Dodger channel woes give Time Warner Cable revenue blues

Dodgers middle reliever J.P. Howell. Time Warner Cable's inability to distribute SportsNet LA is beginning to affect its bottom line.
Dodgers middle reliever J.P. Howell. Time Warner Cable’s inability to distribute SportsNet LA is beginning to affect its bottom line.
(Lisa Blumenfeld / Getty Images)

The SportsNet LA debacle is starting to affect Time Warner Cable’s bottom line.

Time Warner Cable lowered its revenue projections for 2014 Thursday because of its inability to distribute SportsNet LA, the new TV home of the Los Angeles Dodgers. The channel, which the Dodgers own, is managed by Time Warner Cable, which has been unable to sell it to other area distributors including DirecTV.

“Assume we do not sign affiliate agreements for the Dodger Network this year,” said Time Warner Cable Chief Financial Officer Artie Minson on a conference call with analysts to discuss the cable company’s second-quarter results.


The company said it was lowering its revenue projection growth for the year from 4.5% to as low as 3.5%. Operating income projections were lowered to 3.75%-4.75% from 5%-6%.

The unit that houses SportsNet LA saw its operating costs jump 56%. Profit for the unit dropped 26% to $173 million.

Earlier this week, in response to pressure from U.S. Rep. Brad Sherman (D-Sherman Oaks), Time Warner Cable said it would be willing to enter binding arbitration with DirecTV and other distributors to resolve the dispute over carriage of SportsNet LA. Other distributors have refused to carry the channel, citing the price Time Warner Cable is seeking. The standoff has left about 70% of Los Angeles pay-TV homes without access to the team’s games.

Federal Communications Commission Chairman Tom Wheeler also sent a stern letter to Time Warner Cable about its inability to close deals with other distributors.

For the quarter ended March 31, Time Warner Cable posted profits of $499 million, or $1.76 a share, up from $481 million, or $1.64 a share, a year ago. Analysts had estimated $1.90 a share. Revenue grew 3.2% to $5.7 billion.

The company lost 152,000 video subscribers, which offset the almost 70,000 broadband subscribers it added.


In Los Angeles, the company added video subscribers but Time Warner Cable Chief Executive Rob Marcus was reluctant to attribute the growth to subscribers signing up to get SportsNet LA.

Time Warner Cable is in the process of being acquired by Comcast Corp. The deal, which will be reviewed by the FCC and the Justice Department, is expected to close early next year.

Follow Joe Flint on Twitter @JBFlint.