People have traditionally been able to “ooh” and “aah” at big-money sports contracts and TV rights deals with cool detachment, as if the salaries paid star point guards or fees extended to football owners were bits of gee-whiz accounting, otherwise divorced from reality.
Moving forward, though, consumers and a mostly docile sports media contemplating those mind-boggling figures will have to start to realize the shit is going to start hitting the fans — and even more so, the non-fans.
For all the talk about “American Idol” or myriad award shows building toward the Oscars, one commodity dominates the TV calendar in January and early February like no other: football. And with a flurry of new TV contracts enriching the National Football League to the tune of roughly $5 billion annually once they kick in — a staggering increase of more than 60% over existing agreements — well, somebody’s going to have to pay the freight on all this.
Broadcast networks will no longer be content to view sports as loss leaders — the kind of must-have commodity they’re willing to take a financial bath on to maintain circulation. They’re going to want to offset their investment, either through sweetened retransmission fees from cable and satellite operators or altered agreements with affiliated stations.
Meanwhile, cable channels and systems — especially ESPN, but also entities like Fox and Time Warner Cable — have rolled the dice on sports as the best hedge against the worst possibilities of a digital future. While the prospect of people dumping cable, or “cord-cutting,” has perhaps been overstated, championship games and playoffs represent the kind of live events people will absolutely demand, and potentially pay through the nose to get. (Full disclosure: I’m a part-time contributor to Foxsports.com.)
The push-comes-to-shove element hinges on the simple fact that TV isn’t a landscape of unlimited resources. If networks shell out huge amounts of money for something, they’re going to try getting it back somewhere, somehow. To quote the old song, something’s gotta give.
So who’ll feel the pinch? The aforementioned affiliates, and almost certainly smaller cable networks, which will get squeezed in future contract negotiations with system operators trying to offset higher fees to sports-carrying channels.
And, of course, consumers.
The prospect of rising cable bills has simultaneously renewed talk of establishing pay tiers and a la carte pricing — both of which would require fans to ante up directly for the sports they crave — probably more fair, on the face of it, than forcing said super-fan’s grandma to shell out $5 a month for the privilege of getting an ESPN service she doesn’t watch.
Of course, at least ESPN provides year-round service, which is more than can be said for something like NFL network, which still demands steep monthly fees — more than 70¢ per sub per month, per SNL Kagan — even when the league is essentially dormant more than half the year. And now college conferences and individual universities such as Texas U. are capitalizing on the insatiable appetite for sports by creating their own dedicated channels, further slicing away at the pie.
Theoretically, more choices for consumers are a good thing. But enterprises like ESPN are all about leverage. Having rights to the NFL, NBA or MLB actually creates more of that in dealing with distributors, advertisers and consumers.
Moreover, if some form of a la carte pricing does come to pass (or punt or kick), premium sports channels will only exacerbate the have/have-not divide that already exists between those who can afford arena luxury boxes and a majority resigned to watching their local heroes on TV (or the computer or hand-held device).
Highlighting this point, a reader recently wrote the Los Angeles Times lamenting the migration of all but a handful of college bowl games to cable.
After losing his job, he said, “I had to cut back on a lot of things — one was cable TV,” which now means he “can’t even watch the Rose Bowl thanks to ESPN and the almighty dollar.”
The leagues, universities and networks would no doubt clear their throats and feign sympathy when presented such cases. But the harsh reality is a marked shift from free TV toward a world favoring those who can afford to pay in order to watch others play. Because despite the prevailing image of sports as our shared sandbox, entering the new digital playground comes at a price.