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Rutledge: Sports Cost Relief is Up to Networks, Leagues

Charter Communications chairman and CEO Tom Rutledge said he would like to get some rate relief when it comes to sports channels that aren’t showing sports during the COVID-19 pandemic, but said the matter is out of the distributors' hands and will depend heavily on when games return.

Rutledge’s response was similar to that of some of the other major cable distributors -- Comcast and Altice USA have said pretty much the same over the past two days. New York State Attorney General Letitia James sent letters to the biggest pay TV operators in her state on April 29 asking them to voluntarily reduce charges to customers during the pandemic, but that would depend on whether the channels themselves get a break from the respective leagues. 

The National Basketball Association and National Hockey Leagues suspended their regular seasons in March, and Major League Baseball postponed its season later that same month due to concerns over the pandemic. While several scenarios have been put forth about a return to play for those leagues in the coming months, nothing has been decided yet.

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Some major sporting events are beginning to return -- NASCAR said it will restart the auto racing circuit on May 17 -- and The Kentucky Derby and French Open have been postponed until September. The Derby is holding The Triple Crown showdown, a social distancing, computer-simulated event on May 2 pitting the 13 horses that have won the Triple Crown against each other to raise money for COVID-19 relief. The showdown will be aired on NBC Sports. 

On a conference call with analysts to discuss its Q1 results, Rutledge estimated that sports costs make up more than half of the $60 per customer, per month that Charter doles out in programming fees. He added any relief from sports costs would be welcome and would be passed directly to consumers, but didn’t seem too optimistic that he would get it.

“Sports is a major driver of the cost of content, and obviously it makes the whole product difficult to sell because of the cost consumers have to pay,” Rutledge said, adding that Charter would love to pass through any savings it received from the networks if games aren’t played.

“There is still a big question of whether the games will be played, and if they are played, most likely the cost will not be rebated to the customer,” Rutledge added. “At this point in time we have a structure in the industry of how we pay for content. It's all bundled together and tied together contractually, and we have very little control over it directly. We’d love to see our customers relieved, if they can be. Ultimately, it’s the athletes who are getting the money. At some point somebody has to give up their money to give it back to the customer. That hasn’t happened yet.”