New York Says Cut Cable Fees Since There Are No Live Sports

(Bloomberg) -- New York’s top law enforcement officer demanded that the big cable and satellite television providers cut or eliminate fees tied to live sports programming during the coronavirus pandemic, saying customers are being forced to pay for access to events that don’t exist.

The companies, including AT&T Inc. and Verizon Communications Inc., should immediately propose plans to cut charges and provide financial relief to customers already strained by the crisis, New York Attorney General Letitia James said Wednesday in a statement.

“At a time when so many New Yorkers have lost their jobs and are struggling, it is grossly unfair that cable and satellite television providers would continue to charge fees for services they are not even providing,” James said.

Cable fees have become a flash point since most of the major sports postponed their seasons in mid-March. Fees paid to sports networks are a huge chunk of consumers’ monthly bills, with ESPN alone accounting for almost $8 out of a nationwide average of $85, according to Bloomberg Intelligence. In New York, fees for sports channels add up to more than $30.

Some companies, such as car insurers, have refunded money to customers.

The other companies that received letters from James are Charter Communications Inc., Dish Network Corp., Altice USA, Comcast Corp. and RCN Corp., according to the statement.

Shares of Altice and a batch of other cable and telecom industry stocks pared earlier gains after James’s calls for cuts.

“Verizon has been advocating for its customers and negotiating with programmers to create a customer-first solution to address the current environment,” spokesman David Weissmann said in an email. “We call on programmers and the sports leagues to cooperate with us to create a solution that provides relief to customers until live sports return to television.”

Altice, too, cited continuing payments to sports programmers, as did Charter, and said it has asked networks for relief for its customers.

Dish declined to comment on the attorney general’s letter. AT&T, Comcast and RCN didn’t respond to requests for comment.

Read More: Cable Stocks Dip on Prosecutor’s Call to Refund Live Sports Fees

Cable companies are contractually required to pay the networks for their channels, although the lack of live sports is weighing on them. Some, including Comcast and Charter, the nation’s largest and second-largest cable operators, have said they would refund any rebates they got from the networks to their customers.

The networks, in turn, have continued to pay the leagues their rights fees, for the most part, because the seasons haven’t been canceled. The leagues have been searching for ways to resume play, including shortened seasons without live audiences.

In the letter, sent Tuesday, James asked the companies to look for ways to provide “appropriate refunds, discounts and reductions of charges and fees, payment deferrals, and waiver of termination fees, at least until live sports programming is resumed.”

©2020 Bloomberg L.P.