UPDATE 1-Clock runs down for Lakers' TV carriage deals

Thu Sep 13, 2012 12:50am BST

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By Lisa Richwine

LOS ANGELES, Sept 12 (Reuters) - Time Warner Cable Inc , which outbid Fox Sports for the local rights to air Los Angeles Lakers games, faces the prospect of an opening tip off on Oct. 7 without deals to reach fans of the NBA team in more than half of the area's homes.

So far, the only fans able to watch local broadcasts of new Lakers stars Dwight Howard and Steve Nash will be the 2 million who subscribe to Time Warner Cable. None of the area's other half-dozen pay TV providers agreed to carry the new Time Warner Cable SportsNet or its Spanish-language sister, Time Warner Cable Deportes.

The channels launch on Oct. 1 with live studio shows, classic games and original programs related to the Lakers, the Galaxy professional soccer team and other local sports.

Executives are working to sign other carriage deals before the first Lakers pre season game on Oct. 7, said Mark Shuken, senior vice president and general manager for Time Warner Cable's regional sports networks.

"It's getting close," Shuken acknowledged in an interview. "This pace, and this negotiating timeline, is consistent with virtually every (regional sports network) launch."

Despite recent acrimonious negotiations between operators and media companies that left some channels dark, Shuken says there is still time.

"We are making it very clear to the fans that we will be up and running October 1 and look forward to having agreements with all of their cable and satellite providers," Shuken said.

Time Warner Cable needs distributor fees to help pay for the hefty contract it reached with the Lakers in February 2011. The local broadcasting rights will cost about $2 billion over 20 years, Barclays analyst James Ratcliffe estimates.

Carriage negotiations often stretch to the final days or hours and pay TV providers are not ready to make a deal yet.

"We understand that the Lakers are popular sports programming, but that programming comes at an extremely high price," said Todd Smith, spokesman for Cox Communications. The company aims to keep costs "as reasonable as possible" for all customers, he added.

Charter Communications said it wanted "good value" for subscribers.

"Our customers realize there is a direct connection between the high cost of sports programming today and their cable bill," Charter spokesman John Miller said.

At least 3 million people in the greater LA market use services other than Time Warner Cable, analyst Ratcliffe said.

The biggest operator Time Warner Cable needs is satellite provider DirecTV, which has about 1.3 million subscribers in the LA area, Ratcliffe said. DirecTV recently kept Nickelodeon, MTV and other Viacom Inc channels off its service for nine days in a fee dispute.

DirecTV spokesman Robert Mercer said the company was in discussions with Time Warner Cable and expected to provide an update on the talks closer to the start of the NBA season.

A spokesman for rival satellite operator Dish Network Corp did not respond. Officials at Verizon Inc and AT&T, which also provide TV service in the LA area, had no comment.

NBA Commissioner David Stern said he was "very optimistic" new distributors would sign before the Lakers' first regular season game on Oct. 31, but he conceded some fans might miss early games.

"My guess is there'll be some delay in some cases, but eventually deals will be made," Stern said in an interview.

Analyst Ratcliffe agreed.

"The probability of a long-term holdout is very low," he said.

For its two LA sports channels, Time Warner Cable is seeking an average of $3.95 per subscriber from distributors in the immediate area to carry both channels and lower fees for farther regions.

The price for the two networks is higher than any single regional sports channel except Comcast Corp's $4.02 price in Washington, according to research firm SNL Kagan.

In addition to the Lakers, the Time Warner Cable channels will air the Galaxy Major League Soccer team, the Sparks professional women's basketball team, local college football and basketball, and high school sports. The Deportes channel will have separate production teams and announcers to tailor programming to a Latino audience, Shuken said.

Time Warner Cable also says it will be the first regional sports channel to offer digital viewing for pay TV subscribers to watch games on mobile phones, tablets or computers.

The company would like to bring viewers the next big prize in the Los Angeles market: rights to air Dodgers baseball games starting with the 2014 season.

The current rights holder, News Corp's Fox Sports, began preliminary talks in May on a new multi-billion dollar deal. Fox has a six-week exclusive negotiating period that begins Oct. 15. Others can step in after that if no agreement is reached.

"If those rights become available for us to bid on, we would be interested in them," Shuken added.

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