If you’ve been paying attention to the latest round of sports broadcasting deals, you may be wondering, “Why are these fees so high?” and “How much of this is gonna be passed on to me?”.
There’s no question that rights fees for sports are setting new records. $ 12.4 million for Major League Baseball between Fox, ESPN, and TBS; $2 billion for the NHL by NBC; $3 billion for the NFL by CBS, Fox, and NBC; the same amount by Time Warner Cable to wrest the Lakers away from Fox; and now the latest, a whopping $8 billion from TWC to help the Dodgers launch their own channel, again at the expense of Fox. Why are all these broadcasters pouring all this cash into sports?
After all, there are plenty of other types of programming, and much of it is cheaper. Like reality TV. Or contests like Idol and “Dancing with the Stars”. And don’t forget, many people don’t like sports. You may know someone like this or even live with them. And some folks like one sport, like basketball, but think others, such as baseball or soccer, are boring.
So if you figure that, in the overall TV universe, the viewers interested in a particular sports event are in the minority, why on Earth would broadcasters be spending these fortunes to lock down a sport, a conference, or a team or steal them from someone else?
What do live sports offer that no other type of programming does? Simple, live sports is DVR-proof.
Other programming choices can be recorded and watched later. You may be a fan of “Mad Men” and tune in for each new episode. But it’s just as likely that you’re busy when it’s on and are recording it to watch later. And if you are, you’re probably skipping over the commercials. And that’s bad news for advertisers.
Live sports generate record rights fees because broadcasters know if you’re watching sports, you’re almost guaranteed to be watching them live. You may have had a need to record a 49ers game this season, and watched it later, after avoiding anyone who could have given you the score. But most likely you were in front of your TV watching it live. And watching all the ads as well.
Advertisers know that it’s unlikely sports fans will record contests and watch them later. So they know these fans are captive viewers at specific times. So that means skipping over the commercials is almost impossible.
And when you factor in the notion that many fans skew young and male, it’s a no-brainer. Those are two tough demographics to reach. That’s why advertisers prefer sports to other types of programming and, therefore, so do broadcasters. And that’s why they’re willing to pony up amazing amounts of dough to bring them to you. But they hafta recoup that dough somewhere.
Which begs the second question, “How much is this gonna cost me?”. Well, that depends. One thing’s for sure, cable and satellite fees are going up. And many systems, such as DirecTV, are adding surcharges for regional sports networks like CSN Bay Area and the Pac-12 Network.
In LA, where, in addition to its two Fox RSNs and Pac-12, there’s the new Lakers channel and, starting in 2014, the new new Dodgers channel. It’s clear that folks in SoCal will be paying more for all these programming choices. How much more remains to be seen.
Suffice it to say, people who don’t like sports are tired of paying for these channels they never watch, so look for some of these new choices to be grouped into tiers that cost extra.
The bottom line is: if you like sports, be prepared to pay more for them. How?
To borrow a common San Francisco practice, you can pick an offramp and hang out in your Giants jersey with a sign: “Need a little help to watch the Giants on TV”. Just trying to be helpful.
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