The agony of cable defeat

Citing poor business conditions, Rainbow Programming Holdings will fold its three-year-old SportsChannel Los Angeles at the end of the year.

Rainbow president and chief operating officer Sharon Patrick would not estimate the company’s losses on the regional sports network, but she described them as “substantial.”

She said that after analysis, Rainbow concluded that SportsChannel’s performance did not warrant further investment.

Soft economy cited

She cited the soft economy, the glut of sports programming on basic cable and the poor performance of the teams carried on SportsChannel.

Rumors that it might dissolve have been around for at least two years, but the announcement was a surprise to many cable industry operators.

Eight months ago, the web signed a pricy agreement to carry Clippers basketball for two to three years–an investment that many in the business saw as a statement of Rainbow’s commitment to the channel despite its problems (Daily Variety, March 17).

Escalating rights fees

Sources pointed to SportsChannel’s failure as another sign of the effects of escalating sports rights fees, which have battered the balance sheets of many media companies.

In an attempt to turn around, SportsChannel had been trying new approaches.

Patrick confirmed that as recently as a few weeks ago, Rainbow had been considering introducing Spanish-language sports programming to its mix as a way to tap into the region’s fast-growing Hispanic segment.

After consideration, service concluded that the number of new customers would not justify the expenditure for many years.

Last spring it tried to offer part of its programming as basic fare and part as premium; by doing this, SportsChannel could claim a subscriber universe of 700,000, allowing it to increase the rates it charges advertisers.

SportsChannel Los Angeles’ main franchises–the L.A. Dodgers, the California Angels, the Clippers and the Stanley Cup finals –continued as part of its premium package.

It also offered this season’s remaining Dodgers home games to basic subscribers on a pay-per-view basis. SportsChannel wouldn’t specify what the buy rates were. But Dodgers director of broadcasting and publications Brent Shyer said the PPV option did not attract many customers. The team’s last-place finish probably had a lot to do with that.

SportsChannel Los Angeles currently has 11 full-time and five part-time and temporary employees. It also regularly used 25 freelance announcers and production personnel.

It will start reducing its work force today.

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