DirecTV’s New Charge: Good for Investors, Bad for Customers
The increasing cost of sports broadcasting rights has claimed another victim. Following in the footsteps of other television providers, DirecTV (NASDAQ:DTV) has imposed a surcharge for new subscribers who want access to regional sports channels in certain major markets.
DirecTV will impose the charge on new customers in areas where there are multiple regional sports channels, such as Los Angeles, which has four. Customers will be forced to pay an extra $3 per month on non-basic packages for access to those channels. Only about 20 percent of markets in the United States fall into this category.
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The surcharge “only covers a small portion of the cost DirecTV is paying sports programmers to carry” the regional networks, said a DirecTV spokesman, according to the the Los Angeles Times.
The company is trying to compensate for the sky-rocketing cost of obtaining the rights to broadcast the games, falling in line with a $4 monthly charge levied by Time Warner Cable (NYSE:TWC), and as much as $5 per month charged by other national providers.
Regional Sports are Getting a lot of Love
A number of companies have launched regional sports initiatives recently. Toward the end of November, News Corp. (NASDAQ:NWS)(NASDAQ:NWSA) announced that it would acquire a 49 percent stake in the Yankee Entertainment and Sports Network, which is anchored by broadcasts of Yankees and Brooklyn Nets games…