Cox, the Hornets, and the local sports TV wars

Fox may be losing its regional sports dominion to Comcast and Time Warner Cable, but that doesn’t mean it’s shrinking elsewhere, and for that it has Cox to thank. Fox was able to set up an FSN network in San Diego largely because then-rightsholders Cox pulled out of the bidding for Padres rights, and history appears to have repeated itself in New Orleans, where Cox, whose regional sports networks have had trouble getting carriage on non-Cox systems, has decided the best way to save itself from rising sports rights fees isn’t to join the party, but to do the opposite, give Fox a monopoly and hope that means Fox can shortchange the team on rights fees and pass the savings on to Cox.

My impression is that Cox can only do this because ESPN and CBS aren’t in the regional sports network business. (NBC is, but their RSNs are tied to Comcast’s cable business.) If there were multiple RSN groups that weren’t tied to cable operators, Fox wouldn’t be able to set the price for local sports rights, and Cox wouldn’t have any other options. If Root Sports were at all interested in expanding outside the three regional sports networks it already has, Fox wouldn’t be able to escape competition anywhere. That they are not could have a number of causes, from DirecTV not wanting to go head-to-head with the organization that spawned it to only holding those three regional sports networks until they can spin them off to someone else like Comcast. But Cox could find itself inside a nightmare if ESPN or CBS decided to take a piece of Fox’s RSN pie.

Comcast SportsNet has become a money-making machine, but I can’t help but wonder whether Time Warner Cable might find itself going the same route as Cox. If its new Southern California networks have trouble getting carriage on non-TWC carriers, they may decide they were better off on the other end of those carriage disputes. On the other hand, the Lakers are a far bigger deal than the Padres or Hornets, and other RSNs for big-name teams like YES managed to survive early carriage disputes, so Cox’s struggles might have more to do with the teams involved than anything else. Certainly Fox isn’t likely to be able to count on other cable operators having Cox’s generosity anytime soon.

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