Television Contracts Newsbeat
Saturday, January 26, 2013
The eye-popping price tags have restarted debate about a topic near and dear to sports fans, fairness: many TV customers never watch the mightily expensive channels at all, yet almost all must pay. There was a shudder in the industry when John Malone, the business tycoon who helped create the modern-day cable system, said in November that “runaway sports rights” costs amounted to “a high tax on a lot of households that don’t have a lot of interest in sports.” The only short-term fix, he said, was government intervention.
The price increases reflect the leverage big sports leagues have as distributors like Time Warner Cable and programmers like ESPN desperately try to hang onto live programming in the age of the digital video recorder and the Internet.Sports are the television industry’s bulwark against rapid technological change: while the companies fear cord-cutting by customers who can cobble together a diet of TV on the Internet, they rest a little easier knowing that former customers would be hard-pressed to find their favorite teams live online.
Pretty much everybody in the business agrees that the overall costs are outrageous. Nobody has an easy solution.
The latest example of this is likely to come on Monday when the Dodgers’ owners are expected to announce a 20- to 25-year deal to create a regional sports network with Time Warner Cable. The cost per subscriber in Southern California is likely to be between $4 and $5 a month, though Time Warner Cable will swallow some of the amount itself.
In assessing the impending Dodgers deal, Michael Nathanson, a media analyst at Nomura Securities, wondered earlier this week “if we have reached the top of the sports rights bubble.”
Posted: January 26, 2013 at 05:22 PM | 0 comment(s)
Tuesday, November 27, 2012
Last and very much least, the local TV have-nots. The Royals, Pirates, Brewers and Cardinals are located in small media markets. Even the Cardinals’ traditionally strong ratings just cannot command the kind of local TV revenue that bigger market teams enjoy. The A’s, of course, play in the San Francisco Bay Area, a big media market, but their consistently low TV ratings have kept the A’s from the kind of money the rival Giants enjoy.
The Braves — well, the Braves are a victim of bad deals and bad timing. Liberty Media bought the Braves from Turner Broadcasting in 2007 and inherited 25-year local TV contracts negotiated by Turner at below-market rates. We weren’t able to track down the Braves yearly rights fees but we do know that the contracts significantly hamper the Braves’ payroll decisions.
Maybe the Braves could afford better free agents if “Beast Master II” were getting better ratings on TBS?
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