May 29, 2012
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Speaking at the Cable Show convention last week, ESPN and Turner Broadcasting executives said they believe there is no stopping the escalating costs for sports television. ESPN is currently the most expensive cable network in terms of the fees cable TV and satellite TV distributors must pay, due to ESPN’s rights for NFL, Major League Baseball, NBA basketball, and several college sports leagues, including ESPN’s new $3.6 billion deal with the ACC running through 2026.
DVR technology, streaming television shows and movies from Netflix and sites like Hulu, and other means of consumption have made sports the last remaining appointment television, which makes sporting events valuable to advertisers and to cable TV providers and satellite television providers. Cable operators have seen fees for ESPN and TNT, which holds broadcast rights for NBA, NASCAR and NCAA basketball, continue to rise.
These rising costs put cable and satellite TV operators in a tough spot, as the fees they are charged to be able to air ESPN, TNT and other sports content continue to rise and those fees must be passed on to customers, but customers do not want to see prices for satellite or cable TV packages continue to increase, especially when there are more and more options out there for viewing many programs online or through streaming services.
Some cable operators have considered putting sports programming on its own subscription tier, but have faced resistance, as many households see sports channels like ESPN as the backbone of any cable or satellite TV package. Sports TV is necessary for keeping cable and satellite TV providers afloat, but it is also a huge cost drain. Hopefully, the networks and providers can come to an agreement to make everything work out and continue bringing the highest quality sports programming to the viewers who watch it.