Charter CEO Says Company Has ‘Very Little Control’ Over Live Sports Programming Fees
Earlier this week, New York Attorney General Letitia James sent letters to various cable and satellite companies urging them to cut fees attributed to live sports programming since they have been postponed due to the coronavirus outbreak.
In letters addressed to Altice USA, AT&T Inc., Charter Communications, Comcast Cable, DISH Network, RCN Corporation and Verizon Communications, James requested that the companies put forth plans indicating how they will provide financial relief to consumers until live sports programming picks up again.
According to Deadline, Charter CEO Tom Rutledge has responded and revealed that cutting those fees is not entirely up to the cable company. “We have a structure where its all bundled together and tied together contractually and we have very little control over it,” he said during the company’s Q1 earnings call. “We would love to see our customers be relieved if they can be. Ultimately it’s the athletes who are getting the money and … someone has to give up their money and give it back to the consumer and that has not happened yet.”
Cable and satellite customers pay up to $20 per month is additional fees for sporting packages. However, since the lockdowns, cable companies have continued to collect fees despite the fact that many games were canceled starting in March.
In her letters, James asked providers to find ways to “appropriate refunds, discounts and reductions of charges and fees, payment deferrals, and waiver of termination fees, at least until live sports programming is resumed.”
For Rutledge, however, the issue with pricing for cable bundles has been longstanding. He elaborated saying, “We’ve talked for years about the reality of programming costs and how sports drive the bulk of that. If you look at the average cost of programming of $60 a month [the wholesale cost Charter pays], if sports was not involved in the negotiations … that cost would be less than half of what it is. So sports is the major driver in the cost of content and obviously it makes the whole product difficult to sell because of the cost.”