Bad Sports: Why a Comcast/Time Warner Cable Merger Would Hurt Fans

Bad Sports: Why a Comcast/Time Warner Cable Merger Would Hurt Fans

The only thing worse than watching your team lose is not being able to watch it play at all, which happens all too frequently. From the sports fans’ perspective, they support the team and pay the taxes to help build the stadium. Then when it matters most, they turn on the TV to find that the game is not available. Sorry fans, you lose.

Ask L.A. Dodgers fans, most of whom could not watch last year’s regular season games because the local cable operator, Time Warner Cable, bought the Dodgers’ TV rights and promptly made the games available only to their own subscribers. The result: a winning 2014 Dodgers season with roughly 70 percent of fans unable to watch the games on TV, simply because Time Warner Cable refused to make the games available on competing pay-TV platforms.

Ask Philadelphia fans, where the Phillies’ Regional Sports Network and the local cable system are owned by Comcast which, until recently, relied on an arcane regulatory loophole to withhold the network from its competitors. Now, although the network is available to more consumers through competing cable and satellite providers, Comcast demands fees from its competitors that cause consumer bills to skyrocket. Just last year, Comcast raised its rates on competitors to help foot the bill for the $2.5 billion rights agreement it negotiated for Phillies games. Blue Ridge Communications, a local competing cable company, said of the deal, “it will have a direct impact” on customers’ bills.

Time Warner Cable and Comcast have a long track record for acquiring sports rights and hoarding them, restricting the games to a subset of fans who subscribe to these companies’ overpriced services or to another provider willing to pay their ransom and pass the costs on to unsuspecting customers. The greed and power of these two companies has made fans the perennial fumbled pigskin in the high-stakes sports media game.

Now Comcast and Time Warner Cable are asking federal, state, and city governments for permission to merge into a mega-cable conglomerate, serving 18 out of the 20 top sports markets. If Dodgers, Phillies, and other fans thought past seasons were bad, the proposed merger would only make matters worse.

A 2013 paper by three highly-respected economists (Kevin Caves, Chris Holt and Hal Singer) shows that when a cable company owns a regional sports network like the Dodgers or Phillies RSNs, the prices for that network go up and the availability to competitors goes down. The bigger the cable system, the worse the problem gets. In the case of the proposed merger, Comcast not only would acquire Time Warner Cable’s L.A. subscribers, for example, it also would gain hundreds of thousands of Southern California Charter subscribers, exacerbating the incentive to withhold Dodgers games from competing cable and satellite companies and their subscribers.

As sports move to online “Over-the-Top” digital platforms, a combined Mega Comcast with over 50 percent market share in the high-speed residential broadband market would be an even more powerful gatekeeper in the online space. When Comcast’s NBC Sports unit acquired the rights to televise the Olympics, it allowed only Comcast subscribers to watch certain exclusive online video coverage. After acquiring additional Time Warner broadband subscribers, Comcast will have an even greater incentive and ability to do likewise in other sports categories.

Comcast and Time Warner Cable want the American People’s permission to merge. The only answer for federal, state and local governments and regulators is to make a goal-line stand for fans and say no. If our government officials care about fans’ access to games, they should deny this merger and protect our nation’s sports fans.

David Goodfriend is Chairman of Sports Fans Coalition and a former official of the Clinton White House and Federal Communications Commission. In his Washington, D.C. private practice, he represents tech companies like eBay and DISH Network, labor unions like the International Brotherhood of Teamsters, and independent programers like beIN SPORTS.
Source: Huff Post



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