Is DirecTV About to Fumble West-Coast Customers?


While not everyone plays or cares about sports, there is a major body of avid fans that spend a lot of their time in front of the TV watching games.  DirecTV (NASDAQ:DTV) may be missing out on an opportunity to air a number of sports broadcasts because of a disagreement with a western conference.

Cable and Satellite TV providers have a lot of different systems for offering content to their subscribers, often broken up into packages that they purchase as they please. There are the basic packages, which include common channels, and then there are more premium channels which can include more specific programs like sports.

In the case of DirecTV, some sports are separated into a premium category that customers have to pay more for if they want it. The programming would not be included in their basic package. However, the western conference, Pac-12, doesn’t want things to be that way with DirecTV, according to the Los Angeles Times.

The Pac-12 conference includes universities from all three West Coast states, as well as Arizona, Colorado, and Utah. As the name suggests, it includes twelve different schools from the six states, and of course includes a wide variety of sports, like football and baseball. The conference runs a sports service called Pac-12 Networks that broadcasts sporting events for the region.

The trouble between DirecTV and the Pac-12 arises because the conference doesn’t want DirecTV to put its sports broadcasts into a premium package. It does not want DirecTV’s customers to have to pay more in order to watch, as it would prefer to reach a broad audience.

A DirecTV spokesman commented on the matter, saying, “We can reach an agreement quickly if Pac-12 is willing to give customers a choice of whether they want to pay for it or not.” However, it does not look like that quick agreement will happen, and it could be to DirecTV’s detriment.

Time Warner Cable (NYSE:TWC) and Dish Network (NASDAQ:DISH) both carry the Pac-12 programming, and they may be able to use it to leverage customers away from DirecTV. In states and locations where the Pac-12 teams are particularly popular, it may be easy for Time Warner Cable and Dish to steal customers with the desirable sports programming.

By not coming to an agreement, DirecTV may have even incited Pac-12 to work against it. The Los Angeles Times reported that Pac-12 commission Larry Scott said it was clear DirecTV doesn’t “intent to take the network this year.” So, to customers and fans, he suggested that they “drop DirecTV and switch to one of the providers that carry [Pac-12 Networks].”

One thing sports fanhood requires is loyalty, and it may not be taken lightly by fans that Scott suggested they forget about DirecTV. It could turn out to be a winning turn of events for Dish and Time Warner Cable. In contrast, DirecTV may suffer a loss of customers on the West Coast.

Follow Mark on Twitter @WallStMarkSheet

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