Somers endorses cable sports cost lid

Jun 18, 2001  •  Post A Comment

A cable TV industry campaign to put a damper on soaring sports programming costs got a boost last week-in the form of a ringing endorsement from AT&T.
“Sports inflation has gone through the roof,” said Dan Somers, AT&T Broadband president and CEO, during a panel at the National Cable & Telecommunications Association’s convention in Chicago.
“We need to relook at this.”
At a subsequent press conference, Mr. Somers added that he wanted to see if the industry could agree to put the kibosh on sports programming costs on its own.
But if that doesn’t work, he said, he’d be amenable to governmental assistance.
“Sports inflation has to be dealt with,” he said.
In a separate session, Jerry Kent, president and CEO of Charter Communications, reiterated his proposal to check programming costs with legislation that would require sports networks to allow operators to offer sports channels out of basic tiers on an a la carte basis.
But despite this high-profile support for the concept, it appeared doubtful a legislative proposal could fly, in part because the sports networks would fight it strenuously.
“We very strongly believe a la carte is not a good business model for affiliates or ESPN,” said Rosa Gatti, an ESPN spokeswoman.
The NCTA itself remains sidelined on the issue because it represents both cable operators and sports networks.
“It’s an easier problem to identify than fix,” said Robert Sachs, NCTA president and CEO.

Charter’s Mr. Kent has alleged that more that half of his company’s double-digit annual programming cost increases are attributable to sports networks.
ESPN alone jacked up its rates 20 percent this year, reportedly to about $1.50 per subscriber.
But ESPN claims that its local avails account for an average of 80 cents per subscriber per month in advertising sales for cable operators, bringing the net effective rate for ESPN to about 70 cents per subscriber.
ESPN also contends that one of every five dollars in local advertising revenues for cable is generated by ESPN.
Also at the convention:
* Federal Communications Commission Chairman Michael Powell, expanding on remarks he first made in an exclusive interview with Electronic Media (EM, June 11), warned that excessive greed about the transition to digital TV and such issues as giving competitors fair access to their customers could spur a regulatory backlash. According to the chairman’s analysis, cable is now in an enviable financial and public relations position to move into the future. But complaints from consumers and competitors could quickly undermine the industry’s standing. “How well you can serve consumers will be vital,” the chairman said.
* To the applause of cable operators, Senate Majority Leader Tom Daschle, D-S.D., vowed to block efforts to rewrite the regulatory ground rules governing cable’s launch of broadband and telephone services, despite pleas by some of cable’s competitors to review the 1996 Telecommunications Act-the law that’s made the rollouts possible. “In this rapidly changing world, that foundation must remain stable,” Sen. Daschle said.
* Roy Stewart, FCC Mass Media Bureau chief, also told cable operators that the broadcast industry’s campaign to win must-carry rights for their analog and digital signals during the transition to DTV appear to be all but doomed. “They better wake up to the possibility that neither the FCC nor the Supreme Court will give them dual must-carry,” Mr. Stewart said. “If broadcasters think they’re entitled to it, they better make a better showing than they have so far.”