It’s become the $11 billion question is: How can Time Warner Cable get away with starting up its own Lakers-centric channel, then help fund the Dodgers with the launch of their own channel, with the end game eventually force Southern California TV viewers to foot the bill for the bulk of it without the option of opting out?
Max Blecher has already invested $1,435 into hopefully finding a feasible answer to that.
That’s the filing fee paid by the Los Angeles-based lawyer Tuesday on behalf of four plaintiffs and “all others similarly situated” in a potential class action complaint this week in L.A. Superior Court. It seeks “restitution and injunctive relief” from TWC for the $100 annually that that subscribers of the largest cable company in Southern California must pay for TWC’s SportsNet, Deportes and the upcoming SportsNet L.A. because they have no option of opting out of the enhanced tier package to pay for any of them on an a la carte basis. The Dodgers and Lakers are also named in the suit for being co-conspirators.
There’s all the usual mind-numbing legalese jammed into the 11-page document. But then again, it is a California judge’s judgment they’re trying to impart upon here.
In describing how TWC paid $3 billion for the 20-year rights fees to the Lakers in 2011, it notes how “the humongous costs” have been passed onto subscribers to the tune of about $4 a month. It then recounts the “incredible price of” $8 billion for the 25-year deal TWC came to with the Dodgers starting in 2014.
It calls TWC’s channel bundling as “unethical, oppressive and unscrupulous. There is no practicable way consumers could avoid this injury.”
And you thought it was painful to watch Kobe Bryant snap his Achilles just before the playoffs.
“They’re ripping off dollars from people who can’t afford it,” Blecher explained this morning in terms even Metta World Peace could get his head around.
Blecher Collins Pepperman & Joye is a “sophisticated” boutique law firm “known nationally for prosecuting and defending precedent-setting cases involving antitrust, unfair competition and complex business issues,” because it says so on its website.
By the way, it represented the L.A. Memorial Coliseum Commission in the early 1980s to successfully litigated against the NFL, who tried to block the Raiders from relocating to L.A. from Oakland. The firm then helped the Clippers fight against the NBA in allowing them to relocate from San Diego to L.A. in 1984.
At the moment, Sen. John McCain is spearheading a TV Consumer Freedom Act of 2013 that pushes for an la carte TV business model. Blecher said this TWC case is along the lines of a lawsuit he spearheaded up five years ago in federal court that fought expanded basic cable rules, but he noted the case was dismissed by an “antediluvian” appeals court panel that said the allegations were not spelled out correctly.
“This Time Warner suit is part of the much larger syndrome where the programmers do two insidious things – make the cable companies take all the crap they churn out, and then explicitly in their contract say they have to put them on an enhanced basic cable and cannot sell them a la cart or in a smaller package,” said Blecher.
The four plaintiffs – from L.A., Long Beach, Orange County and Pasadena – are all considered “non-sport fans” tired of footing the extra payments in their monthly bills for sports-centric channels, Blecher insisted. They can’t simply drop TWC and take a different option like DirecTV, Verizon Fios or AT&T Uverse because they also have hiked fees in response to agreeing to carry the TWC sports channels.
This case hinges on a judge enforcing Section 17200 of the California Business and Professional Code, a broadly-worded statute that fights “any unlawful, unfair or fraudulent business act or practices.”
So why should a sports fan be interested in how this could turn out, beyond his own freedom of choice? Because if the current socialistic system is changed, and the cost is not spread amongst every customer, it would dramatically drive the prices up on each of the channels based on a smaller population of consumers wanting them.
Think of the current $5 a month for ESPN at least doubling. The same for a TWC channel or two as well.
“But at least people finally get a choice,” said Blecher, noting that’s all he could hope to have happen in a best-case scenario, as well as some restitution for those who’ve already paid for the Lakers’ TWC channels this past season but did not want them.
If it seems like something better suited for an individual to make noise about in a small-claims court, Blecher warns that from his company’s research, 60 percent of all Southern California TV viewers do not want to pay extra for sports channels whose costs continue to expand as rights fees to live sporting events increase.
One by one will be least effective than if class is in session.
All of this comes perhaps coincidentally as a New York sports and media business summit allowed Fox Sports Media Group co-president and COO Randy Freer to be quoted in a story as saying that sports continues to be “ ‘must-have’ programming … (and) if it’s must-have, it can’t cost too much … sports is undervalued and it continues to be. When you look at the cost of actually going to a sporting event versus watching every event you’re getting at home, it’s still an incredible bargain.”
(See how much of a bargain the new Fox Sports 1 will be on your monthly bill when it launches in August).
Our cynical side says this will be a case that drags on for a few months as TWC files motions to dismiss it on various counts, while Blecher leaps more hurdles to make is class certified.
If the end game is a bunch of vouchers are handed out to wronged customers who can just apply toward future bills, with lawyers getting their legal fees paid, is that really a victory?
Our inquisitive side wonders if a state court that’s more protective of consumer rights, rather than a federal court considered to be more pro-business, won’t accept this crafted document as just the right way to make a statement and start a wide-ranging ripple effect.
Which channel can we watch this all play out on?
“Our most successful outcome will be establishing a way for people to get out of paying for something they don’t want,” said Blecher. “It goes back an analogy that Cablevision used three months ago in its suit against Viacom – buying cable should be like going to the supermarket. You buy carrots and oatmeal, but then you get to the checkout stand and someone says, ‘Here’s a case of Pepsi you have to buy, too.’ Essentially, that’s what’s going on here.”
At least give us the choice of switching it out for Diet Pepsi, and, please, in those cute little bottles? Like the ones Beyonce promotes?