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Cable TV group criticizes plans for Fox-ESPN-WBD sports streamer

A television studio used by Fox Sports in Los Angeles. (Courtesy image)
A television studio used by Fox Sports in Los Angeles. (Courtesy image)

A group representing small and rural-sized cable television and broadband providers is speaking against a new joint venture formed between some of the country’s biggest broadcasters of sports programming.

On Wednesday, ACA Connects criticized plans laid out by Fox Corporation, Warner Bros Discovery (WBD)’s TNT Sports and the Walt Disney Company’s ESPN to develop and launch a sports-focused streaming service that will offer live access to the same football, baseball, hockey and other athletic events telecasts that currently air across broadcast and cable channels.

In a statement sent to The Desk, ACA Connects CEO Grant Spellmeyer said the plan disenfranchises cable television companies because it allows Fox, ESPN and WBD to offer their sports programming on an à la carte basis, a flexibility that traditional pay television providers have wanted for some time but have been prohibited from offering their customers due to bundling terms found in programming agreements with the broadcasters.

“The ‘house of cards’ in the video marketplace continues to wobble,” Spellmeyer complained. “Allowing the biggest media players to join forces — while locking out traditional linear cable providers from offering the same package at the same price — only gives even more power and leverage to the Goliaths to extract more money from customers of ACA Connects members.”

Spellmeyer said the planned streaming service — which has yet to be named — demonstrates that the television landscape operates in something other than a free market, one where broadcasters have incredible leverage over cable and satellite platforms.

“With customers facing higher prices and fewer affordable choices, there needs to be a level playing field,” Spellmeyer said.

Cable and satellite companies typically have to sign carriage agreements with broadcasters and cable network operators in exchange for the right to offer those channels to their subscribers. Those fees are passed along to cable and satellite customers in their bills.

Over the past few years, broadcasters have demanded more money for their channels as they seek to recoup sizable investments made in scripted, news and sports programming. Faced with the prospect of having to raise customer bills, cable and satellite companies have started resisting those efforts by rejecting demands for more money, which lead to extended programming blackouts where customers are unable to watch certain channels for weeks or months at a time.

Last year, one such dispute between Charter Communications and Disney led to a novel programming agreement by which Charter would purchase wholesale access to Disney’s streaming services in order to offer them to customers of their Spectrum TV service. The arrangement also gave Charter the flexibility to move certain Disney-owned channels to different packages, and drop some of the company’s lesser-viewed networks like Freeform and FXM.

The deal was seen as groundbreaking, but it is also something of an anomaly — a situation that has not been replicated in the months following that agreement. And it did little to stem the trend of “cord-cutting” — customers moving away from cable and satellite toward cheaper streaming services — with Charter reporting a loss of 248,000 video customers in the fiscal quarter after the Disney deal.

The forthcoming Fox-ESPN-TNT Sports streaming service is equally seen as groundbreaking, though few details have been released about what it will entail.

Streamers will be allowed to bundle the sports product with Disney’s Hulu, Disney Plus and ESPN Plus as well as WBD’s Max service, though it wasn’t clear if the sports streamer will be available to customers of cable or satellite plans in the future. Executives at Fox on Wednesday confirmed that the service will offer online versions of broadcast and cable networks, to include Fox, ABC and WBD’s general entertainment and news programming.

Pricing also remains an unknown, though people familiar with the product’s development said other sports rights holders like Comcast and Paramount were not invited into the joint venture because the current participants wanted to keep the price of the service low.

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About the Author:

Matthew Keys

Matthew Keys is the publisher of The Desk and reports on the business and policy matters involving the broadcast television, streaming video and radio industries. He previously worked for Thomson Reuters, Disney-ABC, Tribune Broadcasting and McNaughton Newspapers. Matthew is based in Northern California, has won numerous awards in the field of journalism, and is a member of IRE (Investigative Reporters and Editors).