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Time Warner Cable says talks with DirecTV for Dodgers channel are over

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DirecTV subscribers may have to go without the Dodgers for this season and the foreseeable future.

Time Warner Cable, handling distribution of the new Dodgers-owned channel SportsNet LA, said DirecTV has ended serious negotiations.

"DirecTV has advised us that they will not carry the Dodgers this year, and they have walked away from the negotiating table," said Melinda Witmer, Time Warner Cable's executive vice president and chief video and content officer.

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A DirecTV spokesman countered that “nothing could be further from the truth" and added that "fans have already seen through Time Warner Cable’s deception, and this is yet another transparent attempt to manipulate all TV customers throughout the region."

With more than 1.2 million subscribers in Los Angeles, DirecTV has an almost 30% share of the market. Not having DirecTV on board is a big blow to the Dodgers and Time Warner Cable, which launched the channel in February.

No other major area distributors have been signed by Time Warner Cable, but Witmer said negotations with them are ongoing. About 70% of the market is without access to Dodgers games.

DirecTV has previously indicated that the price Time Warner Cable is seeking for the Dodgers is excessive and that it wants to sell SportsNet LA on an individual or a la carte basis.

Time Warner Cable has countered that its price is reasonable and that no regional sports networks, including those owned by DirecTV, are offered a la carte.

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"Given the very aggressive and unprecedented terms they put forward, it seems they are very uninterested in carrying the Dodgers," Witmer said. 

Witmer added that Time Warner Cable is being flooded with calls from DirecTV subscribers wanting to switch services to get the games.

"The phones are ringing off the hook," she said.

DirecTV countered, "we do intend to keep working to resolve this in the fan’s favor, we just didn’t agree to accept their latest outrageous proposal.  We will continue to engage with them until this gets resolved."

Although Time Warner Cable has not disclosed the price it is seeking from distributors, industry sources have pegged the fee for the first year of the contract at north of $4 per subscriber, per month with increases throughout the deal.

Witmer said the terms are fair and fall behind what Time Warner Cable pays for the Fox-owned YES Network in New York, which carries the Yankees, a Pittsburgh network that DirecTV owns that is home to the Pirates and a Fox-owned channel in San Diego that has the Padres.

"As a big buyer of regional sports networks, I'm very comfortable in saying the financial terms on the table for SportsNet LA are reasonable," Witmer said.

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Among the other demands Witmer said DirecTV made was one that would allow the satellite broadcaster to stop carrying the channel if the Dodgers went into a prolonged slump.

"I refer to this as the `fair weather fan plan,' " Witmer said, adding that under that standard, DirecTV would have stopped carrying its own Seattle Mariners network years ago.

Time Warner Cable secured the rights to distribute the Dodgers after agreeing to an $8.35-billion, 25-year deal to run SportsNet LA, according to a valuation by the Dodgers and Major League Baseball. The annual fee that Time Warner Cable will pay to the Dodgers starts at $210 million this season and increases dramatically through the life of the contract.

Before this season, Dodgers games were available on the Fox-owned channel Prime Ticket and the CBS-owned local television station KCAL-TV Channel 9. The rights fees for the team's games last season were about $50 million.

Without DirecTV, other distributors may also feel empowered to hang tough in negotiations with Time Warner Cable. Cox, Charter, FiOS, U-Verse and Dish have made no indication that they are near a deal to carry SportsNet LA.

Witmer said Time Warner Cable is "working hard to make deals with everybody" and thought DirecTV's decision may encourage Dish to rethink its previous public stance about not carrying the channel.

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"They may well see this as a great opportunity," Witmer said of Dish.

A condition of the Dodgers contract, according to people familiar with the transaction, is that Time Warner Cable has to cover the subscription fees for any distributor that does not sign on to carry the network. 

The lack of distribution is reflected in the early ratings for the games. The Tuesday and Wednesday Dodgers games both averaged just 37,000 viewers, according to Nielsen.

By comparison, the Angels, whose games are on the fully distributed Fox Sports West, have averaged well over 100,000 viewers in their games this week.

Fans have taken to social media to bash everyone over the dispute. Many bars that don't have Time Warner Cable also face potentially being hit in the pocketbook because of the impasse.

ALSO:

DirecTV plays hardball with sports

Finding places to watch Dodgers a challenge

Most Dodger fans shut out from watching team

Follow Joe Flint on Twitter @JBFlint.

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TelevisionTelevision IndustryEntertainmentLos Angeles DodgersDirecTV Group Inc.Time Warner Cable Inc.Media Industry
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