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Analysis

Fox could score points if it lowers price for Prime Ticket

January 31, 2013|By Joe Flint
  • The Dodgers will be off of Prime Ticket after the upcoming season.
The Dodgers will be off of Prime Ticket after the upcoming season. (Associated Press )

Now that Time Warner Cable has beaten Fox Sports for the TV rights to the Los Angeles Dodgers, it's time for the loser to make a dramatic move in retaliation.

And that should be lowering the price of its Prime Ticket cable channel next year after it stops carrying the Dodgers.

After all, the Dodgers are the channel's marquee property and without them, ratings for Prime Ticket will take a hit. The fee for Prime Ticket to distributors such as DirecTV and Time Warner Cable is about $2.50 a month per-subscriber, according to industry research firm SNL Kagan.

Odds are, though, Fox Sports will do what it can to resist lowering that fee. Insiders there are already floating the idea of moving some Angels and Clippers games off of its Fox Sports West channel to Prime Ticket to not only fill the void left by the Dodgers' departure but to justify keeping the price tag.

While the contracts Fox Sports has for Prime Ticket likely contain clauses protecting pay-TV distributors from paying more for less, programmers are experts at finding ways to weasel out of such provisions. Fox Sports has so many channels around the country (more than 20) and other assets, it can easily do some horse trading here and there that would allow it to keep Prime Ticket's high fee at the current rate.

So why even suggest that Fox Sports lower the fees if it is so unlikely to happen? Because it is a good public relations move for the company at a time when consumers are getting tired of being gouged by their pay-TV operators and program suppliers.

Fox Sports and its parent News Corp. have been privately ripping Time Warner Cable for shelling out so much money for the Dodgers (between $7 billion and $8 billion over 25 years) and driving up the cost of sports for everyone. No doubt Time Warner Cable's aggressive moves in Los Angeles and elsewhere are leading to higher pay-TV bills for consumers.

Indeed, there is some hypocrisy on Time Warner's part here. In San Diego, the company bid aggressively for rights to the Padres but lost to Fox Sports. Now the cable company refuses to carry the channel because it says it is too expensive.

Instead of complaining, though, Fox Sports could score some major points with consumers, distributors and lawmakers by going public and saying it refused to overpay for the Dodgers and will lower the price it charges distributors to carry Prime Ticket. This will not only make the Dodgers look greedy, it will also force Time Warner Cable and others to make sure those cuts end up back in the pocket of the consumer.

The brass at Fox Sports and its parent News Corp. will likely laugh this idea off. After all, no one lowers prices voluntarily and Wall Street would think they've lost their mind.

But with many consumers already priced out of going to the ballpark, the rising cost to watch games on TV is becoming a real issue. It is only a matter of time before some lawmakers and regulators start poking around the industry and start holding hearings. Fox Sports would be smart to take the long view on this one and be the good guys.

ALSO:

Dodgers and Time Warner Cable finalize TV deal

Fox will keep Prime Ticket going even without the Dodgers

Cable channels are valuable real estate regardless of tenant

Follow Joe Flint on Twitter @JBFlint.

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