up, it will probably start eyeing other sports properties. Its biggest fish is the Dodgers, whose agreement with Fox Sports' Prime Ticket channel expires at the end of next season. Fox Sports is currently in exclusive negotiations with Guggenheim Partners, the new owner of the Dodgers. That window is up at the end of the month, and if no deal is reached, Time Warner Cable has made no secret that it would be interested in getting the rights to the Dodgers.