Time Warner Cable Strikes Out In Securing More Distribution For Dodgers
Los Angeles Dodgers fans who can’t watch games on SportsNet LA are still out of luck for now. It “doesn’t look like we’ll get additional distribution for the Dodgers network this season,” Time Warner Cable CEO Rob Marcus told analysts this morning in a call to discuss Q2 earnings.
This has been a problem for the No. 2 cable operator, which has agreed to sell itself to Charter Communications. TWC committed $8.35 billion for a 25-year hold on Dodgers rights. But most other distributors, including DirecTV and Dish Network, refuse to pay the estimated $5 per subscriber per month that TWC wants.
TWC says it spent $30 million in Q2 for Dodgers rights — contributing to a $148 million, or 11%, increase in programming costs from last year’s quarter to $1.49 billion.
On other matters, Marcus says Charter’s working to close the $78.7 billion acquisition by the end of this year, although “we don’t really control the timing of this process.” Last week the companies received the second requiest for information from the Justice Department, and they expect the FCC to soon start its informal 180-day clock on merger reviews.
The CEO says he’s “intrigued” with the idea of offering video customers so-called skinny bundles — which have fewer channels than offered in the full bundle, and a lower price. Verizon’s FiOS has taken the lead in trying this, but an offering that requires an extra payment for ESPN raised the ire of the channel’s parent, Disney. It sued, saying the skinny offering violated its contract with Verizon, a charge the telco rejects.
“We’ll continue to watch it, we’re fans of giving customers flexibility,” Marcus says. He notes, though, that “80% of our video base now takes what people call the full bundle…the reason they do is because it’s a great value.”
TWC reported $463 million in net income in Q2, down 7.2%, on revenues of $5.93 billion, up 3.5%. That figure was slightly below the $5.94 billion that analysts anticipated. Adjusted earnings at $1.54 were short of expectations for $1.81. The company lost 45,000 video customers, bringing its total to 10.77 million — but it added 172,000 broadband for a 12.16 total.
The sub totals were “well ahead” of expectations, Wells Fargo Securities’ Marci Ryvicker says. MoffettNathanson Research’s Craig Moffett says that “this is what a turnaround always looks like; results are a mixed bag of better and worse results.”
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