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ACA: New Dodgers Owners Must Be Expecting Higher TV Fees

American Cable Association President and CEO Matthew M. Polka, in a statement responding to reports that the Los Angeles Dodgers sold for a record $2.15 billion, the highest price for any North American sports franchise in history, said he believes the new team owners must expect they can obtain a substantial increase in TV rights fees or else they wouldn't have spent so much.

"As news reports have made plain, the Dodgers new ownership group must believe it can obtain significantly more money for the rights to televise Dodger games in the future than the team receives today.  According to the Los Angeles Times, the Dodgers could create their own regional sports network (RSN) or complete a new long-term TV rights deal worth between $200 million and $300 million annually -- compared to $38 million this year - with an overall price tag of $4 billion.  In either case, consumers of cable and satellite TV can expect to see their monthly bills continue to move higher," Polka said.

ACA has stated on many occasions that across America -- not just in L.A. -- the fundamental problem is that programmers refuse to give pay-TV operators the flexibility to provide their customers who have absolutely zero interest in sports - who are, after all, the majority of viewers - the right to bypass expensive sports channels that are driving up their pay-TV bills.

"The inability to provide an opt-out remedy is also true with regard to local TV stations, especially the affiliates of CBS, NBC and FOX, which are demanding higher and higher carriage fees from pay-TV providers to help their parent networks pay the $27 billion owed the National Football League under new TV rights packages announced last December," Polka said.

The L.A. Times also reported that the wholesale price alone for sports TV programming in the L.A. market is fast approaching $14.40 a month for each subscriber. For some context, the Federal Communications Commission's most recent cable rate survey stated that cable subscribers pay between $49.51 and $54.44 on average nationally for the expanded basic programming package that includes regional sports channels and such national brands as USA Network, TBS, Fox News Channel, ESPN and MTV.

In a related development, Bloomberg News reported that News Corp. is planning on launching a national U.S. sports channel to rival ESPN, the most expensive channel on expanded basic at about $5 a month. More competition among programmers to acquire national sports rights will drive up the costs of these rights, and, as night follows day, these costs will be passed through to nearly all consumers because powerful programmers deny cable operators the flexibility to design packages aimed at sports-viewing consumers.

"It wouldn't take much to give consumers a break. How about giving cable and satellite providers the option of offering expensive networks that include sports on a separate tier?  This could inject badly needed discipline into a market that just seems to slam consumers with runaway sports programming costs," Polka said.

 

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