The "spiraling cost" of sports programming in the USA?

[klr]

My use of quotes (and a question mark) in the thread title indicates that I don't quite believe that, at least in the context of the USA, which is what the statement refers to:

http://paidcontent.org/2012/04/06/by-th ... ogramming/ (April 2012)

The spiraling cost of sports programming

Media analysts are increasingly talking about the skyrocketing cost of sports television — and, more importantly, the potential for that trend to undermine the pay TV model and spur a new round of cord cutting.

So just how high are those costs?



A new report from Bernstein Research senior analyst Craig Moffett notes that carriage fees for Disney’s ESPN and ESPN 2 alone account for 20 percent of the cost of a typical wholesale-priced cable subscription. The flagship channel collects, on average, $4.69 per subscriber, according to SNL Kagan (see chart provided by Bernstein Research).

Live sports programming accounts for about 20 percent of programming hours consumed in the U.S., Bernstein says. But national networks like ESPN and regional sports channels account for about 50 percent of the cost of the average cable, satellite or telco TV service bill.

“The ridiculous escalation in sports rights is getting to be an old story,” Bernstein writes. “But lately it has gone to unimagined proportions. Unchecked, it threatens to blow the entire media model apart.”

Both carriers and the consumers they serve aren’t likely to get a break soon, Bernstein adds, citing the example of Major League Baseball’s Los Angeles Dodgers. The team was sold last week to private equity for a whopping $2.15 billion sale price driven by anticipated regional sports-channel renewal fees.

Also noted is the re-transmission dispute between satellite carrier DirecTV and broadcast-station operator Tribune that was settled earlier this week. Tribune enjoyed added leverage, Bernstein says, with opening day of the Major League Baseball season unfurling on a number of its channels, and DirecTV facing the backlash of rabid local fans should games be blacked out.

Help is not coming from the courts: A three-judge panel for the 9th Circuit Court of Appeals, Bernstein notes, just upheld a lower court ruling that found content companies like Disney are not showing “demonstrated injury to competition” when they bundle channels like ABC and ESPN in indivisible packages to carriers.

Oh, and that Bloomberg report about News Corp. launching a national sports cable channel to compete with ESPN? Don’t look for competition to drive down cost, either. Even without a direct national cable sports competitor, ESPN paid the National Football League $15.2 billion to keep carrying Monday Night Football through 2021.

“One more bidder for national sports rights would simply drive rates higher,” Bernstein concludes. “And that would, in turn, drive end user prices up, not down.”

Now, even allowing for the fact that the quoted costs may not represent the final price to the customer, I am still bemused (and then some) to see these prices categorized as costly. Over here in Ireland and the UK, these would be regarded as exceptionally low.

[Coito ergo sum]

Well, if your costs are higher, then that would be worse. Lower costs for things are better, all else being equal. However, I think the idea was that they were "spiraling" which would mean going up fast. That would relative, and even if the costs are lower in the US, they could still be spiraling up.

But, the long and short of it is that cable television is getting pretty expensive. I pay about $85 per months, I think, for my digital cable services.

[Robert_S]

Insert condescending remark about sports fans here.

[Sean Hayden]

Yeah, I already don't pay for cable and just use the Internet for the shows I want to watch. I remember when I had cable and sat though that there were too many sports channels.

[Clinton Huxley]

I've got Sky but may bin it once the Test matches are finished. Hopefully the Ashes will go back to being a protected event and be back on the Beeb before im too much older

[mistermack]

I've never been tempted to pay for sports. I'll watch stuff if it's free, but mostly just for a a noise in the background.

I like tennis, and might possibly watch an important international football match. But none of it would break my heart, if it wasn't available.
Moto GP is good, and I actually quite like the Tour de France. Not so much for the bikes, but the scenery and the loony spectators. They must empty the mental hospitals in France, the week of the tour.

But if it wasn't there for free, I wouldn't be tempted to subscribe.

[Collector1337]

Sports can be good as it is important to stay physically active for your health.

However, it's also a great way to distract the masses from what is actually important.

[MrJonno]

Sports can be good as it is important to stay physically active for your health.

