Small pay-TV provider feels squeeze play over Dodgers channel

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Small pay-TV provider feels squeeze play over Dodgers channel

Time Warner Cable wants other pay-TV providers to charge all their customers about $5 a month for the Dodgers channel SportsNet LA. DirecTV, Verizon, AT&T and Dish Network have refused. Above, the SportsNet LA studio. (Jay L. Clendenin / Los Angeles Times)

The Great Dodgers Blackout continues. If you're not a Time Warner Cable subscriber, chances are you're not seeing any games on TV this season.

All the other leading pay-TV providers — DirecTV, Verizon, AT&T, Dish Network — have said thanks but no thanks to Time Warner's insistence that all their customers pay about $5 a month for a new Dodgers channel, regardless of whether they want it.

In fact, only one pay-TV company in Southern California other than Time Warner now carries the channel. That's tiny Champion Broadband, which serves about 5,500 subscribers in Arcadia and Monrovia.

And the company isn't happy about that dubious distinction.

"We've always been pushed around by the bigger guys," Dave Haverkate, Champion's chief executive, told me. "But never like this."

As he tells it, his company faced a lose-lose situation when Time Warner cut an $8.4-billion deal with the Dodgers to be the exclusive distributor of SportsNet LA, the new Dodgers channel.

Time Warner reportedly will pay the Dodgers $210 million this season — $84 million for media rights plus $126 million for the so-called value of SportsNet LA. The media rights fee is expected to grow 4% annually, topping $200 million by the end of the 25-year deal.

That sky-high sum pencils out for Time Warner only if it can make all pay-TV customers in the region kick in $4 to $5 a month for the channel.

DirecTV, whose 1.2 million Los Angeles customers give it a roughly 30% share of the local pay-TV market, was the first to declare that jacking up customers' bills $5 a month was unacceptable. It offered to carry the Dodgers channel on an a la carte basis — that is, anyone who wanted it could have it.

The other big boys quickly fell into line behind DirecTV, forming an uncharacteristically united front in trying to protect customers from a rate hike.

Time Warner has rejected an a la carte deal for SportsNet LA. It's insisting that all subscribers of each pay-TV company take — and pay for — the channel. It also hasn't budged on pricing, which isn't a surprise considering that it's got $8.4 billion in licensing fees to recoup.

Haverkate's Champion Broadband has about 4,000 pay-TV subscribers. The other 1,500 are primarily Internet customers.

It also has a problem. Every one of the homes it reaches over its own network in Arcadia and Monrovia is also within Time Warner's service area.

There are hundreds of little guys like this nationwide doing their best to offer consumers a smidge of competition in a market dominated by a handful of players.

Up to now, Haverkate said, Champion has been able to hold its own against its far larger rival.

"Our prices are about 15% lower than theirs," he said. "And we're not Time Warner."

That last selling point, apparently, is a plus in the eyes of many customers.

At first, Haverkate said, he resisted Time Warner's take-it-or-leave-it offering of SportsNet LA. "The amount they wanted to charge was absurd," he said.

"Then spring training came around, and we started getting calls from customers. They asked if we were carrying the Dodgers."

Haverkate soon realized that roughly half his 4,000 pay-TV subscribers were ready to jump to Time Warner if that was the only way they could see Dodgers games.

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TV LUST BLOGGERS

Wesley Case is a south Jersey native and a Delaware grad. Since October 2008, I've worked at b, reporting music stories that focus on Baltimore's burgeoning scene and the music outside the city that matters to you. More ...
Jordan Bartel is assistant editor at b and lives in Mount Vernon. More ...

Luke Broadwater covers Baltimore politics for The Sun. More...

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