Cox Communications President and CEO James Robbins had some tough talk for programmers last week. An outspoken critic of rising programming fees, said the "entire food chain" of sports is broken and needs to be fixed.
"There are only two people making money in the sports business," he said, "ESPN and the players." Given escalating costs, putting pricey channels on à la carte tiers or dropping some altogether are both options, he told a Cable Television Public Affairs Association (CTPAA) forum crowd in D.C. last week.
Robbins said consumers, "at least in the eyes of some people in Washington, are getting hosed by rate adjustments, adjustments coming about because some programmers choose to push very high rates and increases through to cable operators." He also said operators were partly to blame for having agreed to those contracts.
The industry needs to solve the problem internally, he opined, rather than create the sort of situation that happened in New York between YES and Cablevision, where "the government had to intervene and glued together some compromise that blew up last week {and was eventually patched back together again]. This is not going to help our industry."
Responding to questions from Court TV's Catherine Crier at the CTPAA opening session, Robbins said the idea of putting "very high-priced" services on an à la carte tier as one solution to the rate-increase problem "makes some sense," although he did not see tiering as a general solution to rate complaints.
An ESPN spokeswoman responded: "Cox has a very healthy business by any measure, and sports is a major driver of it, such that Cox is expanding its own sports cable interests. Operators select ESPN number one in value, importance to systems, local ad sales, and driving new businesses [broadband, high-speed modems, and interactive TV]. À la carte would reduce that value, and consumers would pay more for less. It's not a successful formula for anyone in this business.
One of the Washington types whose ire has been raised by cable-rate issues is Senate Commerce Committee Chairman John McCain (R-Ariz.). The GAO is reviewing cable rates and packaging at McCain's request.
