Sports packages, not broadcast TV, swell MPVD fees


SportsMVPD operators are constantly whining to Congress and the FCC about how local broadcasters are bleeding them dry with demands for retransmission compensation. But the facts suggest that fees paid to broadcast sporting events are the real cause of MPVD’s inflated programming costs.

The escalating cost of broadcast rights for sports has been in the news for some time – and the latest to make note of it is the Philadelphia Inquirer.

According to PI, sports programming already accounts for about 50% of the programming cost that MVPDs pass on to consumers, many of whom a) don’t watch sports and b) don’t know they are paying significant money to not watch sports.

In some jurisdictions with regional sports channels, the price for sports programming can reach 60% of the bill.

PI offered Monday Night Football as a case in point – between 1998 and 2005, it cost about $550M a year to broadcast NFL games on the long-standing Monday night showcase. It now costs $1.1B, and the price will soar to $1.9B during the latest 2014-2021 term.

American Cable Association Chairwoman Colleen Abdoulah believes it is only fair to make sport offerings a premium selection as a protection for the many consumers who do not want it and in her opinion shouldn’t be required to pay for it.

RBR-TVBR observation: This isn’t news. It’s common knowledge that ESPN is the most expensive basic cable channel, and that people who never ever watch sporting events still have to pay a good $60 a year to not watch it, if they want to receive other cable channels.

We have seen signs that the tiered channel distribution model favored by US MVPDs is starting to crumble, and clearly, the program element most likely to bring that about is sports – it’s not hard to imagine outraged non-sports fans demanding government intervention so that they can stop subsidizing the sports cravings of others.

The conflict between local broadcast television is a side show compared to this, and it is generating far more noise than it rightfully should.