New York state AG seeks sports TV fee relief for consumers

New York state attorney general Letitia James called on seven major US cable and satellite television companies to reduce the fees they are charging consumers that are attributable to live sports rights with virtually no events happening due to the Covid-19 pandemic.

In a letter sent to distributors Altice USA, AT&T Inc., Charter Communications, Comcast, Dish Network, RCN Corp., and Verizon, James called for immediate financial relief to New York consumers.

“It is simply inappropriate for New Yorkers to be burdened by high costs for services that the cable providers are not able to deliver, and programming that is a mere vestige of what has been expected,” James wrote. “Reducing those burdens is not only legally and practically appropriate, it is clearly the right thing to do.”

In New York, monthly fees for sports channels typically add up to more than $30. In addition to individual channel carriage fees themselves, many subscribers also pay monthly add-on regional sports network surcharges.

Many of those channels are relying on archival, documentary, and studio programming to fill the time that ordinarily would be covered by live games. While certain programming such as ESPN’s Chicago Bulls documentary The Last Dance has performed exceptionally well, many sports networks including ESPN have experienced sizable audience drops over the last six weeks.

James went further as to suggest that any sort of normal contractual provisions between cable distributors and sports programmers, calling for fees to be paid regardless of what games happen or not, are not entirely relevant in the current public health crisis.

“An entire category of key programming is no longer available, and applying those contractual provisions to this circumstance is leading to unexpected and unfair results for consumers,” James wrote.

The state attorney general does make any threat of penalty or punishment for non-compliance. Rather, James is requesting the development of plans to provide financial relief for subscribers, and that the plans “be guided by the principle that customers should not be charged for content they are not receiving.” Additionally, she said to the cable distributors “our office is willing to work with you on the terms for and implementation of action to ensure that both your company and the affected consumers are treated fairly.”

Some other industries, notably many US car insurers, have voluntarily reduced monthly charges due to activity and cost burdens in their businesses materially changing during the pandemic.

The response to date from the cable companies have largely followed that of the sports ticketing realm, which thus far has charged usual prices on the normal schedules and retained all of its revenue with unplayed games in most of the major US properties still classified as postponed as opposed to canceled.

“Once the NBA, NHL, and MLB announce the course of action for their seasons, including the number of games that will be played, Xfinity [subscribers] could receive rebates or price adjustments from the regional sports networks,” Comcast said in a customer service tweet soon after James’ letter was released.

Many of the cable distributors are also seeking to reduce the payments they make to the programmers, with an intent of passing savings on to consumers.

That wait-and-see stance, however, is already beginning to shift in other sectors of the sports industry. Major League Baseball earlier this week reclassified games not played due to the pandemic, and is now allowing teams to make refunds on ticket purchases, even as no rescheduling or resumption-of-play decisions have been made. Individual teams on April 29 began rolling out local-market ticket provisions.