The T.V. Bill is Too High
Walt Disney Company officials along with a number of top executives at other places that have sports networks probably are not too thrilled with a decision by DISH Network to change DISH’s offerings to subscribers in an effort to make packages more financially attractive. The people who are running DISH have decided ESPN and other sports networks should no longer be placed in a general tier and have bundled ESPN, ESPN2, FS1 into a tier called the National Action Pack along with the Game Show Network and others that will cost subscribers an additional $10 a month if they decide to add it to what DISH executives are calling a Flex Pack. If subscribers want even more sports, there will be another costing $10 a month package that features in market regional sports networks. This is not an a la carte selection. DISH is not actually giving subscribers the right to pick and choose what channels they really want.
Nonetheless, sports executives and TV bosses may find out an awful truth. There are fewer people than they think that are willing to pay for sports outside of the basic package. Sports salaries and franchise values have soared over the past 32 years because of the 1984 Cable TV Act which created various tiers for customers who wanted more TV. The basic expanded tier where all customers took everything whether they wanted everything or not is where sports ended up. And that tier was very good to ESPN and sports owners. They got billions in revenues from everyone even though it is just a small percentage who actually watch sports. But people are cutting the cord to cable and shutting off the satellite and companies like DISH want to keep customers. DISH figures a different pricing structure will do that but Disney and FOX are going to fight it. There is a whole lot of money at stake.
By Evan Weiner for The Politics of Sports Business.
This article was republished with permission from the original publisher, Evan Weiner.