Top executives from broadcast and cable networks predicted last week that sports rights fees will deflate to more normal levels when the current wave of contracts expires.
Speaking before the Intl. Radio & Television Society, execs from CBS, ABC, NBC, ESPN, Time Warner Sports and the Madison Square Garden Network all agreed that, the next time around, prices will be lower – or the professional sports leagues will have to look elsewhere for a place to sell their wares.
Ken Schanzer, executive v.p., NBC Sports, said he thought that the last round of contract pricing marked the end of sky-rocketing rights fees and that the leagues need to get in synch with the realities of the tv marketplace.
During the past 12 to 18 months, all three of the broadcast nets as well as the cable nets that offer sports programming have negotiated contracts that increased as much as 70% over previous deals.
To add insult to injury, most of the sports properties performed below expectations, garnering low ratings and taking in lower than expected advertising dollars.
However, CBS Sports topper Neal Pilson said knowing what he knows about today’s marketplace, he still would bid aggressively for the net’s exclusive broadcast network rights to Major League Baseball games (for which it shelled out $1.06 billion). He did confirm that the network had approached MLB about an additional term and some sort of financial agreement, but the league declined.
ABC sports topper Dennis Swanson suggested that when the current sports contracts expire, the leagues may turn to other potential media, such as pay-per-view, to offset what the networks don’t pony up. However, both Schanzer and Pilson said that the leagues would realize that the networks are the place to be.
On other issues:
* Time Warner Sports head Seth Abraham predicted that more individual events will turn to pay-per-view as a revenue stream, eventually followed by team sports like football, baseball and basketball.
* Steve Bornstein, president of ESPN, said that preliminary discussions had taken place between it and the National Hockey League about telecast rights once the current Sports Channel America pact expires.
* WPIX-TV New York and Madison Square Garden are close to a deal that would put one-third of the New York Yankees season on the indie. An announcement could be made this week, according to Bob Gutkowski, president of MSG. MSG has the exclusive rights to the Yankees and has been in negotiation with WPIX for several months. Speculation has MSG buying time on WPIX to telecast the games.