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Tuesday, February 09, 2016

The Uncertain Timetable for Cord-Cutting in Baseball’s Future

The most recent discussions about a sports-rights bubble surfaced three years ago when the Los Angeles Dodgers signed their $8 billion television deal with Time Warner. While those in the industry had been hearing about a bubble for two decades and dismissed its existence, recent developments have provided ammunition for both sides. The Dodgers deal has proved to be a disaster up to this point, but teams like the Arizona Diamondbacks, Philadelphia Phillies, and St. Louis Cardinals have all signed billion-dollar deals of their own to broadcast games on cable locally. While cord-cutting might be “costing” ESPN billions in potential revenue, the company is still as profitable as ever due to higher pricing that make up for fewer subscribers. The concerns around ESPN deal with stagnant growth when it comes to profits, not with the actual profits, which are still enormous.

In discussing the fantastic television ratings for baseball a year ago, I wrote about the current dynamic between MLB and cable, and for the most part, this dynamic remains.

While cord-cutting is occurring across the country, it has not been widespread enough to cause a change of course in the current cable model. The recently discussed merger of Time Warner and Comcast that eventually fell apart would have actually further strengthened the current system. That cable companies also provide internet service, a much more necessary service than cable, only helps them keep subscribers. Change is inevitable, however, and better technology (including services provided by baseball’s own MLBAM) and internet service will eventually cause the current model to fall apart, as those with content will eventually be able to provide that content to their entire audience without the assistance of a cable provider.

 

RoyalsRetro (AG#1F) Posted: February 09, 2016 at 02:40 PM | 75 comment(s)
  Beats: cable, cord-cutting

 

 

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