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Time Warner Cable Follows Dodgers Deal With Rate Increase

Time Warner Cable Inc. (TWC) is raising rates on Los Angeles subscribers to help pay for rising sports costs, including a new regional network focusing on the Dodgers.

Customers in the LA area will pay $72.50 a month, 8.2 percent more than last year, for basic cable. The average increase for video customers is 3.5 percent, Alex Dudley, a spokesman for New York-based Time Warner Cable, said today in an e-mail.

LA basic cable subscribers can’t opt out of receiving the Major League Baseball team’s network, which will start airing games in 2014. Time Warner Cable also debuted English and Spanish networks last year that feature the National Basketball Association’s Lakers.

The Los Angeles Dodgers ownership group created a new company, American Media Productions LLC, to begin a network that will be operated and distributed by Time Warner Cable, they announced yesterday. The 25-year deal is worth about $7 billion, according to two people familiar with the financial terms who asked not to be named because details are private.

The rate increases went into effect on Jan. 26. Pay-TV operators have seen programming costs rise by almost 10 percent from a year ago as fees from sports networks and other broadcasters jumped. DirecTV (DTV) and Verizon Communications Inc. (VZ)’s FiOS have said they will charge additional monthly fees to pay for the rising cost of regional sports networks. Time Warner Cable doesn’t have an additional sports fee.

Laker Fees

Time Warner Cable charges competing pay-TV operators $2.25 a month per subscriber for the right to distribute the two Lakers networks, according to research firm SNL Kagan.

Customers who also buy Internet or phone service from Time Warner Cable won’t see a price increase on their TV package, Dudley said. The $72.50-a-month rate doesn’t include any discounts the company may offer.

The Los Angeles Times reported earlier on the rate increase for LA customers.

Time Warner Cable, the No. 2 U.S. cable company after Comcast Corp., fell less than 1 percent to $100.35 at the close in New York.

To contact the reporter on this story: Alex Sherman in New York at asherman6@bloomberg.net

To contact the editor responsible for this story: Nick Turner at nturner7@bloomberg.net

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