Charter Communications is expected to shutter the Spanish-language regional sports channel Spectrum Deportes on August 15th. The company said in a statement, “while we never expected Lakers and Galaxy games to have equal viewership on Spectrum SportsNet and Spectrum Deportes, the [Spanish-language] network averaged less than a few thousand viewers per season since its launch (2012).” The company is expected to offer subscribers an alternative Spanish audio feed of live Lakers and Galaxy games and will replace the channel’s sports content with hyper-local all-news programming; Spectrum SportsNet will continue to operate unchanged.
Howie Long-Short: Charter, which brands its services as Spectrum, assumed control of SportsNet and SportsNet Deportes following its ’16 acquisition of Time Warner. The decision to cancel Deportes simply boils down to dollars and cents, the company was spending a lot of money to operate a network that had little viewership. While you can’t argue with that reasoning, the timing seems a bit odd; LeBron James’s arrival in Los Angeles has SportsNet commanding a 100% YoY increase ($14,000) on the cost of ad spots during Laker’s games. It’s reasonable to suspect Deportes would also have benefited from the James effect.
Charter Communications (CHTR) reported Q2 financials on Tuesday, reporting both YoY revenue (+5% to $10.9 billion) and earnings (+96% to $273 million) growth; despite the loss of 57,000 net pay-tv subs during the most recent quarter. CEO Tom Rutledge isn’t concerned though as he reiterated the company is a broadband provider at its core, simply using video to attract and retain customers. That philosophy helps to explain why the company has chosen not to pursue content related acquisitions despite “a lot of” advances. Shares rose +3.5% on the day, closing at $304.58, but remain down -9% YTD and -21% over the last 12 months. It’s worth mentioning that Liberty Broadband (LBRDA) is a large stakeholder in CHTR.
Fan Marino: One might think that the decision to fold-up Deportes would result in a mass exodus of Spanish-speaking fans from CHTR, but that’s likely not going to be the case. Spanish speaking fans tend to watch American sports (think: NFL, NBA, NHL) on U.S. outlets. In fact, SportsNet drew 12x the number of Spanish speaking Lakers fans that Deportes did during last season). While CHTR doesn’t need Deportes to reach fans of the Big 4 sports, it might to reach those who prefer soccer and boxing; bilingual Latinos have historically chosen to watch those sports in their native language.
Fun Fact: 2018-2019 will be the first season in 25 years the Lakers will not have a Spanish-speaking broadcast.
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