The one reason cable has been hanging onto so many households, besides massive deals on bundles, is sports. Cable is the best deal for sports fans, and that’s great. But it’s a crappy deal for those of us who aren’t: sports channels account for 40% of cable fees. And it’s worse if you live in a local area with a popular team, which is why a bunch of L.A. cable subscribers are currently suing Time Warner.
It’s pretty straightforward. The subscribers are suing because, whether they give a crap about the Dodgers and the Lakers or not, their bills are going up thanks to a deal Time Warner Cable cut to carry games:
The complaint cites TWC’s $3 billion acquisition of Lakers telecast rights in February 2011 and its $8 billion acquisition of Dodgers game telecasts in January 2013… The plaintiffs charge that because TWC has chosen to bundle these channels without allowing subscribers the ability to opt out, subscribers will be forced to pay about $4-$5 in additional fees per month as a result.
It’s a case Time Warner is going to fight tooth and nail because there’s a lot more at stake here than just maybe not making those billions back. If this case succeeds, it essentially throws all of cable’s model into question and quite possibly drags professional sports in after it. After all, why should the guy who wants nothing but sports pay for non-sports networks? And if the cable revenue stream suddenly narrows, what will that mean for teams that underperform financially?
Will the suit succeed? Cable companies, networks, and consumer groups have been arguing about this for quite literally decades. The basic problem has always been that you don’t “need” cable and that cable companies can do what they want with their privately owned networks, so no judge has seen fit to tell cable companies to knock it off.
But that was before cable companies started suing cable channels over bundling. So there might be a bit more to this in the long run.
I want more like this!
Follow us on Facebook and get the latest before everyone else.