Expensive Cable Sports Are Always Expensiver Than Ever

Today the New York Times's Brian Stelter crunches the (preposterous) numbers and finds runaway sports-programming costs weighing down the cable bill of everyone in America, whether or not they give Shit One about sports. The phrase "impending $7 billion deal with the Dodgers" should give you an idea. Other, more humble figures tell the story just as well, e.g., the $5 per month that cable subscribers pay to receive ESPN. Southern California viewers soon may each pay that amount again to Time Warner Cable to cover that bloated Dodgers deal.

That sound you hear is pale, callusless hands wringing in corner offices high above the city streets. Stetler writes: "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.'" But then, what are you going to do in this era of unbridled sporting enthusiasm and recording devices that drive advertisers to un-fast-forwardable live programming?

Turns out the Times was asking the same questions at least as far back as 1989, with Joe Lapointe's "Television Lavishes Money On Sports, but Does It Pay?" now a recurring cultural artifact. ("Sports/sub fees article is written in one form or another every couple years," @TVSportsRTGS tweeted, noticing the synchronicity. "Nothing changes.")


Just for fun, why don't we take some passages from the two stories and see whether you can figure out whether they're from 2013 or 1989. Guess which is which; answers are below.


Available in more than half of American homes with television, cable has helped fragment the viewing audience. Along with the use of video-cassette recorders, cable has reduced the share of audience attracted by the major networks, and has reduced overall ratings for major sports events.

Curiously, some in the business say this fragmenting makes big-ticket sports events even more valuable.


Pretty much everybody in the business agrees that the overall costs are outrageous. Nobody has an easy solution.


Some executives at the distributors privately agree. They talk of a bubble caused by the high license fees commanded by sports leagues, and demanded by the networks that pay those fees. They say they want to keep costs down, and some have even threatened to drop low-rated channels from their lineups. But they continue to agree to pay more and more for sports.


''You are now at the outer limits of what the advertisers can afford. People are quick to jump to conclusions, but I'm not sure anybody knows what the future will bring. It's like the weather: stick around and it will change.'' (Don Ohlmeyer quote)


Big league sports provide prestige and broad-based appeal in a growing but increasingly diverse marketplace. Many in the television industry think that, in changing and uncertain times, sports programming is a safe bet to draw dependable ratings.


David Goodfriend, the chairman of the Sports Fan Coalition, said sports leagues were the root of the problem, because they "get exemptions from federal antitrust laws so they can legally collude and drive up prices for television coverage of the games." The coalition wants to cut what it calls "vast public subsidies."


''There is still an insatiable appetite for sports,'' said William Sherman, vice president and supervisor of national broadcasting for McCann-Erickson, which buys commercial time for advertisers on national network sports telecasts. ''Sports has a lot of magic to it. It is live, unrehearsed and dramatic.''


The deal for baseball, some say, is guaranteed to lose money.

''How can they possibly make money?'' asked Sherman, the advertising executive from McCann-Erickson. ''The answer is they can't.''

Got your answers? 2, 3, 6, are 2013. 1 (a gimmee), 4, 5, 7 and 8 are from the '80s. Just think that in 1989 these executives were fretting about CBS paying $1 billion for seven years of NCAA men's basketball tournament rights. The last time that deal came up, in 2010, the price tag was $10.8 billion for 14 years, or six times the previous annual price. No matter the string of zeros TV pays for premium sporting rights, the deals wind up looking like a bargain in hindsight.

Rising TV Fees Mean All Viewers Pay to Keep Sports Fans Happy [New York Times]