For six long years, nothing — not two trips to the World Series, not hundreds of thousands of angry baseball fans, not indignant politicians, the commissioner of baseball or even the U.S. Justice Department — could break the bitter stalemate that prevented much of Los Angeles from regularly watching Dodgers games on TV.
But Wednesday, even with the start of the 2020 baseball season delayed indefinitely, the impasse ended. AT&T added SportsNet LA, the Dodgers-owned TV channel, to DirecTV and its other television services.
“Apparently the parties were waiting for a pandemic to come along and provide that opportunity, because nothing else seemed to do it,” said Ed Desser, a Santa Monica-based sports television consultant and former president of NBA TV. “I’m only being a little bit facetious.”
Star infielder Justin Turner, who grew up watching the Dodgers on television, said he was excited that the team finally could play before just about all of its fan base.
“I think I can speak for a lot of people who will say this is, maybe, long overdue,” Turner said on SportsNet LA.
In the end, old-fashioned horse trading helped bring AT&T and Spectrum TV’s parent company, Charter Communications, together to resolve long-standing differences, according to people familiar with the situation who were not authorized to comment.
AT&T is desperate for new subscribers to its upcoming video streaming service, HBO Max, which the company hopes will compete with Netflix and Disney+. Charter fits the bill because it can offer the new service to its more than 15 million pay-TV customers nationwide.
AT&T can ill-afford another failure. The Dallas-based telecommunications giant has been hemorrhaging customers from its El Segundo-based DirecTV unit, which it acquired five years ago for $49 billion. AT&T lost more than 4 million DirecTV subscribers last year and the company has been under pressure from investors to right the ship — or sell DirecTV. And more recently, its latest venture — AT&T TV streaming service, a package of live TV channels — made a lukewarm debut in February.
Much is riding on the success of HBO Max, including whether the architect of the service, AT&T Chief Operating Officer John Stankey, will ultimately become AT&T’s chief executive.
In addition, contract renewals are looming for the traditional channels that AT&T owns, including CNN, TBS and HBO. Now, Charter has more of an incentive to keep those channels on its Spectrum TV service without a major dust-up during those negotiations.
Charter gets a big benefit too. It will be able to substantially reduce its losses of about $150 million a year on the Dodgers channel contract.
Until now, the channel was available only in the nearly 2 million Spectrum homes in Southern California. Such limited carriage made the channel extremely unprofitable for Charter. It inherited a 25-year, $8.35-billion contract with Guggenheim Baseball Management, the owner of the Dodgers, when it acquired Time Warner Cable in 2016.
But now, a total of more than 3 million pay-TV homes, including AT&T subscribers in Las Vegas and Hawaii, will have access to the channel.
The deal underscores the increasingly treacherous landscape traditional TV providers face as streaming services such as Hulu and Netflix become more popular and longtime customers cut the pay-TV cord. Rivals are now looking to each other to help stay afloat.
The sticking point had long been the price that Charter offered SportsNet LA to AT&T and the other pay-TV providers — around $5 per month, per subscriber home. Financial terms of the deal were not disclosed and it’s unclear whether AT&T will boost its rates to customers.
Since its 2014 launch, SportsNet LA was one of the most expensive TV channels around. That irked distributors because the Dodgers channel carries live programming only six months a year, and they didn’t want to force subscribers who don’t watch baseball to pay the freight.
Charter refused to offer SportsNet LA to AT&T — or any other provider — at a reduced price. Over the years, the Dodgers enlisted members of Congress, who decried the blackout but were powerless to end it.
Spectrum even spurned an approach by Major League Baseball Commissioner Rob Manfred, who asked the pay-TV provider to offer SportsNet LA as a streaming service for fans that could not get the channel on cable or satellite.
For a while, Charter tried to find the silver lining in the boondoggle deal by promoting Spectrum as the only place for fans to see the Dodgers’ regular season games. An ad for Spectrum underscored the point: “No Spectrum? No Dodgers!”
AT&T had other reasons to carry SportsNet LA. As video streaming services have become more popular, sports content has been one of the few draws that keeps consumers paying $100 or more a month for a pay-TV subscriptions. Without sports, millions of additional consumers probably would cut the pay-TV cord, giving AT&T another reason to diversify its sports portfolio. AT&T also has not said whether it will try to hold onto exclusive rights to its NFL Sunday Ticket package, which has been a main draw for subscribers, when that deal expires in two years.
Executives from two pro leagues speculated that, after a long hiatus from sports, the novelty of finally seeing games could produce ratings not seen since pre-digital days. In a post-pandemic world, fans might be reluctant to return to Dodger Stadium en masse after the coronavirus crisis recedes — indeed, games might be played without fans at first. And older fans, who might be timid about venturing out, are most likely to keep their cable or satellite subscription. AT&T will be able to appeal to sports-starved customers by offering a more robust portfolio of sports channels.
“If sports is the thing that has been holding together the bundle, and we don’t have sports for at least some period of time, you’ve got to figure people have been looking at downgrading or disconnecting, and now there is a reason not to,” Dresser said.
David Carter, sports business professor at USC, agreed that having the deal in place would “help an otherwise tepid group of consumers that might prefer to watch the Dodgers on TV.”
Neither AT&T nor Spectrum made company executives available for comment.
“As a leader in delivering sports content, it’s important to us to offer fans throughout Southern California a great experience with their favorite teams through our streaming and traditional TV services,” AT&T said in a statement. “Once the MLB and NBA play resumes, customers will be able enjoy the full slate of live Dodgers and Lakers’ games across AT&T’s video platforms.”
Other prominent pay-TV providers in Southern California, including Dish Network and Cox Communications, are not expected to suddenly sign up for SportsNet LA.
The breakthrough in the talks came after several twists and turns that raised the hopes of the baseball faithful, only to dash them.
One of those came in 2016, when the Department of Justice filed an antitrust lawsuit against AT&T, alleging that DirecTV executives engaged in collusion to make sure that none of the other distributors in Southern California would pick up the channel, which was then distributed by Time Warner Cable. But after President Trump took office, the government settled the case without even a fine for AT&T, or a requirement that DirecTV negotiate to carry SportsNet LA.
Even though many Dodgers fans haven’t been able to watch their team on TV for years, its unclear whether the brand was harmed. The SportsNet LA broadcasts , unavailable to much of the market, averaged 103,000 households last season, the highest-rated program on local cable, according to Forbes.
The Angels’ Fox Sports West broadcasts, available on every major cable and satellite service, averaged 75,000.
“This is a big deal, but it’s also anticlimactic,” Carter said. “It feels really hollow at the moment, because there is no baseball going on. It’s something I’m sure fans will celebrate at some point, but right now it’s more about hope than reality.”