If you missed the regular Opening Day from Major League Baseball due to the coronavirus pandemic, well, someone feels your pain.
Comcast Corp. intends to refund the programming fees its subscribers paid for regional sports networks in the second quarter, the Philadelphia cable giant said Wednesday. The rebates are likely to show up as credits on future bills, not dollars in someone’s wallet.
“We have consistently said that we would pass along all credits or any other adjustments we receive from regional sports networks to our customers, and will be offering adjustments to our customers based upon the Major League Baseball games that weren’t played in the second quarter because of the COVID-19 pandemic,” the company said. The amount of money involved will likely hinge on a subscriber’s individual market, and how many regional sports outlets are included in their plan.
Comcast’s maneuver may place pressure on some of its rivals to reciprocate. In May, Letitia James, New York State’s Attorney General, sent a dispatch to the companies that extract programming fees from sports-TV fans: Altice, AT&T, Charter Communications, Comcast, Dish Network and Verizon. “At a time when so many New Yorkers have lost their jobs and are struggling,” she wrote, “it is grossly unfair that cable and satellite television providers would continue to charge fees for services they are not even providing.”
A 2019 report from Kagan, a market-research firm that is part of S&P Global Market Intelligence, estimated that sports programming brought in $18.55 per cable or satellite subscriber per month in fees – 22.1% of average revenue per user. That figure has surged since 2009, when sports programming captured 14.1%, according to Kagan. Those figures likely include national sports programmers like ESPN and Fox Sports 1, which are not involved in Comcast’s decision.
Contracts with regional sports networks often hinge on the number of live sporting events they show over a defined period of time. The majority of baseball games are broadcast in regional fashion, not on a national outlet like ESPN or Fox Broadcasting, and are the foundation of a market for RSNs. Comcast owns several regional sports outlets as do Sinclair Broadcasting, which purchased the former Fox RSNs from Walt Disney, and AT&T.
In the recent past, Comcast deferred any decision on sports-fee givebacks to the leagues. “The leagues have to decide are they going to be playing, what happens to the future if they’re just starting a season or the current one that got disrupted,” said Brian Roberts, chairman and CEO of Comcast, during an investor call in the Spring. “If we are able to get clarification, then we can give that to our customers.”
But Comcast was already offering some relief overseas. Comcast allowed subscribers to its Sky Sports – sold separately from other programming options – take a pause in the billing cycle, in the belief that doing so would prevent wholesale cancellations and allow the company to keep subscribers on board.
Comcast’s decision could open the cable and satellite sector up to new scrutiny. Major League Baseball continues to grapple with the coronavirus, postponing games by the Florida Marlins and Philadelphia Phillies (whose games are often broadcast by Comcast-owned NBC Sports Philadelphia). If individual teams are sidelined, does that mean viewers in their home markets shouldn’t have to pay a portion of their sports programming fees? As more leagues and teams try to resume play, Comcast’s giveback plan could keep media and sports executives on their toes.