Which Contract Is More Important? The Cable + You, or Cable + Supplier?

By Paul Maxwell Report Archives
Cover image for  article: Which Contract Is More Important? The Cable + You, or Cable + Supplier?

That's suddenly a good question, particularly in the who-pays-for-what OR what-not department. On one hand, the subscriber contracts with the cable operator for the sports channel (Hi! ESPN! Tennis Channel! et al), the cable operator (or linear channel provider) has a carriage contract in place with the sporting video provider (linear and/or VOD, SVOD ad infinitum) … but, given shelter in place, there ain't no sport being played, much less telecast (ignoring, of course, Michael Jordan's The Last Dance, which doesn't count as live, you-can-place-a-bet-somewhere real). Nobody is sheltering in place in the dugout or on the bench or on the court. And all of that revenue and all of that programming isn't happening.

So, the reality today is no subscriber is getting what he or she is paying for … nor, to be clear, is the distributor, the league or team.

So, who should be paying? … or not paying?
Is it fair to ding the teams?
Is it fair to ding the leagues?
Is it fair to ding the packager?
Is it fair to ding the infrastructure provider?
Or is it just tough luck for the subscribers?

That's where it stands today … and notwithstanding the New York Attorney General's attempt to blame the connection provider, that isn't how to unravel the problem. As Charter's Tom Rutledge noted, it isn't his fault … so take it up with the packager (or programmer).

The cable operator sort of agrees with the complaints … but they can't solve the problem with executive fiat…

So, call a foul ball?
Take away the love-30 30?
Take away the extra point?
…the touchdown?
Take away the goal?
Take away the "own goal?"
Probably not…

But wouldn't be nice if the infrastructure provider convened a series of meetings to resolve the question?

But that's not going to happen… it is all in the legalize… as my old friend and former colleague John Ourand writes in Sports Business Journal: "Even though we're coming up on nearly two months without live sports, ESPN is not close to breaching its affiliate deals, which call for a specific number of live event programming hours over a full 12-month period, according to multiple sources. If ESPN cannot meet those programming benchmarks after 12 months, it still would have an additional six months to remedy the situation. That means that, legally speaking, distributors can't start seeking rebates until September 2021 at the earliest."

Meanwhile, given how much everyone is suffering from the fallouts surrounding the pandemic, don't hold your breath about any kind of rebate without raising a huge ruckus.

Random Notes:

  • Meanwhile, two leagues are playing baseball in Taiwan and South Korea. With, as The Week (May 8, 2020) reports, "no fans, no spitting and mandatory masks and gloves for everyone but the players." But some will be on ESPN. Cue "After midnight" from Eric Clapton.
  • As for college sports playing again, that depends upon whether or not colleges have on campus classes… this year?
  • Of course, there's now eSports… so there's always something to bet… or watch. Or maybe nap.
  • And then, there's next year when some re-negotiating might arise… will ESPN still be able to demand the best the tier?

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