DirecTV has made it official: They will be carrying the Time Warner Cable SportsNet and Deportes channels beginning almost immediately much to the relief of their subscribers who are Los Angeles Lakers fans.
That includes the office of the L.A. Lakers, which has big screens all over the space tuned to DirecTV (and more recently to Time Warner Cable).
After weeks of tough negotiations, even as some of their private and commercial customers looked at switching services to get the Laker games, the two sides came to an agreement. While the terms have not been disclosed, it is widely believed Time Warner Cable got pretty much what it wanted – carriage on the most basic tier and $3.95 per sub per month in the Laker coverage area which reaches about 1.3 million homes.
That covers Los Angeles, San Diego, Bakersfield and parts of Fresno as well as Santa Barbara and Ventura counties, Las Vegas and Hawaii.
"DIRECTV is pleased that Los Angeles Lakers, LA Galaxy and Los Angeles Sparks games and programming will now be seen by so many people whose loyalty remains the life's blood to each team," said Dan York, DirecTV’s chief content officer. "We appreciate our customers’ patience and are happy to have arrived at an outcome that benefits everyone involved. We know that our customers will enjoy the great programming of these three franchises for many years to come.”
Time Warner Cable has now made a series of deals that fulfill the vision the New York-based multiple system operator laid out when it risked $3 billion on buying the Laker broadcast rights for the next 20 years. They later added the L.A. Galaxy and Sparks as well as sports focused programming to fill out the year around lineup.
This wasn’t just another deal. TWC does not do much other programming. They bought these rights as a hedge against the rapid inflation of sports rights, especially for regional networks like the two they created (one in English, one in Spanish). TWC has said they don’t plan to do other programming.
It also meant that TWC had to go out and make deals with their arch competitors, the same services that they compete with head-on for subscribers and advertisers day in and day out.
TWC played hardball in the negotiations. Their business plan required the high sub fee but it also demanded the basic tier so that they can sell advertising during games based on the highest possible audience reach in their markets. They signed on competitors Cox, Charter, Verizon Fios, AT&T, Bright House Networks and others.
The only holdouts are Comcast, which has a relatively small footprint in the market, and Dish, which has made it clear they will not pay a high price for regional sports networks which would have to be passed on to their customers.
This is part of a transformative strategic decision made by TWC in the past couple years. It was only in 2009 that Time Warner, the company that owns Warner Bros. and CNN, spun off their cable system operations because they were seen as capital intensive and slower growing than the cable networks.
The launch of Time Warner Cable SportsNet and Deportes follows another major move in sports, the creation of the Pac 12 Networks, and acquisition of many of the most important rights to college games. While the DirecTV deal means Lakers will soon be on the satellite, the University of Southern California’s traditional rivalry against UCLA is still mostly just available on Time Warner Cable.
This year TWC also added the NFL Network and the companion Red Zone channel after years of refusing to carry it over the same issue that DirecTV raised in the Lakers talks – price. The NFL wanted a high price and TWC didn’t want to pay it. This year the NFL beefed up their package with more Thursday night games and the two sides finally merged.
In a conference call with stock market analyst when it announced third quarter earnings last week, TWC’s Rob Marcus said they have “made major strides in making our sports offerings more compelling and more competitive.”
- Sports & Recreation
- Los Angeles Lakers
- Time Warner Cable
- Los Angeles
- Time Warner