CTRL+ALT+DEL: A capitalistic re-direct with the Dodgers-AT&T-DirecTV PR “news flash” … details not on SportsNet LA
By Tom Hoffarth
The story was big enough to be on the front-page of Thursday’s Los Angeles Times print edition: “Dodgers’ channel finally plays ball: TV standoff ends and games to be available in almost all of L.A.”
In a tight, one-column piece of real estate allotted to this business announcement that somehow wedged its way into everything far more life-and-death in today’s world, maybe the headline was restricted in what it could actually convey. Regardless, it rang hollow.
The online story could couch it a different way: “After six years, the Dodgers’ channel will be available in L.A. What happened?”
Truth is, nothing substantial has happened.
Other than DirecTV viewers now find Dodgers’ classic reruns on the team-owned SportsNet L.A., arriving on Channel 690 for the time being. Whatever else is streaming on the AT&T platforms is another element if you’re looking for silver linings.
Without games going on, what’s to celebrate?
More importantly, and to be accurate, is that SportsNet L.A. launched just prior to spring training for the 2014 Major League Baseball season, has been “available” for the last four-plus years throughout Los Angeles — since Charter Communications bought Time Warner Cable in May, 2015 and the combined territory covered about 90 percent of the Dodgers’ TV region.
A good many just choose not to drop one system and pick up another to get it. Many of them were DirecTV customers.
Based on years of following and reporting on this back to when the red flags came up when it announced in 2014, and with our current contacts in the business, here’s what we can conclude about all this:
== A two page press release from Spectrum landed in the email box at about 9:30 a.m. Wednesday. Often we get a heads up. Nothing this time. The Dodgers released the same information about 10 minutes later.
Considering this was April 1, we waited. Seriously.
You’ve waited six years for something like to happen, and now it’s April Fool’s Day, 2020, in the middle of a horrible pandemic, and this is when the geniuses decide they’ve captured your full attention? It’s a lesson out of Public Relations 101 on what not to do if you want to be taken seriously.
There were clumsy quotes from Spectrum senior VP Dan Finnerty, Dodgers president Stan Kasten, and even L.A. mayor Eric Garcetti, who certainly had bigger things to focus on. Maybe Garcetti had this quote tucked away in his files for years and asked his staff to finally release it.
Again, the timing of this couldn’t be more non-transparent.
== Since this all started, DirecTV, a satellite dish system that not everyone can access because of some housing structural limitations was in a predicament from the start, wasn’t going to pick up SportsNet L.A., for whatever price was negotiated, for whatever egos were getting in the way. It was payback time for Time Warner Cable, for all the previously negotiated channel deals they claimed were too expensive. As long as DirecTV held out, there would be no other cable system compelled to take this Dodgers exclusive regional outlet.
And with that, the narrative of “70 percent of Los Angeles can’t see” the Dodgers’ channel was rooted, accurate or not, and continued for half a decade.
Spectrum became the “bad cop” in this scenario, and the Dodgers were already secure with the $8.5 billion, 25-year deal, leaving the creators of this El Segundo-based venture do what they say they do best and figure out the distribution. It would change its name from Time Warner/Charter to shed that branding stigma. It could have benefited from a national Department of Justice antitrust investigation about collusion. There was local political hand-wringing. Occasional yarns about how the team was “missing a generation of fans” as each year rolled over with no distribution increase.
The Dodgers didn’t think they were being treated fairly in the media. All it did was complete a business deal in its favor, and supply the product. It was frustrated by its business partner, but officials weren’t allowed to publicly complain any longer, for fear of mucking things up more.
Ownership of El Segundo-based DirecTV, just blocks away from the Spectrum headquarters down Aviation Blvd., never needed to have a power lunch meeting and budge from its position.
The bottom line was not enough subscribers were leaving DirecTV, for whatever reason.
Then the threshold started to hit. Enough DirecTV subscribers canceled. Some got Spectrum. Some just gave up on the Dodgers, who wouldn’t even allow video streaming of the Spectrum feed for those who wanted it, and would have paid separately for it.
== Over the years, we saw potential tipping points, and brought in business experts to talk about it — experts now extracted by other media sources to become their go-to quote machines.
We suggested a media intervention with the big mucks who might force change.
The entire process of how this was negotiated sounded a warning for others (the Chicago Cubs) who were about to step into the same quagmire.
But Wednesday’s announcement now comes at a time when AT&T is fattening the DirecTV pig for sale at the media country fair. It needs to strike now.
Ever since AT&T paid some $49 billion for DirecTV in 2014 (with FCC approval granted in July, 2015), there was the “enterprise value” of $67 billion on it.
Since then, the media business changed. More were not only cutting chords to cable operators, but flipping off satellite services (including Dish Network), and the bar charts tell the rest. Subscribers are bailing as AT&T’s attempt to bundle customers with wireless, etc., wasn’t working. AT&T’s debt grew, even more with a Warner Media deal.
What could AT&T do, aside from stop sending satellites up to support the DirecTV mission back in late 2018? By late last year, they were already loudly dropping hints they wanted to cut loose DirecTV.
DirecTV’s deal with the NFL over “Sunday Ticket” expires, and the league moves it elsewhere. “NFL Sunday Ticket” has been DirecTV’s drug for sale for many years. It needs a new a dealer, as far as the league can see it. With it goes “The Red Zone Channel.”
It wouldn’t be a surprise of DirecTV finally adds the Pac-12 Networks for the same reason. That’s a channel competitor Dish Network already has, though. So if Dish wanted to scoop this up, based on FCC approval, it wouldn’t have to keep SportsNet L.A. Again, because we have no idea what the length of terms has been verified.
== Looking again at the press release about the DirecTV/SportsNet LA deal, there is no time frame to speak of. The likelihood of this “good faith” ending when some other media buyer comes along and decides SportsNet LA costs too much and starts stripping DirecTV for its parts is a practical business matter, with a long history.
This is AT&T seizing a PR moment with nothing of substance recorded. A deal of convenience as we’re led to believe.
It comes six weeks after DirecTV’s lead negotiator was let go. It had already cut loose Dan Patrick and Rich Eisen’s shows. DirecTV doesn’t all of the sudden have a change of heart. It has a chance of financial direction.
== So the hostage crisis is over?
By the time we started to believe Wednesday’s announcement/fraudulent reason to celebrate, others were beyond all that and just wanted to bask in the moment.
A moment of what? There are no games, of course, and the entire 2020 season could be wiped out.
Sure, the L.A. Times’ Bill Plaschke was more spot-on about what was already missed. But we can’t lament the past, when the future may be even more a house of cards. No one is talking beyond the talking points in the press release.
There is more logic in the analysis from Phillip Swan, aka TVAnswerMan (and a must follow): “I keep thinking that it simply doesn’t make sense that after six years, AT&T and DIRECTV suddenly saw value in SportsNet LA that they didn’t see before. It only makes sense if Charter lowered the price, and it only makes sense for Charter to lower its price for 2020. So, Dodgers fans, rejoice in yesterday’s news. But don’t be shocked if the celebration is short-lived.”
Until then, we’ll challenge headlines like this — listen, there was never a “blackout” but … go ahead and write whatever fits at this point, right?