$5.00 for the new Dodgers channel.

Discussion in 'DIRECTV Programming' started by lipcrkr, Jan 28, 2013.

  1. Laxguy

    Laxguy Honi Soit Qui Mal Y Pense.

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    The corporate future of TWC Sportsnet wouldn't seem to have a lot of bearing on others' being willing to serve up Dodgers games. It's a matter of pricing, I believe.

    Could you expand on why the future ownership of that is critical?
     
  2. inkahauts

    inkahauts Well-Known Member

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    There was a theory a buyer would take a write down and make the channel cheaper. Doubt that's going to happen now no matter who buys it.

    I think DIRECTV would be great to negotiate and if they got a reasonable rate they should take it. Reasonable to me is 25 cents since all they did is show the same games they had before on other channels. All the pre and post games where there too. So they have added almost nothing but more chances to watch the ancillary things which could have been put on demand anyway. It's a worthless channel IMHO.
     
  3. Laxguy

    Laxguy Honi Soit Qui Mal Y Pense.

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    You can make the channel cheaper with or without a write down, with or without a new owner, with and without Yasiel Puig.
     
  4. milton

    milton Cool Member

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    From TWC's perspective, it is a sunk cost. However, going forward, it is a game of chicken. By the middle of this season, TWC will probably have gotten most of the subscribers that were going to switch. The problem then from DTV's perspective is the value of the channel to its remaining customers has fallen.
     
  5. Laxguy

    Laxguy Honi Soit Qui Mal Y Pense.

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    I'm sure DIRECTV® management has a very good handle on likely subscriber interest and levels of willingness to pay out $ over time. [Whether or not they remain in first place!]
     
  6. maartena

    maartena Hall Of Fame

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    What happened with Fox Sports --> Comcast Sports --> Roots Sports in Houston is a good example. They couldn't get a deal signed while being Comcast Sportsnet with anyone because they wanted too much money. After 2 years of that, the investors in the channel wanted to see some results, and with no deals in sight, they agreed to sell the network to DirecTV, who rebranded it into Roots Sports, and now turned it around to Comcast and sold the rights to them.

    It's all speculation of course, but any future merger may mean that either the network gets sold off as a separate entity, or they will take a loss as part of the merger and sign a deal with e.g. DirecTV at a much lower rate.

    I think DirecTV - since they have their HQ in Los Angeles, and historically one of the largest customer base in this area (also: no weather related issues with satellite, can someone explain to me what this "snow" is?) is very interested in actually PURCHASING this network, and that would be a much better deal, as now they can resell back to TWC. If this ever happens, TWC would almost have to sign seeing their footprint in Los Angeles (and they would probably incorporate that into the sale anyhow).

    In any case, Charter and Cox surely won't sign a deal with TWC for this channel, because they may get it for free if they do indeed merge, and they currently don't have to worry about people leaving, as NONE of the competition has the channel either. (Dish/DirecTV/Verizon/U-verse etc).
     
  7. Laxguy

    Laxguy Honi Soit Qui Mal Y Pense.

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    Thank you! I hadn't considered those scenarios.

    My original point was that a merger, sale, spin off, etc. was not essential to others (say DISH, DIRECTV) to be able to come to an agreement (mostly about $$, but there might be other factors.)
     
  8. d2001dstanley

    d2001dstanley Cool Member

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    I have to correct this. The Comcast SportsNet Houston situation is unique. Comcast formed the network as a partnership with the Houston Astros and the Houston Rockets. After 2 years, Comcast was losing money on this and filed for bankruptcy. In court, the judge approved a plan to restructure the network under the ownership of DirecTV and AT&T. The result is ROOT SPORTS Southwest region.

    Time Warner Cable does not have the same problems (other than lack of carriage) that Comcast SportsNet Houston had. They are under no pressure to sell SportsNet LA right now


    Sent from my iPhone using Tapatalk
     
  9. Gloria_Chavez

    Gloria_Chavez Godfather

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    Not necessarily.

    As someone who has worked in investment banking for many years, and strategy consulting before that, I can assure you that asset valuation in general, and determination of asset impairment in particular, is a nebulous area.

    From the most recent Time Warner Cable filing...

    *******************************
    Long-lived assets (e.g., property, plant and equipment and finite-lived intangible assets) do not require an annual impairment test; instead, long-lived assets are tested for impairment upon the occurrence of a triggering event. Triggering events include the more likely than not disposal of a portion of such assets or the occurrence of an adverse change in the market involving the business employing the related assets. Once a triggering event has occurred, the impairment test
    is based on whether the intent is to hold the asset for continued use or to hold the asset for sale. If the intent is to hold the asset for continued use, the impairment test first requires a comparison of estimated undiscounted future cash flows
    generated by the asset group against the carrying value of the asset group.

