Friday, April 4, 2014

Brief thought this morning on the RSN business.

A question I pose to you, with a brief setup beforehand: This ran through my mind this morning and has very little to do with college sports and more about the RSN business & the possibility of a Time Warner/Comcast merger.

Comcast proposed divesting some of the customer base that would make up a combined TWC-Comcast.  I don't know if that means they'd sell it off to another company or spin it off into its own company.

Two markets where Comcast and TWC are having a bit of trouble with regional sports networks they manage are Houston (Comcast) and Los Angeles (TWC/Dodgers RSN).  Granted the TWC issues are in the early stages, and I don't know any of the legal implications around doing this, but do you think a merged Comcast-TWC would consider divesting itself of one or both of these markets to wash their hands of a deal that they might consider unfavorable?  Both markets are top ten markets and I would believe to be big money markets in terms of advertising sales and systems, but Comcast's position in Houston doesn't seem to be very favorable to them and maybe they would consider the Dodgers deal to be a bad deal and want no part of it.

Just thinking out loud, would love to know what you think.  Like I said, I don't know the legal obligations are here and if the FCC would impose any restrictions on a merger that would force a merged TWC-Comcast to stay in these markets for X number of years or be forced to make good on these deals.


Thomas said...

Actually Matt< I think Comcast sees a merger with TWC as a way to boost its RSN portfolio, especially in LA (Dodgers/Lakers) and New York (Mets). If those networks can be rebranded as Comcast SportsNet then it would give them a meaningful RSN presence in the 4 largest media markets, and 8 of the top 10.

Matt Sarzyniak said...

I do agree that it would provide a boost for them in LA but can they do it with the Lakers RSN and forego the Dodgers, or vice versa? Would Comcast try to tie both channels into a single network if they could? Again, just thinking out loud, or in this case, typing. I don't know if Comcast would look at this and say "I want to be in this market, I want to have a sports presence, but this deal is beyond our reach." There are absolutely pros-and-cons to it.

You bring up a good point about NYC as they would absorb TWC's 27% stake in SNY to bring their total to 35%, but the Mets are still the majority owner at 65% and may want to keep the SNY name instead.

Morgan Wick said...

This seems like it'd be incredibly short-sighted; the CSN Houston and SportsNet LA messes are symptoms of a larger backlash against regional sports networks and their impact on cable bills, and washing their hands of them won't inoculate Comcast against running into similar issues going forward. What Comcast might consider is whether they want to merge TWC's two RSNs into one to put more pressure on carriers - the Bay Area is the only place where Comcast owns two RSNs and it's not clear how Comcast could come up with two names for two RSNs in LA like they do there - but a significant part of the value in the Dodgers deal lies in the SportsNet LA name (it's not insignificant that the "LA" in the logo is formed by the Dodgers cap logo), so a significant name change might not be possible, a merger heavily resisted, and Comcast might be better off "SNY-ifying" SportsNet LA. Remember, people thought TWC might put the Dodgers on TWC SportsNet to begin with, because that would make sense.

Thomas said...

I think there would be more value to Mets to be part of CSN brand. SNY can change to CSNY real easy. SportsNet LA can become Comcast SportsNet LA. I can see Comcast trying to merge LA channels as a possibility. CSN is a pretty powerful brand in the world of RSN's. Its on par with FSN. And Comcast is used to sharing the ownerships of their RSN's with teams (Chicago, Houston, Philadelphia, Bay Area). Also possible they use the merger as a reason to rebrand all of their RSN's from CSN to NBC Sports. This was speculated, and even suggested by Dick Ebersole,during Comcast's purchase NBC Universal.