Altice USA CEO Dexter Goei is talking to sports networks about possible rebates on affiliate fees paid during times when no sports are played, adding that while it is still early days, he does expect to get at least some relief.
"We’ve had initial discussions with all of the major sports programmers, both on a regional and national basis,” Goei said on a conference call to discuss Q1 results. "We’re engaging with them currently on these discussions.”
Goei revealed the talks as Altice USA reported the loss of another 42,000 pay TV customers in the first quarter. The cable operator's TV base now stands at only 3.14 million subscribers. Altice USA lost 10,000 video customers in the first quarter of 2019.
Goei pointed to a letter he and other providers received Wednesday from NY State Attorney General Letitia James, asking operators to investigate offering rebates to customers for the lack of sports programming.
“We’re in complete agreement with the New York AG,” Goei said. “So this becomes a contract-by-contract discussion with each one of the providers. I can't give you any particular insights because every contract is quite different from the other. But we would expect to get some relief, for sure.”
Sports networks have been without live games since mid-March, when the COVID-19 pandemic effectively shut down every professional sports league. As the drought continues, consumers have gotten increasingly frustrated in paying fees for games they can’t watch.
Comcast, which also owns sports networks, said earlier today that it is speaking with the various leagues about rate relief, and would pass any savings to distributors, who have in turn pledged to return that savings to customers. But the question of whether distributors and networks will get relief depends on the deals they have signed. Most U.S. sports rights deals hinge on a minimum number of games delivered, and so far that does't appear to have been breached.
In her letter -- which was sent to Altice USA, Comcast, Charter Communications, AT&T, RCN, Dish Network and Verizon -- Attorney General James requested that operators “promptly and voluntarily provide relief to affected New York consumers from high cable television charges,” adding that it is "simply inappropriate for New Yorkers to be burdened by high costs for services that cable providers are not able to deliver, and programming that is a mere vestige of what has been expected. Reducing those burdens is not only legally and practically appropriate, it is clearly the right thing to do."
But James is kind of barking up the wrong tree. Cable operators are charging their customers sports fees because they are still paying rights fees to networks. Most distributors have said they would pass any savings on to customers, but that would mean that the sports networks, which pay rights fees to the respective professional sports leagues, would have to receive relief too.
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