Sports rights fees are way too high on cable TV
The Major League Baseball season is beginning and there are some ominous clouds that could impact not only two Major League Baseball teams that are involved in on going disputes between their cable TV distributor and multiple system operators but the entire industry. Before getting to the Los Angeles Dodgers and New York Yankees TV problems, there is a report that has to worrying people running the NFL, NHL, NBA, NCAA and of course Major League Baseball.
It appears less people are buying sports packages on cable TV as people are cutting the cord to cable. ESPN has acknowledged that they are down six million subscribers on American cable TV and now comes word that NBC Sports has lost slightly more than 1.5 million subscribers and another Comcast property, the Golf Channel has 3.4 million fewer subscribers. Disney’s ESPNU has about one million less subscribers and Major League Baseball’s cable TV network has been dropped by 800,000 subscribers. All of that means is tens of millions of dollars in lost revenue for multiple system operators and perhaps their sports partners. Cable TV revenues have been a major reason for team values to increase more than 10 fold over the past two decades. There is no official reason for the fall in subscribers but multiple system operators have offered different cable TV packages that drop sports channels and other TV fare. Young viewers might be getting sports through phone packages. But sports owners will have a problem with the current downward trend and that trend might have started with Time Warner Cable and the Dodger cable TV deal. For more than two years cable operators have said no to the price of Dodgers games and that continues. Few get Dodgers games in the market. Meanwhile the Yankees cable TV channel and Comcast are fighting over costs and the YES Network has been dropped by Comcast. Rising costs is cable’s problem.
Republished with permission Evan Weiner for The Politics of Sports Business.