Comcast is getting ready to issue credits to its video customers for regular season Major League Baseball games not played due to the ongoing pandemic, and according to people familiar with the company, subscribers will receive those benefits in the “coming weeks.”
Just how much Comcast customers would receive is not yet known. But according to the cable operator, once Comcast determines what it will receive from the RSNs for games not delivered, it will pass them along to customers.
“We have consistently said that we would pass along all credits or any other adjustments we receive from RSNs to our customers and will be offering adjustments to our customers based upon the MLB games that weren’t played in the second quarter because of the COVID-19 pandemic,” Comcast said in a statement.
Determining how much each customer will receive is a complicated process, depending on their market, the number of RSNs in that market and the teams that are part of the particular RSN. For example, a customer in an area with one RSN will likely get a smaller credit than one in a market with four RSNs.
Adding to the complications is that each RSNs has to determine how much of a credit they will give each operator, who in turn has to pass along that savings to the appropriate customer. That will take some time, but according to one person familiar with Comcast’s thinking, Comcast is estimating how much it will receive from the RSNs so it can issue credits sooner.
“It will be in the coming weeks,” said the person familiar with Comcast ‘s thinking about the credits. “They’re working through the whole process right now.”
The issue of giving rebates to video subscribers has been a big one ever since the pandemic postponed the seasons of the National Basketball Association, the National Hockey League and MLB back in March. At the time, the NBA and NHL had completed the majority of its seasons, and likely won’t have to give any money back for lost games to RSNs.
But baseball is another story.
Major League Baseball cut its 162-game regular season to 60 games because of the pandemic. And since the shortened season began on July 24, some of those games had to be canceled after teams revealed some players contracted COVID-19.
To help offset the high cost of sports programming, many operators have been charging all video customers a sports surcharge. During the pandemic, when most sports were canceled, customers have chafed at paying a surcharge for games they can’t watch. For Comcast, the sports surcharge averages about $8.75 per month, but depends on the market. Larger cities generally have more RSNs -- New York has four -- and therefore the sports fees in those areas would be higher.
Comcast also owns the NBC Sports Network RSNs, which would be issuing rebates to distributors.
According to a report in the Philadelphia Inquirer, NBC Sports Philadelphia said the amount of rebates due distributors would be determined after the number of regular season games each league played is finalized. Any credits or adjustments would be passed along according to individual agreements.
In April, New York State Attorney General Letitia James asked cable operators to look into returning at latest some of those fees to customers.
Other pay TV providers have said they would return some sports fees as they receive rebates from leagues or networks. In May, DirecTV said it would offer subscribers to its MLB Extra Innings and MLS Direct Kick credits for any payments the had made for the out-of-market sports packages and said they could cancel without penalty up to two weeks after play resumed.
Comcast said during its Q2 earnings conference call that it expects to receive rebates from RSNs, but that it hasn’t been determined what those amounts will be as of yet.
“...[W]e expect that we'll be getting some monies back from some of the sports leagues based on games played or not played in the U.S.,” Comcast chief financial officer Mike Cavanagh said on the Q2 earnings call on July 30. “And when that does happen, we as we've said, we'll pass that back along to customers.”
LHB Sports, Entertainment & Media president and CEO Lee Berke said the amount that the operators could receive from RSNs will vary depending on the teams involved, the markets and the number of games delivered. He added that while baseball could account for about 40% of a total RSN fee, the amount due to an operator could vary and it could be spread out over time..
“If you’ve lost 100 games, you’ve lost roughly 40% of what you were providing,”Berke said. “There are a variety of ways this could play out. It may be offered up in stages, it may be spread out over the course of several years, the term of the deal could be extended to ameliorate the hit. There may be something paid out immediately, but I think the overall financial hit may be spread out over a couple of years.”
While it could take time for any money to change hands, Comcast apparently is ready to offer its video customers credits even before it receives the rebates from the RSNs, based on estimates.
Other operators have said they expect to receive some form of compensation for lost games, but so far haven’t received anything.
“We continue to be in close contact with all the networks," Charter Communications said in a statement. "If and when we receive any COVID-related rebate for canceled sports, we will pass that along to our affected customers.”
On its Q2 conference call with analysts, Charter chief financial officer Christopher Winfrey said that the operator had not yet received any RSN rebates.
“We did not accrue any RSN fee savings in our programming expenses in the second quarter as the certainty, amount and timing of any credits is not yet clear,” Winfrey said. “If and when any COVID rebate for lost games occurs, we will pass that along to our video customers.”
At Cox Communications, spokesman Todd Smith said, “Right now, networks continue to charge us full price for this programming. If we receive any money back from the networks, we will pass all of it along to our customers.”
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