The Bullied Becomes the Bully

Stop me if you think you've heard this one before. Someone pays a lot for the local sports rights to a professional team and starts a new regional sports network. The cable operators (and other distributors like DirecTV, Dish Network, AT&T U-Verse and Verizon) complain that the channel is too expensive and that they can't possibly pass through this increase to their customers and they should be able to carry the new channel on a secondary tier, a sports tier or on an a la carte basis.

Today's example is the new regional sports network featuring the Los Angeles Lakers of the NBA. In a twist on the usual Time Warner Cable, the largest cable operator in the Los Angeles DMA is the owner of the rights. Cox, the largest cable operator in the San Diego DMA is complaining about the cost.

In February, Time Warner Cable was making the exact same complaints about the cost of MSG Network, the home of the disappointingly short-lived Linsanity-era New York Knicks.

There are three ways these disputes end. The most common is that the distributor agrees to carry the new sports channel on basic, possibly getting some sort of price break, sometimes after a long hold out (e.g., YES Network on Cablevision). Less commonly, the distributor decides not to carry the channel at all (but a critical mass of other distributors do agree to carry it -- the YES Network has never been carried on Dish Network). Still even less commonly, the new rightsholder throws in the towel and sells the rights to someone else (e.g., Victory Sports One, a venture of the Minnesota Twins).

So it goes.