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DirecTV Adds Sports Surcharge

$3 Tacked On to New Customer Bills in Select Areas 12/11/2012 8:38 AM Eastern

In an effort to offset the rising cost of regional sports networks, DirecTV has been implementing a $3 charge to new customers in select areas for about four months, according to the company.

The satellite giant began implementing the surcharge to new customers only in August, according to a spokesman. The charge only applies to areas that have multiple regional sports networks.

The surcharge was first reported Monday in the Los Angeles Times.

That includes the top two markets in the U.S. -- New York and Los Angeles.  New York has four RSNs (YES Network, SportsNet New York, MSG and MSG-Plus as does  Los Angeles with Time Warner Cable SportsNet, Time Warner Cable Deportes, Prime Ticket and Fox Sports West.

In a statement, DirecTV said the charge is a way for the satellite giant – it has 19 million customers across the country -- to offset some of the high costs of sports programming.

“It is simply a $3 surcharge, for new customers only, in a small percentage of zip codes where we are contractually obligated to carry multiple RSN's and is a way of recovering some, but not all, of the skyrocketing cost of sports in certain markets,” DirecTV said in a statement.

Regional sports networks have been a prime source of headaches for distributors, who have complained of their escalating costs. And it appears that DirecTV’s $3 surcharge would barely cover the cost of a single RSN.

In the Los Angeles market, reports estimate that Time Warner Cable SportsNet is charging distributors about $3.95 per month per subscriber for the network. Coupled with the other regional sports networks in the market and distributors in the Los Angeles DMA could be paying as much as $10 per month per subscriber for RSNs alone.

According to SNL Kagan, in the New York market, YES charges an average of about $2.60 per month per subscriber, while SportsNet New York charges about $2.20.  MSG and MSG Plus charge $2.48 and $2.17 per month, respectively, according to Kagan.

 

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