Over the past 15 years, big media companies have been making increasingly pricey bets that sports fans across the country would refuse television packages if they didn’t include coverage of their favorite teams, paying out over $150 billion for rights to telecast games, according to Guggenheim Securities.
The sports channels that rose in the wake of these agreements have accounted for about 33 percent of the typical cable bill – that was until recent renegotiations with television distributors.
Pay TV Providers Play Hard Ball
Although sports programming has always been an important offering for cable companies, these providers have had to make some tough decisions in order to remain competitive as cord cutting gains momentum. One area many are seriously reconsidering is sports programming – or more specifically, regional sports networks.
Regional sports networks represent a lot of fat in a cable subscription, with costs as high as $5.36 per viewer per network for YES Network (home of the New York Yankees). To add insult to injury, parent company Fox is hoping to increase its fee to about $6 this year, despite the fact the second-most expensive regional sports network Time Warner’s Net LA (home of the LA Dodgers) has offered to cut fees 30 percent.
Fox’s efforts to shame Comcast into signing the new deal have done nothing to further the dispute, despite releasing anti-Comcast ads on billboards, radio and in newspapers and recruiting an army of protesters to take to the street in midtown Manhattan. Comcast claims fewer than two percent of its subscribers are part of the YES audience at any given time, and says it refuses to saddle their customers with unnecessary fees.
“We are not going to subsidize the YES business by charging a broad set of consumers when only a subset wants it,” Marcien Jenckes, Comcast’s Executive Vice President of Consumer Services, told the Wall Street Journal. It seems that YES’s 30 year deal for TV rights to the Yankees’ may have been a weighty gamble in a time when customers want less from cable companies and more control over their monthly bills.