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Saturday, March 29, 2014

Stan Kasten Wants You To Annoy Your Neighbors To Pay Off His Spending Habit

A couple days ago, I received an e-mail from someone named Amy Millstone at Time-Warner Cable, containing the following missive from Stan Kasten:
Hello!

This afternoon, Stan Kasten spoke to the media about various things and gave an update about SportsNet LA. Quotes below if you’d like to use them.

It’s incredibly important, as Stan said, for fans to speak up now and let their providers know that they want to watch SportsNet LA. Fan demand is really what makes the difference. Fans can do that by calling their providers at 844-I-NEED-MY, visiting www.ineedmydodgers.com, using the hashtag #ineedmydodgers or by contacting them directly.

All quotes from Stan Kasten, President and CEO, Los Angeles Dodgers

"I've been in the cable TV business my entire professional life, including 27 years at TBS, and I have never seen a better quality baseball broadcast than the one SportsNet LA now puts on."

"I am disappointed that deals haven't been closed yet...With the first regular season game coming on Tuesday, I am now concerned that some fans are going to start to not be able to see the games. And that's disappointing and shouldn't be happening.

"I do occasionally see rhetoric that is disappointing because it's disingenuous. For instance, when some cable providers say, 'Gee, we think the Dodgers should be a la carte.' All these providers know that there is not another team in all of baseball whose games are a la carte anywhere. Including, interestingly enough, on the cable systems owned by these same providers with their own RSNs. They don't do it for themselves and by the way those same providers have their deals at higher prices for bigger packages than have been offered to them right now.

"The other thing that's particularly irritating in terms of disingenuous rhetoric is when some of them say, 'We're not really seeing the demand for the Dodgers.' That doesn't pass the laugh test because you know about the attendance not just here, but we also led baseball in road attendance. We have the highest number of season tickets we've ever had; it is the highest in all of Major League Baseball. Last year our TV ratings didn't go up by 2% or 4%, they went up by 40% and look to be higher this year. So come up with some other excuse because the reality is, in the history of this franchise, it is likely that right now is the time with the greatest interest that our team has ever had."

"My suggestions to the fans that still do not have Dodger games is to tell your provider that you want the games. If you do that, you will get the games. They have to be told as many times as necessary that you want the games, that's what they're in business for. If you tell them that, they will provide it. And if it's not happening quickly enough for you, my other suggestion is to go to a provider that is providing it....Letting your provider know is at the end of the day what's going to get all of the games on TV."

On price: "Let me assure you that we're talking about market rates and very consistently what's out there now, and that's what's disappointing...This is not about price, the price is consistent with the market place. In fact, to be blunt, some of these people, and they know who they are, are already on their own systems paying more than the price that's out there to teams in smaller markets. That's the truth. This is not about price, it's about the negotiating game."

If you have any questions, let me know!

Amy

My point-by-point response:
  1. On the disingenuousness of "the Dodgers should be a la carte": Insofar as I know, this is essentially correct; not even YES Network is sold thus.
  2. On the increase in ratings signaling large interest in the Dodgers: Probably true for last year, but the variability merely speaks to a winning team versus a mediocrity. Indeed, how much a team's games gets watched on TV is a direct function of how good they are; for instance, Phillies' games ratings dropped 36% versus 2012 as it became clear the 2013 club would be no better than the prior year's (and indeed finished eight games worse). If you're a buyer — albeit indirect — of such a risky product, you're just as concerned about the possible downside (what you risk if they stink) as about rewards when the team wins.
  3. "Tell your provider that you want the games." I believe the nearly two years the Padres were blacked out for most cable customers in their own market should show the results such pressure exerts, i.e. almost none. I am unfortunately prepared to forego Dodgers games in 2014, and possibly beyond, thanks to the stubbornness of both my cable provider (Verizon) and Time Warner.
  4. Regarding the current price as reflecting the marketplace: Apparently Mr. Kasten thinks that cable providers will just hop to and pass on additional costs to their subscribers (or will negotiate other fees down). I find this at best farfetched, and perhaps delusional.
Wendy Thurm — who wrote the Dodgers preview in this year's Baseball Prospectus — published a fantastic piece in Fangraphs about how the Dodgers' TV deal may be the last such to go through. The Astros may actually have been saved from making a stupid and similar decision by a fluke of timing.

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