    The impairment charge would then be measured as the difference between the estimated fair value of the asset and its carrying value. Fair value is generally determined by discounting the future cash flows associated with that asset.

    http://d1lge852tjjqow.cloudfront.net/CIK-0001377013/667ba850-28a8-48c5-a119-2cda58c82c2f.pdf
    *******************************

    What is a triggering event? Whatever the CEO and CFO at Time Warner want it to be. If they believe within two years they will secure carriage with DTV and other PayTv distributors, they will continue to carry SportsNet LA at its current value.

    If they come to the conclusion that they will have to lower their asking price (monthly fees) to secure carriage, they will designate the asset as impaired, and write off the difference.
     
  10. Laxguy

    Laxguy Honi Soit Qui Mal Y Pense.

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    Quite right (I was on Wall Street for a stretch). Also, if there's a tax consequence from a write down that is big enough and they can take advantage of, boom! Write down.
     
  11. inkahauts

    inkahauts Well-Known Member

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    As others have said though... It's losing value every day to DIRECTV because everyday that goes by is another where it's obvious customers aren't leaving for this channel.
     
  12. milton

    milton Cool Member

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    Could TWC sell the channel to Charter for a "good deal" in order to put pressure on the bigger Directv? Or are there laws against selling the channel at a lower rate to Charter than Directv?
     
  13. James Long

    James Long Ready for Uplink! Staff Member Super Moderator DBSTalk Gold Club DBSTalk Club

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    There should not be a law ... but getting DirecTV to pay a higher price than anyone else for a comparable customer is unlikely. It would just solidify DirecTV's resolve to get the lower price. Most carriers push for clauses in their contracts that will give them a price that is at least as good as the competition.

    If Comcast were owned by TWC there would probably be some anti-trust problems to deal with. Otherwise giving one distributor a remarkably better price than a larger distributor one is trying to sign is just bad business.
     
  14. May 1, 2015 #714 of 921
    harsh

    harsh Beware the Attack Basset

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    While DIRECTV may not be losing customers, the rate at which they gain them may be impacted in some way. Of course there are other reasons that gross adds are feeling pressure.
     
  15. May 1, 2015 #715 of 921
    harsh

    harsh Beware the Attack Basset

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    There isn't law, but there is such a thing as Most Favored Nation clauses in contracts that say that you're deal must be as good as anyone's.
     
  16. May 2, 2015 #716 of 921
    Thundershock MN

    Thundershock MN New Member

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    These are pretty much a rhetorical questions. After reading the last few pages I'm curious about a few things. First, how exactly can TWC "merge" SNLA and TWCSN/TWCD? And, what would the Dodgers gain out of such an arrangement? Likewise, how exactly can TWC sell an asset (i.e. SNLA) they don't really own? The Dodgers ownership owns SNLA. The only thing TWC "owns" related to SNLA is a bunch of paper. If TWC itself is sold the new party would just assume the agreements. I suppose they could try and sell the paper/agreements (if the agreements allow them) to another party but, I'm not sure it would be of any value to another party. So, I think SNLA is pretty much linked to TWC (or, any future owner of TWC) for the long-term.

    That said if you want to see TWC strike carriage agreements with other providers I see one of two things happening at this point that might lead to that. The best case scenario is that TWC (or, any future owner of TWC) starts writing down sizeable chunks of the guaranteed payments to SNLA/Dodgers under their agreement. This is what a fair amount of people expected with the proposed TWC/Comcast merger. The newly enlarged entity could have "buried" the write down(s) as merger related expenses. The worst case scenario is that SNLA gets bundled in with TWCSN/TWCD at negotiation time when their first set of carriage agreements come to an end. Unfortunately, such a scenario would mean Lakers fans would be drug into this mess as well. But, it's really the only leverage TWC (or, any future owner of TWC) has available at this point.

    I think a lot of people don't fully understand just how convoluted the SNLA deal really is. It's really not comparable to any other rights deal or RSN.
     
  17. May 2, 2015 #717 of 921
    Yakuman

    Yakuman New Member

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    Time Warner Cable is losing well over $100 million a year on its SportsNet LA contract. So that's pressure. It's gotten to the point that the LA Times is openly discussion that people use MLB.TV plus a VPN to get around the blackout.

    On the the other hand, Comcast SportsNet Philadephia has kept the Phillies off DirecTV for over two decades.
     
  18. May 2, 2015 #718 of 921
    slice1900

    slice1900 Well-Known Member

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    If that use grows I wouldn't be surprised if MLB starts blocking the IP ranges of VPN providers.
     
  19. May 3, 2015 #719 of 921
    inkahauts

    inkahauts Well-Known Member

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    The Dodgers won't be on DIRECTV or any other cable companies for 24 more years. That's as realistic as any other possibility considering what they are asking for.
     
  20. May 3, 2015 #720 of 921
    milton

    milton Cool Member

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    What is the timing on (1) Lakers-TWCSN deal and (2) TWCSN-Directv deal?
     

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