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L.A. Lakers Blackout: DirecTV Goes to War Against Time Warner Cable.


The increasing popularity of expensive-to-carry regional sports networks has become a problem for cable TV operators.

MINYANVILLE ORIGINAL This year there's been little love lost between cable TV companies and content providers.

DirecTV (NASDAQ:DTV) and Viacom (NASDAQ:VIA) had a contractual skirmish in the summer that resulted in a 10-day blackout of Viacom channels for DirecTV customers before a carriage deal was reached. There was also Dish Network's (NASDAQ:DISH) months-long blackout of AMC (NASDAQ:AMCX), which finally ended on October 21.

A fundamental sticking point in the Viacom-DirecTV and AMC-Dish fights was the availability of content online, and how that would impact ratings for pay TV operators. Dish, for example, was unhappy that past seasons of AMC shows such as Mad Men were available online at venues like Netflix (NASDAQ:NFLX). Cable operators argue this lessens the exclusivity and cheapens the value of the content they buy. It doesn't help, of course, that content providers are asking for ever-increasing fees to carry their channels.

While Dish and DirecTV have managed to settle these disputes, they have encountered yet another content fee battle: This time, it's over sports programming.

This conflict is being played out in Southern California, where Dish and DirecTV are balking at the demands of Time Warner Cable (NYSE:TWC), whose new regional sports channel, SportsNet, owns the rights to the Los Angeles Lakers.

Time Warner Cable is asking pay TV operators to pony up $3.95 per month, per subscriber, to carry SportsNet and its Spanish language equivalent, TWC Deportes. Time Warner is also asking for the channels to be slotted into the most widely distributed programming packages of pay TV operators, whereas DirecTV would prefer to include SportsNet as part of a premium package that subscribers would have to pay extra for.

Verizon (NYSE:VZ), AT&T (NYSE:T), Charter (NASDAQ:CHTR), and Cox Communications have signed deals with Time Warner Cable, leaving Dish and DirecTV as the remaining holdouts. It is perhaps just as well for Dish and DirecTV subscribers in Southern California that the Lakers have had a dismal start to the season.

At least one Laker fan has left DirecTV over this issue
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