Not long after ESPN announced its $15.2 billion, eight-year rights extension deal with the NFL for “Monday Night Football,” starting in 2014, the news surfaced that Dish Network could be headed for a split with ESPN over escalating rights fees, according to the NY Post. Why? Cable, satellite and telecom companies are bracing for fee increases in light of ESPN’s new NFL deal, which is costing a reported 73% more over its existing deal, which ends in 2013.
The new deal adds content, though–it includes the right to stream games to mobile devices and gives the network more sports highlights as well as the possibility of a playoff game in the future.
Negotiations are ongoing with NFL’s broadcast partners.
Dish wants ESPN owner Disney to offer the sports network on a separate tier from its basic package so that non-sports fans aren’t penalized. Already Dish has dropped several regional New York sports channels, including YES Network, MSG channels and SNY.
“Instead of knuckling under, he’s saying let’s save the $5 and multiply it by [Dish’s] 14 million subscribers,” a source told The Post.
In the past 18 months, ESPN has also paid big fee increases for Wimbledon tennis, Pac-12 and BCS college football.
Disney-ESPN is already the highest-priced network, at $4.69 a month per subscriber. ESPN’s annual increase is around 8%, compared with an industry average of 3%, per Kagan.
RBR-TVBR observation: You can’t blame the price increases on the sports networks so much, as obviously the fees for sports rights are going up. ESPN and others have to secure those fees because sports is their bread and butter. However, passing the fees onto subscribers is going to price more and more subscribers out of the mix, given our current economy. Perhaps companies like DISH, pondering a tiered solution with no sports, will pick up many of those disenfranchised customers, as the monthly cable bill just gets too high.