Time Warner sweetens deal again for Dodgers TV channel; no takers

Because of a carrier dispute, many Los Angeles Dodgers fans will miss broadcaster Vin Scully’s final season at the microphone. ... Scully looks on before a spring training broadcast on Friday, March 25, 2016 in Glendale, Ariz.
Because of a carrier dispute, many Los Angeles Dodgers fans will miss broadcaster Vin Scully’s final season at the microphone. ... Scully looks on before a spring training broadcast on Friday, March 25, 2016 in Glendale, Ariz. The Arizona Republic via The Associated Press

In a last-ditch effort to strike a deal before the start of the baseball season, Time Warner Cable has once again sweetened an offer to other pay-TV providers in hopes of winning wider carriage for the Los Angeles Dodgers’ TV channel in Southern California.

But Time Warner Cable still has no takers – increasing the likelihood that Monday will mark the start of a third season without any movement in the bitter stalemate over distribution of SportsNet LA, the TV channel owned by the Los Angeles Dodgers.

The lingering dispute underscores the changing economics of cable television. Pay-TV operators are determined to hold the line on rising programming costs to retain their customers.

Left in the lurch are Dodgers fans. Many are increasingly frustrated by the prospect of missing Hall of Fame broadcaster Vin Scully’s final season.

“This situation is so maddening,” said Bill Waxman, 65, of Simi Valley, who has followed the Dodgers for decades but subscribes to TV service from phone giant AT&T, which does not carry the channel.

“For years, the Dodgers were the team in our living room – they were the soundtrack of our summers,” Waxman said. “We get to see the Angels, the Lakers, the Clippers and the Kings, but we can’t watch the Dodgers.”

Customers in about 1.8 million homes in the Los Angeles region that receive TV service from Time Warner Cable and Charter Communications have the channel in their lineups. But an additional 3 million homes in the metropolitan area do not have SportsNet LA.

Time Warner Cable confirmed Tuesday that it has proposed a new deal – a second offer in a week – to try to coax AT&T, which now owns satellite service DirecTV as well as Cox Communications and other pay-TV providers back to the bargaining table.

Time Warner Cable this month cut the price of SportsNet LA to try to resolve the impasse. But pay-TV providers balked, saying the price of the channel – offered this year for about $3.50 a month per customer home – was still too high.

Pay-TV operators privately acknowledged they were wary of signing a one-year deal with Time Warner Cable because of fears the price of the channel would soar within a few years.

Now, to try to resolve that concern, Time Warner Cable is offering a six-year deal with the lower introductory price and a gradually higher rate in subsequent years, according to one person familiar with the proposal who asked not to be identified discussing sensitive deal points.

Time Warner Cable declined to discuss the details of its new offer.

“We have, in fact, extended another offer to AT&T/DirecTV that is longer than one year,” said Maureen Huff, a spokeswoman with Time Warner Cable, which distributes the channel on behalf of the Dodgers organization, Guggenheim Baseball Management.

She declined to elaborate further.

Last week, Time Warner Cable acknowledged that it had cut the price of the channel by 30 percent compared to last year’s price. In 2015, the company charged an average of $4.90 a month per subscriber home, according to consulting firm SNL Kagan. The company continues to offer SportsNet LA for $3.50 a month, per subscriber home for 2015.

There are a number of reasons why other pay-TV providers continue to refuse to play ball. One is that Time Warner Cable is in the process of being acquired by another firm, Charter Communications, and some providers are waiting to see whether Charter offers the channel at a further discounted rate.

Even with the price cut, SportsNet LA remains one of the highest-priced TV channels in the nation, pay-TV executives said Tuesday.

In addition, these executives noted that the value of the channel continues to diminish because most hard-core Dodgers fans have switched to a provider that carries the channel, such as Time Warner Cable.

Customers that remain have not been as bothered by the blackout, making pay-TV providers less motivated to spend a lot of money for the channel.

“We know that the Dodgers are popular sports programming for select customers, but that programming comes at an extremely high price for all customers,” Cox Communications said in a statement.

“We will continue to work with Time Warner Cable-SportsNet LA to fight on behalf of all our customers, not just sports/Dodgers fans,” Cox said.

Another reason for the foot-dragging is that several pay-TV operators had buyers’ remorse after agreeing to carry another sports channel – Time Warner Cable SportsNet, which broadcasts Los Angeles Lakers games.

Soon after Time Warner Cable launched that network in Los Angeles, the Lakers basketball team fell apart and TV ratings for their games sank. DirecTV and other pay-TV operators do not want to pay for two costly sports channels that draw small audiences.

This week’s sweetened offer for SportsNet LA was designed to entice DirecTV, in particular. In the second year of the proposed new contract, SportsNet LA would be offered at roughly the same price that DirecTV sells a channel that it owns in the Seattle market, according to the knowledgeable person.

DirecTV owns the Root Sports Northwest channel, which provides coverage of the Seattle Mariners and two soccer teams. This year, pay-TV operators pay an average cost of $3.84 a month per subscriber home for that channel, according to SNL Kagan.

DirecTV declined Tuesday to comment on the new offer.

Los Angeles is not the only market where a dispute over distribution of a regional sports network is raging. In the New York region, cable giant Comcast Corp. dropped the Yes Network, which carries New York Yankees games. Fans in more than 900,000 Comcast homes – mostly in New Jersey, Connecticut and Pennsylvania – face the prospect of starting the season next week without Yankees on their TVs.