Nearly three months after Time Warner Cable launched SportsNet LA, the home of the Los Angeles Dodgers, DirecTV CEO Mike White told analysts Tuesday that not carrying the pricey regional sports network has had an “immaterial” impact on churn.
DirecTV is one of several distributors in the Los Angeles area that have declined to carry SportNet LA because of its high costs – by some estimates, about $4 per subscriber per month. On a conference call with analysts to discuss first quarter results Tuesday, White said that while the parties are still talking, not having the RSN has had little impact on subscriber metrics so far.
Time Warner Cable launched SportsNet LA on Feb. 25. Several distributors complained of the high price – especially when coupled with three other RSNs in the market (Prime Ticket, Fox Sports LA and Time Warner Cable SportsNet), to date only a handful of distributors carry the channel.
On the conference call, White said that rates for the channel are about double what DirecTV pays for other games for content that only lasts six months out of the year.
“We recognize that we would have to step up and pay for the Dodgers this year – they are a premier franchise,” White said. “And we would love to find a way to carry them. We will continue discussions and hope we can get to a sensible place. But we do think this pay-whatever-price-for-content-and-then-dump-it-on-every-pay-TV-provider-in-the-market-to–pay-for-a decision-made-by-Time-Warner-Cable-management is not right. So far, churn has been immaterial in L.A.”
White said the two could reach an agreement, but didn’t hold out much hope in the short term.
“We’re hopeful that in the end we can strike some reasonable compromise,” White said. “But frankly the prices we’ve been quoted are so far beyond what a rational view of the market is, we don’t think it is appropriate to put on our pay TV customers.”
White was a little less forthcoming when it came to the other hot topic of the day – the speculation that DirecTV is in talks to be acquired by telco giant AT&T.
White opened up the conference call not quite denying the M&A rumors swirling around DirecTV.
“These reports are not based on official sources of information and we don’t feel it is productive to speculate on alternative business combinations which may or may not occur,” White said, adding that the company is focusing on growing the business.
DirecTV added about 12,000 net new customers in the first quarter, about 4,000 less than most analysts’ expectations. Despite that shortfall, the satellite giant managed to grow U.S. revenue by 5% and operating profit before depreciation and amortization (OPBDA) by about 10%.