News

Dark Seasons in Houston, San Diego

BASEBALL FANS LOSE BIG AS RSNs FAIL TO SECURE CARRIAGE 3/31/2013 8:00 PM Eastern

The Houston Astros-Texas Rangers season opener last Sunday (March 31), the first game of the 2013 Major League Baseball season, may have been the last many Astros fans could watch locally on TV.

That’s because Comcast SportsNet Houston, which will carry 157 of the Astros’ 162 scheduled games during its rookie season as the team’s broadcast partner, has yet to secure carriage deals with most distributors in its five-state TV territory.

And at press time, it didn’t appear as if any new affiliate accords were in the offing for the joint venture of the Astros, the National Basketball Association’s Houston Rockets and Comcast’s NBC Sports Group, which launched last October. Rockets and Astros games previously aired on FS Southwest.

On the West Coast, FS San Diego, the year-old regional sports network home of MLB’s Padres, had yet to ink a contract with Time Warner Cable at press time, despite local politicians urging the parties to reach a pact.

PRICING AT PLAY

The carriage impasses are rooted in the parties’ differing perceptions about the value of the RSNs’ monthly license fees, and underscore how the price of sports rights continues to skyrocket throughout the nation.

CSN Houston has carriage on Comcast in parts of Louisiana and in Little Rock, Ark., as well as in Houston. Combined with deals with such small providers as Coastal Link, Consolidated Communications, EnTouch and Phonoscope, CSN Houston has about 40% coverage in Houston, the nation’s 10th-largest DMA, with 2.2 million TV homes.

However, DirecTV, Dish Network, Time Warner Cable, AT&T’s U-Verse TV, Suddenlink Communications and other major providers in Texas, Oklahoma, Louisiana, Arkansas and New Mexico have remained on the sideline since the RSN tipped off last October with coverage of the Rockets.

CSN Houston president and general manager Matthew Hutchings said last Thursday (March 28) that despite ongoing negotiations with large and small providers, which sometimes occur multiple times a day, he was “growing less optimistic” that the RSN would reach deals by opening day.

Sources put CSN Houston’s monthly subscriber license fee at about $3.40. Network officials would not discuss its rate card. Asked if pricing was holding up deal-making, Hutchings said he couldn’t “get into specifics, but there are multiple components. It’s a negotiation.”

AT&T U-verse offered this response last week: “We currently don’t have an agreement with Comcast SportsNet Houston. Like all TV providers, we are feeling the effects of ever increasing sports costs, and the impact that has on our customers. … Customers aren’t getting anything materially new or different when these regional sports networks launch. The programming is largely the same team games that were previously available on other channels we already carry, so the extra value is not being created.”

DirecTV echoed the theme: “We have yet to be able to reach an agreement with the owners of CSN Houston that allows customers to choose whether they want to pay to see Astros or Rockets games or not. We are ready and willing to have that discussion any time so we can begin providing this network.”

DirecTV, which has been known as the provider offering the broadest sports packages and owns a trio of RSNs itself, has instituted a monthly surcharge in markets where there are multiple RSNs.

AD WAR

Meanwhile, CSN Houston continues to mount ad campaigns aimed at turning the distribution tide. Steered by focus groups in which it was determined that consumers want facts and figures, the latest messaging features Hutchings speaking to the camera with a “you deserve the facts” and a “you deserve the channel” message. He said the RSN has forwarded messages from nearly 90,000 consumers who want their providers to offer CSN Houston.

“We’re going to continue to keep working,” Hutchings said. “Our goal remains to achieve full distribution. We want to grow our business by helping [distributors] grow theirs.”

Following a city council meeting last week, Houston Mayor Annise Parker called the impasse between the network and major cable and satellite providers “intolerable,” noting it was unfair that many Houston residents who helped pay for the city’s downtown sports facilities are unable to watch Astros and Rockets games on television. She encouraged all sides to “get together and get it done.”

Similar political proclamations were made in San Diego, where city officials last week again discussed the carriage impasse between FS San Diego and TWC, urging the parties to reach a deal before the start of the MLB season.

SAN DIEGO SQUABBLE

FS San Diego has been unable to strike an affiliate contract with the nation’s No. 2 MSO, the only major distributor in the club’s TV territory still on the sideline.

With the San Diego Padres, TWC said Fox “has demanded 300% more than the price we paid for Padres games two years ago, when Cox had the rights. This is unreasonable, and it’s the reason we are not carrying the games.”

Cox carried FS San Diego in 2012 and was joined late in the season by AT&T U-verse. DirecTV aired the network’s Padres contests and related shoulder programming last season, but not the rest of FS San Diego, and Dish will begin full-time distribution of the service on opening day.

SNL Kagan estimated the license fee for Cox Channel 4 in San Diego, the Padres’ former rightsholder, at $1.46 per sub in 2011. Published reports put FS San Diego’s monthly at roughly $4.

According to published reports, San Diego City Council officials voted 6-0 to push the sides to strike a deal before the Padres’ season begins on April 1. The hearing was the third in recent weeks, following a San Diego City Council committee conclave on March 14, which resulted in Fox Sports and MSO officials meeting in New York on March 19. The Coronado City Council also addressed the RSN stalemate that day.

Late last week, both parties said negotiations were continuing, there were no indications a deal was near.

TAKEAWAY

Sizable pieces of the Houston and San Diego TV markets will be without baseball, as RSNs and local providers continue to haggle over carriage.

November

Next TV

Affinia Manhattan, New York, NY