DirecTV Profits By Regional Sports Nets

Root-Sports-ADirecTV CEO Mike White says when it comes to regional sports networks (RSN), it’s good to have seats on both sides of the table. The satellite operator owns three, and it negotiates to receive carriage payments from operators.

Marketplace insight gained in those negotiations, in turn, helps inform DirecTV on prices to carry RSNs itself.
“It helps us know what the real economics are of regional sports networks … we find when we’re in negotiations with Comcast or Fox on (their) RSNs that having some helps us in that regard,” White said at an investor event this week.
DirecTV’s three RSNs carry a Root Sports brand, operating in the Northwest (including Seattle), Rocky Mountains (including Denver) and Pittsburgh areas. DirecTV has been reducing its stake in the Game Show Network, but White believes the profitable RSNs remain an important asset.
White also said owning the Pittsburgh outlet helped in recent carriage negotiations with Time Warner Cable. The cable operator pays DirecTV to offer Root Sports in Pittsburgh. Recently, DirecTV concluded negotiations with TWC to carry its new RSN in Southern California with Los Angeles Lakers games.
White has been a vocal opponent of the carriage fees for sports content and DirecTV has implemented a surcharge for RSNs on new customers in areas of the country with more than one RSN, per the Los Angeles Times. White said that’s likely to be expanded within about 20% of the country, not to all customers.
“ I don’t see it as something you do 100% across the board,” he said. “I think it’s more for those metropolitan areas where sports are in my mind very high priced. You’ve got to do something to try and kind of recoup some of that cost from the consumer.”

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