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The Cable/Satellite TV Sports Bubble


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#1 NanuqoftheNorth

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Posted 19 February 2013 - 05:22 PM

The average household already spends about $90 a month for cable or satellite TV, and nearly half of that amount pays for the sports channels packaged into most services. Massive deals for marquee sports franchises like the Dodgers and Lakers are driving those costs even higher. Over the next three years, monthly cable and satellite bills are expected to rise an average of nearly 40%, to $125, according to the market research company NPD Group.
So far, people seem willing to pay. But the escalating costs are triggering worries that, at some point, consumers will begin ditching their cable and satellite subscriptions.
"We've got runaway sports rights, runaway sports salaries and what is essentially a high tax on a lot of households that don't have a lot of interest in sports," said John Malone, the cable industry pioneer and chairman of Liberty Media. "The consumer is really getting squeezed, as is the cable operator."
A key concern is that the higher bills driven by sports are being shouldered by subscribers whether they watch sports or not. National and local sports networks typically require cable and satellite companies to make their channels available to all customers.
"I pay $98 a month for cable and half of that is for sports?" said Vincent Castellanos, 51, a fashion stylist who lives in Los Feliz. "I've never once gone to a single sports channel. I wasn't even aware I was paying for it. I want my money back. Who do I call?"
Cable TV and satellite providers have long paid a premium for national sports channels such as ESPN. Now they are increasingly paying higher fees to the regional sports networks that carry local football, basketball, baseball, hockey and soccer games."There are not new pro and college games being created," said Dan York, an executive vice president of satellite broadcaster DirecTV. "You are getting the same product being reshuffled into smaller slices at higher prices. That's not a model consumers can continue to support."
Cox Cable executive Bob Wilson estimated that sports account for more than 50% of the bill for the provider's Southern California subscribers even though just 15% to 20% are regular watchers. "That relationship is getting way out of whack," he said.
For the sports leagues and teams, this is found money. When an investors group led by Chicago-based Guggenheim Partners paid $2.15 billion to buy the Dodgers from Frank McCourt last spring, many sports business analysts thought the buyers had wildly overpaid.
Guggenheim was betting that either Fox Sports or Time Warner Cable would spend big for the team. That gambit will probably pay off, as Fox Sports is trying to wrap up a deal this week to keep the team on its Prime Ticket channel, according to people close to the situation.
Under the current contract expiring at the end of next season, Fox's Prime Ticket will pay $39 million for the 2013 TV rights to the Dodgers. In 2014, that price tag would more than double — and continue to escalate for the next two decades. A Fox Sports spokesman declined to comment. http://articles.lati...s-cost-20121202

#2 pstall

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Posted 19 February 2013 - 10:12 PM

usually, when something starts getting the bubble label, its just a couple of years away.

i also think because so many cities are thin budget wise, they can't throw money at arena's/stadiums like they once did. charlotte notwithstanding.

i do truly believe a "sports correction" to some degree is neigh.

#3 Davidson Deac II

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Posted 19 February 2013 - 10:20 PM

This is why I don't really blame Time Warner for not carrying the NFL network. The charges for it are really ridiculous.

Well, if the channels start becoming that expensive, people might actually start going to the games again instead of watching them all on tv. :)

#4 Kevin Greene

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Posted 19 February 2013 - 11:47 PM

Sports is one of the few shows the male target audience with liquid cash actually watches live.
ie they dont record it and FF through the commercials and advertisers know it so the revenue pours in.
Cable and Satellite providers can charge top dollar because people actually watch the programming live, commercials included.
The NBA and MLB know this hence the price they charge to broadcast the event.

That being said the article you linked is from 12-1-12 and is no longer valid.
Since then the Dodgers have inked a massive deal with Time Warner Cable to broker their programming at a cost north of 7 billion dollars not only on their service but all cable and satellite providers who pony up.
So you want to broadcast dodger games to your TV customers? negotiate with TWC for access.
The Lakers as an example?
All major cable and Satellite providers have reached an agreement with TWC for the rights to broadcast Laker games except Dish Network.
Guess what. I'm a Dish Network customer and my monthly price has not dropped as a result of the savings Dish currently enjoys as they are paying TWC nothing, nor broadcasting Laker games.
Bottom line either way the consumer loses.

#5 Kevin Greene

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Posted 19 February 2013 - 11:48 PM

This is why I don't really blame Time Warner for not carrying the NFL network. The charges for it are really ridiculous.

Well, if the channels start becoming that expensive, people might actually start going to the games again instead of watching them all on tv. :)


Time Warner this year reached agreement with NFL Network to broadcast their programming.

http://www.nfl.com/n...iyear-agreement

Tyr to keep up DD!

#6 Kevin Greene

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Posted 19 February 2013 - 11:56 PM

usually, when something starts getting the bubble label, its just a couple of years away.

i also think because so many cities are thin budget wise, they can't throw money at arena's/stadiums like they once did. charlotte notwithstanding.

i do truly believe a "sports correction" to some degree is neigh.


Only the Hopper® lets you watch live and recorded TV anywhere¹ and instantly skip commercials² in recorded primetime TV. Plus, you can record 6 different shows at the same time during primetime² and store up to 2,000 hours of your favorite shows. The best part is it's free with packages starting at only $24.99/mo.*


This is why I dont see a sports bubble, but rather the horrid, unwatchable major network nightly programming bubble.
This Hopper technology has already been challenged and victorious in US courts.

