It’s Official: The Lakers Are Again on DirecTV

Los Angeles Lakers Kobe Bryant Dwight Howard - P 2012
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Los Angeles Lakers Kobe Bryant Dwight Howard - P 2012

It didn't want to pay the price demanded by Time Warner Cable for two cable sports networks, but in the end -- to maintain its reputation as the home of sports –- the satcaster joined the team.

DirecTV has made it official: It will be carrying Time Warner Cable's SportsNet and Deportes channels beginning almost immediately, much to the relief of its subscribers who are Los Angeles Lakers fans.

That includes the office of the L.A. Lakers, which has big screens all over the space tuned to DirecTV -- and more recently to Time Warner Cable.

After weeks of tough negotiations, even as some of their private and commercial customers looked at switching services to get the Laker games, the two sides came to an agreement. The terms have not been disclosed, but it is widely believed that Time Warner Cable got pretty much what it wanted: carriage on the most basic tier and $3.95 per sub per month in the Laker coverage area, which reaches about 1.3 million homes in Los Angeles, San Diego, Bakersfield and parts of Fresno as well as Santa Barbara and Ventura counties, Las Vegas and Hawaii.

"DirecTV is pleased that Los Angeles Lakers, L.A. Galaxy and Los Angeles Sparks games and programming will now be seen by so many people whose loyalty remains the life's blood to each team," said Dan York, DirecTV’s chief content officer. "We appreciate our customers’ patience and are happy to have arrived at an outcome that benefits everyone involved. We know that our customers will enjoy the great programming of these three franchises for many years to come.”

Time Warner Cable now has made a series of deals that fulfill the vision the New York-based multiple system operator laid out when it risked $3 billion on buying the Laker broadcast rights for the next 20 years. It later added the L.A. Galaxy and Sparks as well as sports-focused programming to fill out the year-round lineup.

Securing the Laker rights wasn’t just another deal. The move was a hedge against the rapid inflation of sports rights, especially for regional networks like the two it created (one in English, one in Spanish). TWC has said it doesn’t plan to do other programming.

It also meant that TWC had to go out and make deals with its arch competitors, the same services it competes with head-on for subscribers and advertisers day in and day out.

TWC played hardball in the negotiations. It business plan required the high sub fee but also demanded the basic tier so that it can sell advertising during games based on the highest possible audience reach in the Laker markets. TWC already had signed up competitors Cox, Charter, Verizon FiOS, AT&T, Bright House Networks and others.

With DirecTV in the fold, the only holdouts are Comcast, which has a relatively small footprint in the market, and Dish, which has made it clear that it won't pay a high price for regional sports networks that would have to be passed on to its customers.

This is part of a transformative strategic decision made by TWC in the past couple years. It was only in 2009 that Time Warner, the company that owns Warner Bros. and CNN, spun off its cable system operations because they were seen as capital intensive and slower growing than the cable networks.

The Oct. 1 launch of Time Warner Cable SportsNet and Deportes followed another major move in TV coverage of Southern California sports: the creation of Pac-12 Networks, which holds many of the most important rights to the college conference's games. While the DirecTV deal means the Lakers soon will be on satellite, the heated local rivalry between USC and UCLA still is mostly just available on Time Warner Cable. (Fox is airing Saturday's anticipated football matchup between the two nationally ranked teams.)

This year TWC also added the NFL Network and the companion RedZone channel after years of refusing to carry it for the same reason DirecTV cited in the Lakers talks: price. The NFL wanted a high price, and TWC didn’t want to pay it. The NFL Network beefed up its Thursday night package from eight to 16 games this season, and the two sides finally made a deal.

In a conference call with stock market analysts when TWC announced its third-quarter earnings last week, president and COO Rob Marcus said the company has “made major strides in making our sports offerings more compelling and more competitive.”