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Message: [QUOTE="WickedOrange, post: 509535, member: 915"] (Page 2 of 2) “The cable industry has done everything it can to bundle programming and force consumers to buy things they don’t want,” said Gene Kimmelman, a former Justice Department antitrust lawyer. “Finally, one piece of their bundle has become so expensive that it may finally force the cable industry to shift gears and split the bundle out of fear of pricing its own customers out of the market.” Some executives at the distributors privately agree. They talk of a bubble caused by the high license fees commanded by sports leagues, and demanded by the networks that pay those fees. They say they want to keep costs down, and some have even threatened to drop low-rated channels from their lineups. But they continue to agree to pay more and more for sports. Chris Bevilacqua, an investor and consultant who has spearheaded the creation of several college networks, said, “If consumers were that upset by the costs, they’d be dropping their cable subscriptions in droves.” To date, that is not happening. Cable alternatives like Aereo (a service that streams broadcast networks via the Internet for a small monthly price) are sprouting up, but none are stealing share from the distributors that have been around for years. In fact, over the last two years ESPN has signed new long-term deals with seven of the top ten distributors in the country. What is more common are customers who lower their monthly bill, albeit temporarily, by leaping from one distributor to another. Verizon FiOS, perhaps testing the waters, announced a sports-free package of channels this week that is $15 cheaper than a similar package with sports. Along with regional sports networks and the ESPNs of the world, sports costs are baked into the television industry through the deals that distributors make to carry local broadcasters’ television signals. If a distributor is not willing to pay what a CBS-affiliated station wants them to pay, for instance, its customers may miss out on the Super Bowl, which is Feb. 3 on CBS. Companies are rarely willing to take that risk as nothing provokes the public quite like missing a sporting event. Time Warner Cable’s blackout of MSG Networks, which carries the Knicks, rankled thousands of customers last year; Gov. Andrew M. Cuomo eventually put pressure on both companies to make the deal that ended the blackout. David Goodfriend, the chairman of the Sports Fan Coalition, said sports leagues were the root of the problem, because they “get exemptions from federal antitrust laws so they can legally collude and drive up prices for television coverage of the games.” The coalition wants to cut what it calls “vast public subsidies.” Washington regulators have not shown a special interest in the subject. When Mr. Malone, speaking to The Los Angeles Times, brought up government intervention in sports rights costs, he said that “usually markets have a way of correcting themselves.” [/QUOTE]

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