The PrimeTime Anytime feature also allows DISH customers to record prime time shows on each of the four major broadcast networks (ABC, CBS, NBC and Fox) and save them for up to eight days. The AutoHop feature allows DISH users to play back these recordings with the option of skipping all commercials the next day after broadcast.
Not surprisingly, several major networks, advertisers and television content providers, led by Fox Broadcasting Company (as well as NBC and CBS), lashed out against the AutoHop feature and eventually went as far as to take legal action. Broadcasters continued to lambaste the DISH AutoHop feature throughout the trial. CBS CEO Les Moonves has been particularly vocal in his criticism of AutoHop, stating that he would pull all of CBS and its affiliated content from DISH if the AutoHop service was not suspended. Walt Disney Corporation CEO Bob Iger agreed, claiming that AutoHop would be “harmful to the TV industry.”


Hold on, we're close to being here:

Posted Image

http://www.dishdtvdi...-major-networks

95% of Network prime time programming is insulting to my intelligence, fug 'em.

#7 Squirrel

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Posted 19 February 2013 - 11:58 PM

I havent had cable/satellite for 3 years and dont miss it at all. What needs to be done is let the customer customize there cable channels. If you dont like sports you dont have to pick it up. Same thing with all these news stations.

#8 Kevin Greene

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Posted 20 February 2013 - 12:03 AM

I havent had cable/satellite for 3 years and dont miss it at all. What needs to be done is let the customer customize there cable channels. If you dont like sports you dont have to pick it up. Same thing with all these news stations.


I agree, everything you subscribe to as a consumer should be ala carte.
Dont think the majors will let it happen, but it should.

#9 Mr. Scot

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Posted 20 February 2013 - 12:08 AM

Worked with Time Warner many years back.

Always heard management complain that ESPN gouged them to carry their programs, but they couldn't exactly drop ESPN Networks from their lineup because they were some of their most popular channels.

#10 NanuqoftheNorth

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Posted 21 February 2013 - 02:19 PM

College football expansion fueled by cable and the big risk behind it.

The B1G is banking on forcing people in the New York/New Jersey/Baltimore/Washington D.C. markets to have to pony up for another channel that they may or may not want. That's all nice and good for us right now, but what happens when people in those areas get to dump the package deals and get to choose the channels they want? Will they decide to subscribe to BTN? Will Rutgers and Maryland still be as valuable then? Maybe. That is the true long term risk that the B1G takes with expansion, in my opinion. A la carte cable. And it's the long term risk all conferences will take when banking on an independent cable station to add to their coffers. How long will cable companies be able to continue to force people to pay for channels they don't want?

http://www.cornnatio...-risk-behind-it

#11 Hawk

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Posted 21 February 2013 - 02:40 PM

"I pay $98 a month for cable and half of that is for sports?" said Vincent Castellanos, 51, a fashion stylist who lives in Los Feliz. "I've never once gone to a single sports channel.


what are the odds of that?!!!!!

#12 mmmbeans

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Posted 21 February 2013 - 02:43 PM

this is why i don't have cable.

#13 NanuqoftheNorth

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Posted 22 February 2013 - 01:57 AM

NanuqoftheNorth, on 19 February 2013 - 01:22 PM, said:

"I pay $98 a month for cable and half of that is for sports?" said Vincent Castellanos, 51, a fashion stylist who lives in Los Feliz. "I've never once gone to a single sports channel.



what are the odds of that?!!!!!



I wondered at the time if the journalist could have found anyone less stereotypical than the guy he quoted. The BIG Ten Network expansion plan with UM and RU is to stick anyone that has basic cable with increased charges in the DC and NYC Metropolitan areas, (regardless of whether basic cable subscribers ever watch one second of the BTN or not) that got me thinking about when the public would finally start to revolt against these constant increases and abandon the 100s of useless cable channels for INTERNET À la carte TV/antenna based HDTV.

Note: "Upgraded" to Windows 8 recently and formatting anything on this site is now a serious PITA.


#14 Happy Panther

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Posted 22 February 2013 - 11:18 AM

I agree, everything you subscribe to as a consumer should be ala carte.
Dont think the majors will let it happen, but it should.


Intel is trying to do this

http://www.businessi...el-cable-2013-1

Intel is reportedly on the cusp of delivering something that consumers around the world have been wanting for a long, long time.

Kelly Clay at Forbes reports Intel is going to blow up the cable industry with its own set-top box and an unbundled cable service.

Clay says Intel is planning to deliver cable content to any device with an Internet connection. And instead of having to pay $80 a month for two hundred channels you don't want, you'll be able to subscribe to specific channels of your choosing.



#15 Kevin Greene

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Posted 22 February 2013 - 10:09 PM

Intel is trying to do this

http://www.businessi...el-cable-2013-1

Very interesting. I'd like to sign up for that beta.
I see some delays due to programming rights. I hope they roll it out even if the major networks aren't onboard as I can get them all OTA,
I would however bet ISPs, many of them also Cable providers will start nailing consumers for usage fees if bandwidth use goes way up.
Long term I think Intel will have to impliment wireless feeds like phone companies do to control costs.
Let's hope it happens, competition is good.


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