The U.S. Department of Justice recently filed a lawsuit accusing pay-TV companies of collusion in refusing to carry SportsNet LA, leaving thousands of Los Angeles Dodgers fans unable to watch their team.
Thousands of Los Angeles Dodgers fans have missed watching their favorite team play baseball on TV for the last three years. They haven’t been able to watch the best pitcher in baseball, Clayton Kershaw, or the phenom at shortstop, Corey Seager. They’ve missed the ups and downs of the Yasiel Puig Experience. They missed out on the final three seasons of Vin Scully’s legendary career, although there was a temporary impasse that allowed fans to watch a handful of games with Scully in the booth at the end of the regular season this year on over-the-air channel KTLA.
The conflict that has prevented Dodgers games from being on TV the last three years actually goes back to 2012, when Time Warner Cable launched a sports channel dedicated to the Los Angeles Lakers. While smaller pay-TV providers agreed to carry the Lakers channel at a hefty price, DirecTV held out for a better deal. After losing hundreds of subscribers, they gave in and acquiesced to Time Warner Cable’s demands.
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In 2013, Time Warner Cable began promoting a new channel featuring the Dodgers. This came after they signed a 25-year deal with the team worth $8.35 billion to sell the channel to other pay-TV distributors. Something strange happened this time. The pay-TV providers refused to pay the price.
According to the Department of Justice, the reason Time Warner Cable was unable to make a deal with these distributors was because the pay-TV distributors colluded with each other by agreeing to not pay the price being demanded. The lawsuit alleges that the companies shared nonpublic information. The companies mentioned in the lawsuit are DirecTV, Cox Communications, Charter Communications, and AT&T. Cox and Charter were not named as defendants in the suit.
Specifically, the Justice Department lawsuit reads, “The sharing of this competitively sensitive information among direct competitors made it less likely that any of these companies would reach a deal because they no longer had to fear that a decision to refrain from carriage would result in subscribers switching to a competitor that offered the channel.” The Justice Department claims to have documents, including emails, text messages, and phone calls that prove this claim.
In response to the lawsuit, AT&T, which now owns DirecTV, claimed that the reason they chose not to carry SportsNet LA was because of the high cost of $5 per month per subscriber home. AT&T’s David McAtee said, “The reason why no other major TV provider chose to carry this content was that no one wanted to force all of their customers to pay the inflated price that Time Warner Cable was demanding for a channel devoted solely to L.A. Dodgers baseball.”
That’s a key point to make in favor of AT&T/DirecTV. They didn’t want all of their customers to pay for Dodgers games. They wanted only those who wanted to watch Dodgers games to have to pay the extra $5 per month for the privilege. At a time when more and more people are “cutting the cord” from cable, this is important. Non-Dodgers fans would not want to see their bill increased by $60 per year for a channel they would never watch.
Time Warner refused to budge. They did indicate that they would be willing to let an arbitrator decide a fair price for the channel, but wanted everyone to have to pay, not just Dodgers fans. Time Warner paid $8.3 billion dollars to be the exclusive distributor of the channel that shows Dodgers games and needs all pay-TV customers to foot the bill.
While all of this was happening behind the scenes, it was fans of the Los Angeles Dodgers who were losing out. Longtime Dodgers fan Brandon Knudsen said, “I always felt that something had to be going on because the demand for the product was always there. For all of these companies to flat out refuse to come to the negotiating table for a crown jewel of Major League Baseball didn’t make any sense. The deck was stacked against Time Warner Cable from the get-go.”
Another Dodgers fan had a slightly different take. Los Angeles resident John Mueller put the blame on Time Warner Cable for demanding $5 per month per subscriber, saying it was unreasonable to expect non-Dodgers fans to pay that price. He also acknowledged that the collusion between the companies, if true, is unethical and should be addressed. He, along with thousands of other Dodgers fans, are hoping the lawsuit will at the very least pave the way for Dodgers games to be on TV next spring.
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It’s too bad they missed out on most of the final season of Vin Scully’s career, but at least Clayton Kershaw will still be wearing Dodger blue next year.