Arbitration is Wrong Move to Resolve TimeWarner/Dodgers Impasse, Says Leading Crisis Management Expert and Lexicon Communications CEO, Steven Fink

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With 70 percent of the viewing public still unable to view Dodgers games on TV, it is time for the team to step up to the plate, says crisis management expert Steven Fink. Doing so will make the team heroes in the eyes of their fans.

Steven Fink, President, Lexicon Communications

"The Dodgers need to step up to the plate" to end the impasse, said Steven Fink, crisis management expert and president and CEO of Lexicon Communications.

Responding to a plea by “ten meddling members of Congress” to submit to binding arbitration to finally settle the impasse that has prevented 70 percent of Los Angeles Dodgers baseball fans from seeing the games on TV so far this season, Time Warner Cable has said “yes,” but DIRECTV has said “no,” according to widespread July 29 media stories in such publications as the Los Angeles Times and many others. (Lawmakers, FCC chairman urge arbitration over Dodgers channel).

And as the crisis rolls on, fans remain in the dark, literally and figuratively.

But according to crisis management expert and well-known author Steven Fink, writing on TheCrisisBlog July 30, it is the Dodgers who will pay the ultimate price if the team doesn’t intervene and settle the dispute. And Fink asserts team owners have it in their power, provided they disgorge some of the money TWC committed to them, and renegotiate the terms of the deal in good faith.

“If the Dodgers sit by and do nothing, they will soon be more reviled by their fans than the previous owner, Frank McCourt,” said Fink. “While the team did not directly cause this crisis, only the team can resolve it.”

Fink, labeling the politicians “ten meddling members of Congress,” warned that this was out of their political purview and was an attempt to interfere with free trade.

“This is still a free market,” stated Fink, president and CEO of Lexicon Communications, the nation's oldest crisis management firm. “TWC can charge whatever it wants, and buyers can decide whether or not they want to buy. Price is only part of the equation; even if a so-called ‘fair’ price is achieved, DIRECTV should still have the right to decide whether or not it wants to carry the games…. Forcing the two sides to sit down and arbitrate the matter sends the wrong signal and will have a chilling effect on other, similarly situated companies.”

This simply “is not an issue for Congress to decide,” Fink wrote. “But there is one entity that does have skin in the game and could – and should – broker a deal: The Dodgers need to step up to the plate.”

As Fink wrote on TheCrisisBlog July 30, he believes the team erred by accepting a far-too lucrative offer from TWC: $8.35 billion for the exclusive rights to broadcast Dodgers games for the next 25 years, as reported by Variety, July 30. Fink believes the Dodgers never considered the ripple effect consequences of such a rich deal. The only way for the deal to pencil out and not cost TWC its shirt is would be for TWC to sell the broadcast of the games to other pay-tv providers, such as DIRECTV, Dish Network, Comcast, AT&T, FIOS, and so on, according to numerous reports, including Deadline Hollywood . In a statement released today (July 30), DirectTV said, "Rather than force everyone to bail Time Warner Cable out, the simplest solution is to enable only those who want to pay to see the remaining Dodgers games to do so at the price Time Warner Cable wants to set" on an a la carte menu approach.

”The problem, as reported by Variety July 30 is that TWC insists on selling the rights on an all-or-nothing package deal, meaning it would charge DIRECTV a broadcast fee for every DIRECTV subscriber, whether or not they are baseball fans. DIRECTV said no. To agree would have forced the satellite company to increase monthly rates for every one of its subscribers, whether or not those subscribers want so see the games.

DirectTV countered,as reported in Variety July 30, in which only customers who are willing to pay a few dollars more each month to see the games would pay. But, TWC cannot recoup its long term cash outlay this way, so they rejected that counter proposal, and the two have been playing “hardball” ever since.

Fink says TWC needs a way out without losing its shirt. It clearly overpaid, expecting to make up the costs by forcing all other TV providers to take a package that they had to have known would not be palatable.

But, if the Dodgers give “back some of the money…it will solve the crisis. The only reason TWC wants to charge as much as it’s demanding is because its needs to pencil out a way to recover an $8 billion outlay. If the payout to the Dodgers is reduced and the terms are renegotiated (including the length of the contract), it would be a win-win for all.

“TWC would (presumably) offer terms more palatable to DIRECTV and others. DIRECTV could offer Dodgers games to its subscribers on an a la carte basis (much as it does with Big Ten football). TWC would make money – maybe not as much as it had originally hoped, but more than it would make if it goes bankrupt living with an $8 billion albatross around their necks. The Dodgers will still make money, although less than $8 billion. And the Dodgers fans would be able to see the games,” Fink observed.

While TWC and the Dodgers would ultimately be putting a little less money into their respective pockets this way, Fink said, the “Dodgers have a rare opportunity to take a home run trot in front all Dodgers fans. As long as greed is reined in, the crisis can end and the Dodgers – not TWC, not DIRECTV, not meddling Congressmen, not the FCC – will be actual heroes with their fans.”

But time is running out. The second half of the season has just begun. The Dodgers are in two tight races – one for the National League pennant, and the others for the hearts of their fans.

Lexicon Communications Corp. is the nation’s oldest crisis management and crisis communications firm, headquartered in Los Angeles. Its president, Seven Fink, one of the nation’s leading crisis management experts, is the author of Crisis Management: Planning for the Inevitable, the first book ever written on the subject, as well as the recently published, Crisis Communications: The Definitive Guide to Managing the Message.

For more information, contact: Steven Fink, 626-683-9333 or 626-253-1519. sfink(at)lexiconcorp(dot)com

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Steven Fink
Lexicon Communications
since: 11/2012
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