Inside sports business
Seahawks fans are learning firsthand about the new dog-eat-dog realities of the television world.
A dispute between Dish Network and the Chicago-based parent company of Q-13 Fox (and sister-station JOEtv) over carriage fees has resulted in the first two Seahawks exhibition games not airing for Seattle-area subscribers to the satellite provider. Such carriage disputes have been big news for a while in the sports world, the prime example being most of Los Angeles not being able to watch Dodgers games broadcast on the team’s regional sports network the past few seasons.
Here in Seattle, the major sports impact from such disputes before now had been no Pac-12 Network carriage by DirecTV. That resulted in DirecTV viewers missing some Huskies football games, though the bigger contests are usually shown nationally by ESPN.
This Seahawks thing is different.
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All Seahawks exhibition games and nine of 16 regular-season contests are on Q-13 only in this market. Considering how woven into the city’s fabric the Seahawks are, missing any more games would be a big deal.
“I think this is something that could go on for a while,’’ said Gary Weitman, senior vice-president (corporate relations) for Chicago-based Tribune Media, which owns Q-13 and 41 other stations nationwide. “I’m not real optimistic that we’ll be able to reach a deal before the start of the NFL season.’’
This isn’t just a Seahawks problem. Tribune’s stations carry games in 20 NFL markets — seven involving primary home team carriers like Q-13. Dish subscribers are missing Green Bay Packers games in Milwaukee and Colts contests in Indianapolis.
After their previous contract expired in June, Dish imposed a “blackout” on Tribune channels. Talks had broken down over Tribune seeking a more lucrative financial package that involves bundling its WGN America (WGNA) network in with all programming.
That means Dish subscribers wanting local stations like Q-13 would automatically pay for WGNA as well.
WGNA has undergone a programming revolution into a cable network the past two years after long operating as a “superstation” airing Chicago sports and reruns of syndicated hits such as NCIS. Since 2014, the network has created several original-program dramas, including a pair of bona fide ratings and critically acclaimed hits in Outsiders and Underground.
At its quarterly earnings call with analysts this month, Tribune CEO Peter Liguori said the impact of the Dish dispute has been “negligible” and that strong ratings, advertising growth and increased revenues for WGNA had bolstered the company. Coupled with an expanded network of stations nationwide, Tribune feels a carriage fee hike is justified.
“The last deal that Dish did with us was in June 2013,” Tribune vice-president Weitman says. “We were a very different company then than the one we are today.”
But like all cable and satellite providers, Colorado-based Dish is hearing that many of its 13.8 million customers won’t accept further hikes to monthly bills. The company lost a record 281,000 subscribers in the second quarter of this year — and not strictly because of the Tribune dispute.
If Dish pays Tribune more, higher bills will inevitably get passed on to viewers already threatening to “cut the cord” and switch to streaming options such as Hulu and Netflix.
“They’ve more than doubled their rates, which isn’t real business,’’ Dish executive vice-president (programming) Warren Schlichting told me. “I don’t know another business in the country that can ask for a 100-percent increase. And they’re forcing us to take WGNA, a cable network we’d rather not take. That adds to the pile of money that we have to push over to them.’’
Both sides regret Seahawks fans are getting caught in the middle.
Schlichting says Dish has already spent $7 million giving away over-the-air antennas in numbers “well into the six figures” so NFL fans and others can view Tribune stations for free. Weitman says Tribune is encouraging Seahawks fans worried about future games to switch to a new provider, like DirecTV, which has offered some Dish customers here enticements like free NFL Sunday Ticket packages if they move.
The war of words between the sides has grown nasty as antsy football fans up the pressure.
Dish issued a news release last Thursday accusing Tribune of abandoning negotiations the past five weeks. Tribune issued its own release vehemently denying it.
Weitman told me Dish is the only major provider nationally Tribune has yet to strike a deal with. Schlichting countered that Dish recently reached deals with far bigger programming companies than Tribune.
Tribune notes Dish employed similar “blackouts” during disputes with Time Warner in 2014 and 21st Century Fox last year, accusing the provider of holding viewers hostage as a negotiating tactic. Dish counters that if it keeps Tribune stations on-air, it loses all negotiating leverage.
And on it goes.
There’s a price for our new TV universe; a downside to “cord cutting” boasts by mainly “Millennials” and even younger viewers now streaming all shows.
Sure, they pay less than cable and satellite viewers, but everybody else is subsidizing it.
Viewers switching from TV screens to streaming via smartphones and laptops have made advertising revenue less dependable. The big money from owning a network — be it Tribune or the Mariners-owned ROOT Sports NW — is now via these carriage deals.
Meaning negotiating stakes are higher. And every negotiation risks devolving into what one local TV sports executive recently described to me as “a knife fight.’’
Dish executive Schlichting agrees with that take.
“It’s only going to get worse,’’ he says.
For Seahawks fans, the worsening will come in September once these missed games start to count for something.