Verizon this week has begun alerting subscribers to its Fios TV service that it will begin issuing refunds to customers who’d found themselves shortchanged on live sporting events during the early days of the coronavirus pandemic.
The telco on Tuesday fired off an automated email informing its Fios subscribers that it would pass on a billing credit to compensate for the lack of NBA, MLB and NHL action during the spring. In the body of the email, Verizon noted that it is “receiving refunds from several Regional Sports Networks for providing a reduced number of live sporting events due to COVID-19” and that the itemized make-good would be listed on December’s statement under the heading “RSN Credit.”
While Verizon did not specify which RSNs had ponied up for the credits, among the sports nets that are available in its New York/New Jersey footprint are YES Network and MSG. Fios customers in the Tri-State area went without Yankees, Nets, Knicks and Rangers action for the better part of three months as the coronavirus shut down the U.S. sports industry.
Given the elevated carriage fees the RSNs charge operators, the credit is likely to be palpable, if not exactly life-changing. Per Kagan estimates, YES commands a princely affiliate fee of $6.49 per sub per month, making it the second priciest cable channel behind ESPN. MSG fetches $4.65 per head.
Verizon said it anticipated additional refunds may be in the offing next year. Should that prove to be the case, the carrier will issue a second round of Fios credits.
The telco’s rebate effort comes on the heels of a similar initiative by Comcast. The nation’s largest cable operator this summer announced it would issue credits to its Xfinity subscribers who paid for sports-free RSN service earlier in the year. Comcast’s good-faith gesture was somewhat complicated by the fact that the company owns seven NBC Sports-branded RSNs in high-end markets like Boston, Philadelphia, Chicago and Washington, D.C., while also holding a minority interest in the New York Mets’ SNY.
Comcast’s RSN adjustments contributed to a 15% decline in distribution revenue at its NBCUniversal cable networks unit. The lack of live sports in the period also was cited as a primary factor in the division’s 27% drop in quarterly ad sales revenue.
In October, Comcast reported that RSN rebates had no material impact on its third quarter EBITDA, before adding that it did not anticipate additional adjustments going forward.
That same month, the over-the-top service Hulu got around the RSN rebate issue by dropping the Fox-branded sports nets from its live TV package altogether.
