October 27, 2020

Cable Customers Have Paid $3.5 Billion For Sports They Can’t Watch

By Karl Bode
Despite the pandemic suspending most major league sports play, cable TV consumers continue to pay for programming they can’t watch.

For fifteen years or more, consumers have complained about the high cost of sports programming. That’s particularly true for consumers who don’t watch sports, but are often forced to pay the sky high prices for sports programming as part of a bloated cable bundle anyway. One survey, a few years ago, found that 56% of consumers would ditch ESPN in a heartbeat if it meant saving the $8 per month subscribers pay for the channel. The “regional sports fees” tacked on to subscriber bills have also long been a point of contention because they’re often used to help falsely advertise a lower rate.

NY Attorney General Letitia James recently fired a warning shot over the bow of the industry, calling on seven major cable TV providers to begin offering refunds for nonexistent programming:

“At a time when so many New Yorkers have lost their jobs and are struggling, it is grossly unfair that cable and satellite television providers would continue to charge fees for services they are not even providing. These companies must step up and immediately propose plans to cut charges and provide much needed financial relief. This crisis has brought new economic anxiety for all New Yorkers, and I will continue to protect the wallets of working people at every turn.”

This being the cable TV industry, the requested refunds haven’t happened. AT&T (DirecTV) has let some users get refunds for premiums sports subscriptions (MLB Extra Innings and MLS Direct Kick), but none of the seven cable providers singled out by James appear to have changed their policies in the slightest or offered any refunds whatsoever. In a statement, AT&T makes it pretty clear that because broadcasters aren’t likely to give it a break, consumers won’t be getting a break either:

“We continue to monitor the situation closely and are in contact with programmers and sports leagues as they plan their next steps. Any rebates we receive from programmers and sports leagues will be provided to our customers.”

That’s generally been the same line trotted out by cable providers like Spectrum, which are quick to point out that there are layers of complicated contracts at play and more than a lot of uncertainty as to what happens next. And while that’s certainly true, we’re not talking about pocket change here. One recent analysis estimated that pay-tv subscribers have paid almost $3.5 Billion in cable fees over the last two months for live sports that never happened:

“…there are around 86.5 pay-TV households in the United States. On average, each of these households pays around $20 per month in fees for sports programming. That means pay-TV subscribing households in the US pay about $1.73 billion per month in fees for sports programming. And with two months of no live sports thus far, that means pay-TV companies like Comcast and AT&T have received nearly $3.5 billion in fees for sports programming that features no live sports.”

Somebody has to eat those costs, and congratulations, it’s going to be you, the end consumer. How long this goes on is uncertain, but with the FCC asleep on consumer issues, it’s unlikely the federal regulator will help. Fortunately (unlike the broadband sector), the rise in streaming competition means users have options. Cord cutting was already setting records in 2019, and with Sports being the only thing keeping users subscribed to traditional cable, cord cutting is expected to soar to even greater heights thanks to COVID-19.

Source:: https://www.techdirt.com/articles/20200601/07531044618/cable-customers-have-paid-35-billion-sports-they-cant-watch.shtml