It is not such a happy start to the season for the Orioles or Washington Nationals fans who subscribe to DISH TV. On Thursday, DISH announced that it has dropped MASN, the regional sports network that carries the both teams.
At the heart of the dispute are fees paid by DISH to regional sports networks at a time when much of the TV industry driven by specialized streaming services is moving to an a la carte business model. The regional sports network pricing model is one that grew out of cable TV, where a provider could bundle channels and get consumers to pay for channels they might not watch to get their favorites.
That’s how DISH is explaining the decision to drop MASN. The timing, of course, in the week of Opening Day, is intended to maximize leverage in negotiations and pain for networks and channels in the form of complaints from Baltimore and Washington customers who suddenly find they cannot watch their hometown teams.
“The current RSN [regional sports network] model is fundamentally broken,” Brian Neylon, group president for DISH TV, said in a statement. “This model requires nearly all customers to pay for RSN’s when only a small percentage of customers actually watch them. As the cost of these channels continues to escalate, we no longer think it makes sense to include them in our TV lineup.”
Neylon’s statement said the DISH offer to MASN would allow DISH TV customers “to choose to subscribe to the RSN channels they want … on an a la carte basis, similar to premium subscription channels.”
In an email Friday, MASN spokesman Todd Webster said, “MASN offered to continue distribution with DISH on fair market terms, however DISH chose to decline those terms. Two-dozen other distributors continue to carry MASN and MASN 2 and are listed on masnports.com. They include: Comcast, DirecTV, AT&T TV, Fios, Charter and Cox, all of which have recently agreed to carry MASN for multiyear deals at the same terms offered to Dish.”
David Grossman, an associate professor of business and marketing at Goucher College, said that the model that MASN and other channels are using is “broken” and that MASN is going to have to adapt to the a la carte business model.
Citing the way consumers purchase access to streaming services like Hulu, Grossman said, “The old model tells people to buy their product. The new model is to offer people a product that people want. MASN doesn’t get this way of thinking.”
MASN does look like a network trying to cut spending. It chose not to renew longtime on-air talent like Gary Thorne and Jim Hunter. It cut back on the number of Orioles and Nationals spring training games that it broadcast this year. It has almost $100 million that it cannot touch in escrow pending a ruling on an appeal over rights fees owed by MASN to the Nationals for the 2012 to 2016 seasons. Whether or not those financial concerns are a factor in this negotiation with DISH is not known.
DISH, which also owns SLING TV, also announced that it has dropped three NBC regional sports networks in Washington, D.C., and California.