However, it's also a great way to distract the masses from what is actually important.

Like?,

I can't stand sports myself but I do understand it is the most important thing in many people's lives

[laklak]

If sport is the most important thing in someone's life then they don't have much of a fucking life.

Fooball! Fooball! Fooball! Humungous mespmorphs smashing each other senseless in order to move an oblate spheroid down a field. Woo hoo, what fun. Or basketball, what a stupid waste of time that is, almost as stupid as soccer. I'd far rather watch boxing, at least it isn't a metaphor for combat. I'd actually prefer to-the-death gladiatorial contests, with swords and tridents and nets, you'd get very few purposefully thrown bouts.

[klr]

Well, if your costs are higher, then that would be worse. Lower costs for things are better, all else being equal. However, I think the idea was that they were "spiraling" which would mean going up fast. That would relative, and even if the costs are lower in the US, they could still be spiraling up.

But, the long and short of it is that cable television is getting pretty expensive. I pay about $85 per months, I think, for my digital cable services.

They are indeed high, and getting higher. Much of it depends on the sport. If I really want to watch (say) cricket or golf then I have no choice: I have to subscribe to Sky Sports, which would set me back about 34 Euro a month (c. 45 US dollars) - and that is on top of what I'm already paying. Of course, there is much more on Sky Sports, some of which I would be interested in, and some not. But the point is it's hugely expensive, and I can pick and choose.

I am thinking about subscribing to the only other sports package available, which costs about half what Sky costs, and I'll get a couple of months free.

I take your point about "spirallin"g being a relative term though, and I had that in mind when I posted the OP. If people think that cable subscription costs in the US are now very high, they should be prepared for them getting much, much higher.

Also, your total subscription costs are quite high, although mine might be going that way. I'm not yet subscribing to broadband cable though.

My own take on this is that competition has turned out to be very good for the rights owners (and the cable/satellite companies), but the consumer is just paying more and more as time goes on.

[klr]

Sports can be good as it is important to stay physically active for your health.

However, it's also a great way to distract the masses from what is actually important.

Like?,

I can't stand sports myself but I do understand it is the most important thing in many people's lives

There is a perception in the UK and Ireland (true or not) that a disproportionate number of Sky Sports subscribers are from "lower class" areas. Why? Because Sky Sports has had a near-monopoly for 20 years on live coverage of English Premiership soccer. It has probably been the making of not only Sky Sports, but all of BSkyB.

Of course, it's hard to characterize soccer as being the "game of the masses" anymore, given the salaries that many top (and even middle-ranking) players earn nowadays. For all the increases in ticket prices, it's TV revenue that has been the main factor.

[klr]

I've got Sky but may bin it once the Test matches are finished. Hopefully the Ashes will go back to being a protected event and be back on the Beeb before im too much older

Not before 2017 at the earliest, if I read the news correctly.

For "minority" sports - which in England would be pretty much anything other than soccer - there is a huge problem as I see it in selling your broadcast right to a subscription sports channel. You might get the money now, but ten or twenty years from now, you'll find that the proportion of the population who want to participate in or watch your sport has shrunk.

[Collector1337]

Sports can be good as it is important to stay physically active for your health.

However, it's also a great way to distract the masses from what is actually important.

Like?,

I can't stand sports myself but I do understand it is the most important thing in many people's lives

Like stopping you and everyone like you, from disarming the entire populace.

[klr]

Sports can be good as it is important to stay physically active for your health.

However, it's also a great way to distract the masses from what is actually important.

Like?,

I can't stand sports myself but I do understand it is the most important thing in many people's lives

Like stopping you and everyone like you, from disarming the entire populace.

Take that derail elsewhere FFS. It's of absolutely no relevance to this topic.

[Collector1337]

Sports can be good as it is important to stay physically active for your health.

However, it's also a great way to distract the masses from what is actually important.

Like?,

I can't stand sports myself but I do understand it is the most important thing in many people's lives

Like stopping you and everyone like you, from disarming the entire populace.

Take that derail elsewhere FFS. It's of absolutely no relevance to this topic.

He asked. So, not really.