If the Lakers are considered the New York Yankees of the NBA, they’re swinging for the fences in creating what could be the biggest change in the Southern California sports TV landscape over the last several decades.
In a sweetheart deal announced on Valentine’s Day somewhat similar to what the Yankees did in starting their own YES network, the Lakers announced a 20-year agreement with Time Warner Cable to create two exclusive regional cable channels — one in English, and a ground-breaking one in Spanish — that will carry each game, home and away, starting with the 2012-13 season.
Terms were not disclosed but industry sources estimate that hundreds of millions that will change hands — more likely at least a couple of billion dollars when all is said and done — this will be one of the biggest sports regional network deals in cable TV history.
The Time Warner deal begins in 18 months, when the Lakers’ current contracts with Fox Sports West and KCAL-Channel 9 expire after the 2012 season.
Lakers owner Dr. Jerry Buss, a force behind launching the Prime Ticket regional network to spotlight his team 25 years ago, said in a statement: “The Buss family is thrilled to join forces with Time Warner Cable in building the TV home for Lakers fans. Time Warner Cable has been producing quality sports programming for over a decade and the Lakers have been producing championship seasons for even longer. I am particularly proud of being part of the first ever Spanish-language RSN in the country. Together I’m confident we will delight our fans.”
Time Warner Cable, available in two million Southern California homes with an additional 500,000 in the Lakers’ regional coverage of Nevada and Hawaii, will make the yet-to-be-named channels available to all cable and satellite dish companies, just as FSW and Prime Ticket are today, said Melinda Witmer, TWC’s senior vice president and chief programming officer.
She said while 90 percent of the homes receive cable or dish TV reception, leaving some out who can not afford it, research bears out that “most consumers get their TV viewers through a multi-channel provider. Our experience is that Time Warner has a large footprint and the bulk of basketball fans through the country get their sports through a cable regional sports network.”
The trick for Time Warner will be to generate demand for its Lakers channels to have cable systems put it on their accessible tiers over the next 18 months, which involves negotiating sub fees and resistance from competing companies.
While FSW takes the most direct hit from the deal, it maintains local TV rights to the Dodgers, Angels, Clippers, Ducks, Kings, USC and UCLA sports game packages. The Dodgers and Angels have made overtures about starting their own cable channels in the past — but the Lakers have apparently beaten them to it.
A Fox spokesman issued a statement from the network: “Fox made an offer to the Lakers that would have paid them one of the highest local TV rights fees in professional sports. We did not believe that going higher was in the best interest of our business or pay TV customers in Los Angeles, who will bear the cost of this deal for years to come.”
KCAL Channel 9 added in a statement: “We look forward to continuing to broadcast the team’s games to all its fans across Southern California through the completion of the 2011-12 season. Beyond that, KCAL 9 will continue to make local sports a big part of the station’s identity.”
Tim Harris, the Lakers senior VP of business operations and chief marketing officer, said the team had been talking to Time Warner about this deal for more than a year, and “what kept driving us forward was synergy” with Time Warner enabling the team to more with interactive elements, pre- and post-game shows, and other programming on off days.
Last August, Buss was asked if there was a time when he thought the Lakers could on their own regional channel, like the Yankees and Mets.
“I suppose so,” he said, a week after he was inducted into the Basketball Hall of Fame. “I’ll tell you, I’m the wrong person to ask about that now. (Daughter) Jeanie (who runs the business side of his teams) is the one. Like with any business you look at every opportunity. Whether you’re serious about it or not is another story.”
Forbes magazine recently put the Yankees’ value at $1.6 billion, with YES network paying the team $100 million on top of $84 million in rights fees in 2009. Forbes lists the Lakers’ $643 million worth second in the NBA to the New York Knicks’ $655 million.