So it came as no surprise last year that DirecTV started imposing a “regional sports fee” on its subscribers. The satellite provider admits that the fee, which is anywhere between $2.00 and $4.00 (and could actually grow higher at some point) was created in “an effort to manage rising programming costs,” yet it only affects new customers “in select zip codes” where DirecTV is obligated to deliver signals of “multiple sports networks” in their packages.
Now, it looks like cable operators have taken notice of DirecTV’s plan and are following suit.
Verizon has announced that some subscribers to its FiOS fiber optic cable service will begin seeing an RSN fee on their bills as soon as next month, and no later than the spring.
“Verizon has chosen a fee of $2.42 per month to address the skyrocketing incremental sports content costs associated with this popular programming,” confirms Verizon spokeswoman Heather Wilner, adding that they were in favor of this option, as opposed to “increased TV package charges” across the board.
At the same time, Verizon FiOS has created a new package, “Select HD,” for customers that could care less about live sports programming to begin with (or, if you prefer, an opportunity for cash-strapped families to have just a little of the “cable household” experience). The new channel lineup, at just $50 per month, has its pros and cons: You get CNN and MSNBC, but not Fox News. You get Centric, but not Comedy Central. You get the collection of “Music Choice” digital music channels, but not MTV (which these days, is a misnomer on MTV’s part).
Interestingly, Fox’s FX network is also included in this new non-sports-oriented “Select HD” package. FX has been known to carry a sporting event or two, but with the new Fox Sports 1 due to launch this summer, any sports broadcasts that may have aired on FX could easily end up on Fox Sports 1. Incidentally, Fox recently announced that Fox Soccer Channel, which hypothetically could have been relaunched as Fox Sports 3, will actually be rebranded FXX, gearing a younger demographic than the FX channel.
Getting back to the business at hand – the business of sports – how long will it be until Cablevision, Time Warner Cable, and the other cable operators begin conjuring up “regional sports taxes” for their subscribers? Especially now that Time Warner has heavily invested in rights fees for two popular Los Angeles sports franchises – the Lakers and the Dodgers – that will serve as the backbones of two new regional sports networks in Southern California? Los Angeles TWC subscribers will probably be the first ones to see some sort of RSN fees tacked onto their bills. New York City-area Time Warner Cable subscribers, who at this time last year were missing out on “Linsanity” as they had been engaged in an impasse with MSG Network, owned by TWC rival Cablevision, will also likely be hit with an RSN surcharge: the New York City area has four major regionals: YES Network (partly owned by the New York Yankees); SNY (partly owned by the Mets); MSG and MSG Plus (the latter of which was previously known as Fox Sports Net/FSN New York.
And what about Cablevision, who held out for the longest time (though about a month short of Time Warner Cable) in agreeing to carry NFL Network, since they did not see much value in a network that broadcasts only a handful of NFL contests every year? As long as they’re obligated to carry regional sports networks on many of their systems, you can bet they’ll also whip up an RSN surcharge. as well.
As for Verizon FiOS, the just-shy-of-$2.50 RSN fee will first apply to customers in three of the largest states, California, Florida and Texas, starting in February; Maryland and Virginia subscribers who opt to receive regional sports networks in their packages will start being imposed with the fee in April; all other FiOS customers, including those in New York City, will get hit with the surcharges in March.
If you’re a cable subscriber, it makes no sense complaining about these regional sports network surcharges, as long as regional sports networks exist. Ditto for national sports networks like ESPN, CBS Sports Network, NBC Sports Network and the soon-to-be-launched Fox Sports 1.
For as long as live sports demands high viewership and commands top dollar among cable outlets, such surcharges from cable and satellite providers are going to be the norm.
UPDATE, 2.21.12: It has begun. Cablevision has become the first traditional cable company (Verizon’s FiOS service is fiber-optic borne) that will impose what they officially call a “Sports Programming Surcharge,” which will be just shy of $3.00 per month, effective in April. “The rising cost of programming has resulted in this sports surcharge, which is similar to those introduced by other TV providers,” said a Cablevision higher-up in a press release. This will only affect customers who subscribe to Cablevision’s Family or Value packages.
Of course, for many years, Cablevision owned a regional sports network, MSG Network, until they spun off their interest in Madison Square Garden in late 2009.