September 20, 2016
By TVA Editorial
Rising sports programming costs could have consumers crying foul. Nearly half of the monthly cable or satellite bill goes to sports channels. Escalating prices are triggering worries that subscribers will start walking away someday. The owners of baseball’s Dodgers were expected to receive US$6-billionplus for the TV rights to their team’s games. That may be a big win for the home team, but consumers won’t be doing high-fives once they see their pay-TV bills. The average household already spends about $90 a month for cable or satellite TV, and nearly half of that amount pays for the sports channels packaged into most services.
Massive deals for marquee sports franchises like the Dodgers and Lakers are driving those costs even higher. The price of TV broadcast rights for sports in the age of time-shifted Sports fans– get ready to shell out more dollars to watch your favourite teams battle on TV. Well, you’re going to pay more if you want to get traditional television service or internet service from a cable, satellite or telco provider because of the way the industry is structured.
But what is the endgame for the ever-evolving business of sports television? Who will give in: content providers, distributors or the common fan? K. Dass examines the multi-billion dollar questions. viewing has soared. After all, it’s high-demand content that viewers don’t DVR. And unlike other video entertainment, it’s not available on Netfl ix or other Internet services. But as networks bid rights into the stratosphere, something’s got to give. Some distributors fear that unless things change, sports fees could eventually drive consumers away from pay-TV in droves — prompting a plunge the business won’t be able to pull out of. On the other hand, consumer disagreement has yet to become an uncontrolled rebellion, and it’s not clear that the willingness to pay has been tested.
It’s a sure bet that finger-pointing and contract fights between networks and distributors, not to mention viewers and the occasional regulators, will continue. The situation is particularly awful in certain markets. For example: in 2014, Time Warner Cable inked a 25-year distribution pact with baseball’s Dodgers valued at about US$8.5 billion for a team-owned sports network, according to a Los Angeles Times report. To recoup those rights fees, the regional sports network asked for more than US$4 per subscriber per month for just one team, (Whether that winds up being the actual rate is another matter). Meanwhile, individual nets that don’t get carriage could be left holding the bag for massive TV rights.
For the industry as a whole, however, nothing will change unless subscribers begin fleeing in masses. It cannot be assumed that service providers will continue to pay increasing fees for sports rights. In-retrospect, consumers will also reconsider the price tag for premium sports content as they will have to bear the cost through subscription. Indeed, speaking in a panel discussion, Warren Packard, CEO, Thuuz Sports, said that cracks were already appearing in the U.S. He cited the examples of Pac-12, which is now in the fourth year of a dispute with DirecTV and Time Warner Cable, which paid a lot of money to get exclusivity for the LA Dodgers but has since been unable to sell the rights.
Let’s take a step back and analyse how sports has evolved over the years. Sports have advanced from a mere leisure pursuit to a high paying professional career. Together with the sportsmen, an ancillary of services have developed to amplify the game into a periodic event, professionally competed at a regional and global level. An entire ecosystem involving: logistics, insurance, equipment, venues, gear, brewages, supplements, medical care, brands, sponsors, communication, broadcasting and many more professional services. The cushions built to comfort the sportsmen and magnify events have all contributed to the soaring rise in ticket sales, athlete’s compensation and subscription cost.
Television Asia caught up with ONE Championship’s CEO Victor Cui. ONE Championship is Asia’s largest sports media property with a global broadcast reach of over one billion homes in 118 countries. It is widely recognised as the greatest mix of martial arts promotion in Asia. “Sports have evolved from content that you could only engage on your TV screen. Today, you can connect directly with the athletes on Facebook, Twitter, view their lifestyle on images via Instagram, and watch them compete on TV,” says Victor.
“The biggest evolution in sports over the last few years has been in Asia. For the past 3 decades of sports in Asia, all that was done is basically importing Western heroes and having them adopted by Asian sports fans. Rightly so, as majority of the greatest athletes are from the West. Today, in ONE Championship, you will see the making of authentic Asian sports superheroes in a game that we truly are the best – the world of martial arts,” Victor expressed. A total of 6 billion viewers around the world tuned in to watch Live football during the Euro 2016 tournament, according to figures reported by Sky Sports.