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Time Warner Cable sweetens deal again for Dodgers TV channel -- and still no takers

In a last-ditch effort to strike a deal before the start of the new baseball season, Time Warner Cable has once again sweetened an offer to other pay-TV providers in hopes of winning wider carriage for the Dodgers' TV channel in Southern California.

But there still are no takers — increasing the likelihood that Monday will mark the start of a third season without an end to the bitter stalemate over distribution of SportsNet LA, the television channel owned by the Los Angeles Dodgers.

The two-year dispute highlights the changing economics of cable television. Pay-TV operators are determined to hold the line on rising programming costs in an effort to retain their customers. They are worried that loading up expensive sports channels will drive up monthly bills and encourage more customers to cut the cable cord.

Squeezed out are Dodger fans irritated by the prospect of missing Hall of Fame broadcaster Vin Scully's final season in the Dodgers' broadcast booth.

“This situation is so maddening,” said Bill Waxman, 65, of Simi Valley, who has followed the Dodgers for decades but gets his TV service from AT&T, which does not carry the channel. Waxman said he has written letters to the Dodgers owners — including Magic Johnson — the commissioner of Major League Baseball and even the head of the Federal Communications Commission, to no avail.

“For years, the Dodgers were the team in our living room. They were the soundtrack of our summers,” Waxman said. “We get to see the Angels, the Lakers, the Clippers and the Kings, but we can't watch the Dodgers.”

Customers in about 1.8 million homes in the Los Angeles region that receive TV service from Time Warner Cable and Charter Communications have the channel in their lineups. But there are an additional 3 million homes in the metropolitan Los Angeles area without SportsNet LA. Some customers, like Waxman, are not interested in switching providers because they like their current bundles of TV and Internet service.

Time Warner Cable confirmed Tuesday that it has proposed a new deal — its second offer in a week — to try to coax AT&T, which now owns the satellite service DirecTV, as well as Cox Communications and other pay-TV providers back to the bargaining table.

Last week, Time Warner Cable acknowledged that it had cut the price of Sports-
Net LA by 30% for one year to try to end the impasse. But pay-TV providers balked, saying the price of the channel — offered this year for about $3.50 a month, per customer home — was still too high.

In 2015, the company charged an average of $4.90 a month per subscriber home, according to consulting firm SNL Kagan.

Pay-TV operators privately acknowledged that they were wary of signing a one-year deal with Time Warner Cable. They worried that the price of the channel would soar within a couple of years so that Time Warner Cable could recoup some of the costs of its expensive arrangement with the Dodgers' owners.

Time Warner Cable now is offering a six-year deal. The first year would be offered at the lower $3.50-a-month introductory price, with a slightly higher rate in subsequent years, according to one person familiar with the proposal who asked not to be identified discussing sensitive deal points.

Time Warner Cable declined to discuss details of its latest offer.

“We have, in fact, extended another offer to AT&T/DirecTV that is longer than one year,” said Maureen Huff, a Time Warner Cable spokeswoman. She declined to elaborate.

There are several reasons the other pay-TV providers continue to refuse to play ball. One is that Time Warner Cable is in the process of being acquired by another firm, Charter Communications, and some providers are waiting to see whether Charter offers the channel at an even lower rate.

Even with the price cut, SportsNet LA remains one of the highest-priced TV channels in the nation.

Pay-TV executives also noted that the value of the channel continues to diminish because the most ardent Dodger fans already have switched to a provider that carries the channel. The customers who remain have not been as bothered by the blackout, making these executives less motivated to spend a lot of money for SportsNet LA.

“We know that the Dodgers are popular sports programming for select customers, but that programming comes at an extremely high price for all customers,” said Cox Communications, which provides service in Palos Verdes, Santa Barbara and parts of Orange and San Diego counties. “We will continue to work with Time Warner Cable-SportsNet LA to fight on behalf of all our customers, not just sports/Dodgers fans.”

Another reason for the reticence is that several pay-TV operators experienced buyer's remorse after they agreed in 2012 to carry Time Warner Cable SportsNet, which broadcasts Los Angeles Lakers games. That channel is offered for about $4 a month, per subscriber home, according to SNL Kagan.

Time Warner Cable launched that network, and then the Lakers fell apart. TV ratings for games sank, and DirecTV and other pay-TV operators do not want to get stuck with two costly sports channels that draw small audiences.

Some fans blame the Dodgers organization as much as Time Warner Cable for the situation.

“It is a truly pathetic gesture by the Dodgers, a real slap in the face to fans who have followed the team for years and years,” said Kevin Holmes, 63, who lives in Lake Arrowhead. His provider, Dish Network, does not carry the channel. “There is no such thing as loyalty anymore.”

There is one wild card in the dispute. Later this week, Frontier Communications will take over Verizon FiOS systems in three states, including California. That company plans to review its offerings and might make some adjustments.

“We will evaluate the channel lineups and other products and services that we would like to provide our new customers,” said Steven C. Crosby, a Frontier spokesman. “But we don't plan on making any changes right now.”

Time Warner Cable's sweetened offer for SportsNet LA was designed to entice DirecTV, in particular. Under the deal, SportsNet LA would be offered in the second and subsequent years at roughly the same price that DirecTV sells a channel that it owns in the Seattle market, according to the knowledgeable person.

DirecTV owns the Root Sports Northwest channel, which provides coverage of the Seattle Mariners and two soccer teams. This year, pay-TV operators pay an average cost of $3.84 a month per subscriber home for that channel, according to SNL Kagan.

AT&T declined to comment Tuesday.

The L.A. area is not the only market where a dispute over distribution of a regional sports network is raging. In the New York region, cable giant Comcast Corp. dropped the Yes Network, which carries New York Yankees games.

Copyright © 2016, Los Angeles Times

UPDATE

7:50 p.m.: Updates with additional details and background

Originally posted at 3:42 p.m.

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