Ops Balk at Ballgame Surcharge
By R. THOMAS UMSTEAD -- Multichannel News, 4/23/2001
In a familiar skirmish over rising sports rights, Time Warner Cable is resisting Fox Sports Net's attempts to add a surcharge for additional Houston Astros and Texas Rangers baseball games.
In Seattle, a small operator has so far declined to pay surcharges for extra Seattle Mariners baseball games, although several major MSOs in the area have accepted those terms.
Time Warner — with 1.5 million subscribers in the affected DMAs — refused to pay a surcharge of approximately $45,000 per game for 10 Astros and up to 21 Texas Rangers baseball games not included in the its current deal with Fox Sports Net Southwest, sources close to the situation said.
Time Warner currently carries 65 Astros games and 59 Rangers games as part of its deal with Fox Sports Net Southwest.
Time Warner Cable vice president of corporate communications Mike Luftman said the current number of Astros and Rangers cable games, combined with a significant amount of local broadcast coverage, was sufficient for its cable subscribers.
Only about 4 percent of its subscribers have an interest in the games, he added.
"We feel that we have plenty of baseball games, so we decided not to pay the surcharge," Luftman said.
Nevertheless, Luftman said the company will continue to discuss the issue with FSN.
"As it is with any of our distributors, it's entirely TW's decision whether or not to deliver these games on behalf of their subscribers, and they've decided against it. As business partners, we've no alternative but to respect that," an FSN spokesman said.
FSN ratcheted up the pressure by taking out ads in the Houston Chronicle two weeks ago to explain its side of the situation. It also offered viewing parties in local Houston hotels for the April 15 Astros-St. Louis Cardinals game, which drew about 70 to 100 people, said a network spokesman. It's unclear whether FSN would use the tactic for future games.
In Seattle, FSN also wants an unspecified surcharge for an additional 24 Mariners games. The biggest area MSOs, AT&T Broadband and Charter Communications Inc., are on board. But midsized MSO Northland Cable, which has about 48,000 local subscribers, hasn't signed on. The two sides are still talking.
Northland has received calls from disgruntled fans upset that they can't watch the additional games, Western division operating manager Mike Roberge said. But the system has some fiscal issues to weigh.
Though he wouldn't reveal specific numbers, he said the surcharge was about 25 percent above the system's current fee for Fox Sports Northwest. The surcharge also rides on a whopping 65-percent increase in the network's licensing fee last year.
"As cable operators, we have to balance offering our subscribers a variety of programming options and controlling programming costs," Roberge said. "We continue to negotiate with Fox, but these are challenging times for operators."
