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At a time when Time Warner Cable is increasing cable-TV rates for millions of subscribers nationwide, the nation’s second largest cable company managed to find several billion dollars to launch a new regional sports network showcasing the Los Angeles Lakers.
An agreement with the basketball team, which some analysts guess will cost the cable company at least $3 billion over the next two decades, will mean the loss of more than three dozen games formerly available over the air, for free, from KCAL-TV in Los Angeles. Fox Sports West aired most of the rest of the team’s games, for which it paid an estimated $30 million a year, according to the Los Angeles Times.
Time Warner intends to use the Lakers to showcase new regional sports networks — one in Spanish — planned for the company’s two million subscribers in southern California.
The deal stunned both KCAL and Fox Sports. Time Warner Cable is the only major cable operator not running its own major regional sports networks, which represent the cable industry’s most costly programming. Unlike premium movie channels, most sports networks are included in standard cable lineups or shifted into “mini-pay” tiers that charge a few dollars per month. Sports programming costs often represent the most significant part of cable company rate hikes.
The Times predicts Time Warner will end up charging itself at least $3.50 a month for the new networks, which means individual subscribers could be looking at a substantial rate increase down the road.
But Time Warner doesn’t intend to just deal with the Lakers.
Melinda Witmer, executive vice president and chief programming officer of Time Warner Cable, said the company would be “looking at all available sports in the marketplace.”
That could drive prices up even faster.
The cable company says it is getting into the sports network business to “control our economic destiny.”
Of course Time Warner will be able to sell their sports network to the competition recouping some of the cost and have a significant bargaining chip at the next KCAL and Fox sports retransmission agreements. I am assuming they were paying both these networks for the Lakers game! Sounds like a Tie to me.
I would love to see TWCS here in Buffalo get the Sabres.
Hob
They actually tried this before with the Bobcats and it totally went belly up on them.http://en.wikipedia.org/wiki/Carolinas_Sports_Entertainment_Television I don’t see this succeeding at all unless they learn from what went wrong with this.
Cable is starting to be a complete joke and I am referring to the entire cable company liniup. From Timer Warner, Charter to Comcast. They keep on increasing rates and they have old technology and not to mention unreliable. The new age of content delivery is fiber optics technology. Verizon’s Fios T.V. & Att’s Uverse both offer this technology at lower rates than most Cable companiies. I made the switch last summer from Comcast Cable to AT&T’s Uverse and absolutely love it. The overall customer service, high speed content deliver, lower lost is something that I never experienced before with… Read more »
There are plenty of us that would love to have the option of switching to FiOS, but are not served by Verizon (or live in a non-FiOS area). I agree there are plenty of rebate offers and other deals out there for both existing and new customers. U-verse has gotten high marks from some customers who really appreciate getting some better broadband speeds and different package options, and their DVR box is definitely nicer than what a lot of cable systems are offering, but AT&T does have some issues with picture quality and running out of bandwidth in larger households… Read more »