FOUL BALL! U.S. Department of Justice Sues DIRECTV (AT&T)

The Cubs vs. Indians in the World Series; Donald Trump vs. Hillary Clinton in the presidential race, and now this: U.S. vs. DIRECTV in a Dodgers doozie. Can this year get any weirder?

Sports Fans Coalition members will remember when we called for Dodgers games to be made more available to the dedicated fans in Southern California who pay for tickets and subsidize the team in many ways. 

We called out Time Warner Cable, the owner of regional sports network, “SportsNet LA,” which holds exclusive television rights to all Dodgers games.  When Time Warner bought those rights, most Dodgers fans around L.A. discovered that their cable or satellite provider no longer carried the Dodgers games.  We said that Time Warner Cable was charging too high a price for the games and keeping fans in the dark, unable to watch their team.  We called upon California and federal regulators not to approve the Comcast/Time Warner Cable merger unless Dodgers games were made available to all fans in the market (the merger was blocked, anyway).  We praised Charter Communications for committing to make Dodgers games available on all Charter systems once it acquired Time Warner Cable.  

In other words, we pushed for fans to be able to watch the games.

Then today, Uncle Sam drops this bombshell:  the government is suing DIRECTV (and its new parent, AT&T) for violating the law by colluding with competitors, who apparently all agreed not to carry the games.  It seems that not only Time Warner Cable, but many of the pay-TV companies serving L.A. were actively working to keep Dodgers games off their systems and away from fans.

WTF, you ask?

Here is what the U.S. Department of Justice Antitrust Division is alleging in court papers filed today:

DIRECTV talked to all the big cable companies in the L.A. market to see if they were planning to carry the Dodgers network owned by Time Warner Cable.  DIRECTV wanted to learn if any of its competitors would carry the Dodgers, or if they all could agree not to carry the games because the price –they felt—was too high.  The U.S. government asserts that DIRECTV coordinated with cable operators around greater L.A. to make sure that none of them carried the games, which meant that DIRECTV itself would not feel competitive pressure to carry the games.

The result?  Most Dodgers fans in L.A. could not watch their Major League Baseball team on TV.

There are so many things wrong here, it’s hard to know where to start. 

Time Warner Cable was greedy because it hiked up the price for Dodgers games charged to other TV distributors.  Maybe it wanted a de facto exclusive?  Who knows.  But now we learn that all those competitors might have been working together purposefully to keep those games away from their subscribers because if they all did it, none of them would have to pay a lot for the sports network and none would suffer too much competitive harm in the marketplace.

Once again, fans are treated like pawns in a billionaire’s game of chess. 

Once again, fans pay their taxes, pay their cable bills, support their team, and get screwed.

Once again, the league wins either way (they get paid for the television rights) and the media companies win, but the fans who just want to watch their team lose.

What can be done about it?

Simple: Prohibit leagues from keeping games from fans. 

We should prohibit leagues from awarding exclusive television rights, or require that all games be made available either on broadcast or over the Internet.

For example, in this case, if MLB and the Dodgers had never granted exclusive TV rights to a regional sports network, there wouldn’t be an issue.  Fans could watch the games on free, over-the-air broadcast, if the deal went to a broadcaster.  Or, if the league conditioned its grant of TV rights on widespread distribution to every cable or satellite subscriber who wanted to get the games, SportsNet LA would have been available on all cable and satellite systems serving L.A. Finally, MLB and the Dodgers could have said, if you can’t get SportsNet LA, you can stream the games on  Either way, no fan would have been shut out.

Sports Fans Coalition has supported changes in the law such that sports leagues only get their antitrust exemption and other public benefits if they make the games available to all.

In this case, the Department of Justice can demand things from DIRECTV as part of a consent decree.  At the very least, it would be nice to see fans get access to the games no matter how those fans consume their video.

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  • David Goodfriend
    published this page in Blog 2016-11-03 17:31:31 -0400