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As Dodgers season starts, battle over pay TV fees shuts out fans

Los Angeles Dodgers pitcher Hyun-Jin Ryu throws a pitch against the Arizona Diamondbacks during the bottom of the second inning in their Maj
Los Angeles Dodgers pitcher Hyun-Jin Ryu throws a pitch against the Arizona Diamondbacks during the bottom of the second inning in their Maj

By Ronald Grover and Liana B. Baker

(Reuters) - As the Los Angeles Dodgers baseball team takes the field for its regular season, many local fans who hoped to tune in on television are getting shut out of the action.

Dodger games are carried on the new Dodger-owned SportsNet LA channel. But with Time Warner Cable and two smaller cable systems the channel's only carriers, most of the 5 million pay-TV subscribers in the Los Angeles area are left in the dark.

That's because the other larger pay-television distributors in the area, including satellite TV operators DirecTV and Dish and cable operators Charter and Verizon, have balked at signing on, claiming the fees are too high.

Time Warner Cable, which also operates SportsNet LA for the Dodgers, last year paid $8.3 billion over 25 years for the rights to Dodger games.

Pay TV operators have been vocal opponents of the rising cost of carrying sports, which they say gets passed on to consumers.

They've resisted paying SportsNet LA's monthly fee of more than $4 a subscriber, saying it is the highest for a regional sports channel. Cable industry insiders say the fee escalates to $5 per subscriber in later years.

In comparison, cable systems pay a monthly fee of $3.43 per subscriber for the YES Network, which carries New York Yankee games, according to cable consultant SNL Kagan.

"There's no question we would prefer to continue to carry Dodgers games," DirecTV said In a March 23 web post. "But we believe the price is not fair and reasonable to the millions of families living in metro Los Angeles, let alone Central California, Nevada and Hawaii."

DirectTV wants its customers to be able to choose to sign up for the channel, a so-called a la carte model that the Dodgers have rejected. Under that model, DirecTV would pay only for its subscribers who choose the Dodgers channel.

"That's rhetoric, and it's disingenuous," said Stan Kasten, the Dodgers' chief executive officer. "This is about the game of negotiating. No other regional sports network has a la carte."

The channel's rates, he insisted, "aren't any higher than in any other major market."

Dish Network, Cox and Verizon said in statements they would sign agreements if the price warranted.

Kasten says he's holding out hope deals will get done in the next few days, but during a press conference on Thursday he encouraged Dodgers fans to demand the channel from their pay-TV providers.

"If for some reason that's not happening quick enough, my suggestion for you is to go to a service that is providing it," he added.

Fans aren't happy. One fan tweeted a sarcastic thanks to Time Warner Cable for "turning a large market team into a small market team."

History says some Los Angeles viewers may not get Dodger games. In 2012, Time Warner Cable similarly struggled to get other operators to carry its LA Lakers basketball channel. Ultimately, the cable operator signed deals with DirecTV, Verizon and several cable companies.

Dish Network refused, and top programming executive Dave Shull has said it is unlikely Dish will carry the Dodgers network either.

(Reporting by Ronald Grover in Los Angeles and Liana B. Baker in New York; Editing by Leslie Adler)

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