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[December 10, 2012]
DirecTV adds local sports surcharge for some new subscribers
Dec 10, 2012 (Los Angeles Times - McClatchy-Tribune Information Services via COMTEX) -- THIS POST HAS BEEN UPDATED -- see below for details.
Satellite broadcaster DirecTV has quietly added a surcharge to some customers for sports channels separately on several of its most popular programming packages.
New DirecTV subscribers who live in areas where there are more than one regional sports network (Los Angeles has four -- News Corp.'s Prime Ticket and Fox Sports West and Time Warner Cable's SportsNet and Deportes) and want those channels are being asked to pay a monthly surcharge of $3. That fee is on top of whatever portion of the costs of the channels DirecTV passes on to its customers.
DirecTV has installed the surcharge on four of its packages, including Choice and Choice Plus. The surcharge started in September. A spokesman for the company said only about 20% of the markets around the country have more than one regional sports network -- although that number is on the rise as Comcast, News Corp. and Time Warner Cable increasingly turn to sports to develop new channels.
The move is significant because even though it is only for new DirecTV subscribers and only used in areas where there are multiple local sports channels, it could be seen as a first step toward selling sports channels separately. Sports channels account for a large chunk of cable bills as the rights to games continue to skyrocket. DirecTV has also tested this approach with some current subscribers as well, the spokesman said.
Companies that DirecTV's move will affect include News Corp.'s Fox Sports unit, Time Warner Cable and Comcast Corp. All three are players in the regional sports network game. In Los Angeles, Time Warner Cable recently launched two channels and landed the rights to the Lakers in an effort to compete against News Corp.'s channels here.
DirecTV's shift will likely be met with a backlash by those companies. One executive at a sports programmer who was not authorized to speak on the record said this is an attempt by DirecTV to paint regional sports networks "as the bad guys." A DirecTV spokesman said the surcharge "only covers a small portion of the cost DirecTV is paying sports programmers to carry" the regional sports networks.
Follow Joe Flint on Twitter @JBFlint.
This post has been updated to reflect that the surcharge is not optional. If a customer does not want local sports channels, then the lower cost entertainment package is the option.
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