Why do I Pay so Much for Sports Networks?

Sports on TV – An Unfair Game

This is the result of two trends: First, the cost for broadcasting rights for the major Professional sports leagues has grown by over 75% in the past six years alone, from $10.8 Billion to $19.1 Billion.

Second, many pro and collegiate sports leagues, conferences and teams have created their own networks to carry games previously seen on existing channels, such as ESPN and local TV stations.

These networks, such as the SEC Network, PAC 12 Network and SportsNet LA, demand a large additional monthly fee yet provide little or no additional games.  They rely on their fans to pressure TV providers to carry the channel even though it directly impacts the monthly bill for all customers, not just their fans.

Game attendance used to be the sports leagues’ primary source of revenue.  But through TV rights, teams can get all consumers to pay them, even those not attending games. Today, TV rights represent the bulk of revenue for teams.

Regional Sports Networks – A League of Their Own

Sports programming by far is one of the biggest drivers of increases on your monthly bill and Regional Sports Networks (RSN) are among the most expensive channels carried by TV providers.

This wasn’t always the case. Historically, when RSNs started, they carried all the regional professional and collegiate teams on one channel. In the 1990s, as the cost of sports TV rights began to rise, programmers realized they could spin off teams to their own separate channels and charge providers as well as consumers more money for the same programming – but on different channels.

As the RSNs pushed the limit of what they could charge as monthly fees, they looked to other sources to help pay for their escalating sports programming costs – specifically advertising dollars. They ran into a problem – not enough TV households received their networks. This is when they started requiring television providers to distribute their networks on expanded basic programming tiers, bundled along with other national cable networks. To remain competitive, TV providers were forced into this new distribution model. Which brings us to today.

Even with our best efforts to control rising RSN programming fees, Cox can no longer continue to absorb these increased costs. We introduced the Regional Sports Surcharge (RSS) to better enable customers to track how the increasing costs of carrying sports programming drives the price of their TV service higher, above and beyond what would normally be reflected in periodic rate adjustments. The RSS covers a small portion of our costs to carry these increasingly expensive channels and Cox continues to absorb a large portion of these expenses.

At Cox, we constantly strive to improve and evolve our services to meet the changing expectations of the marketplace.  Rest assured, we will continue to negotiate fiercely with RSN programmers to keep our costs at a fair market value on behalf of you, our customers.

How Cox is Trying to Level the Playing Field

Cox believes that our customers should have a choice: Fans should have the option to pay to watch their favorite teams, while non-fans shouldn’t be forced to pay a substantial monthly fee for teams and channels they never watch. Cox is working with new sports networks to create more flexibility in the programming packages and on-demand events we offer with options such as Sports Pak 2. But the teams often demand that all TV providers offer their network on expanded basic – or they will not grant the rights to carry it at all.

What Others are Saying

AT&T Drops beIN Sports From Channel Lineups
AT&T’s DirecTV and DirecTV Now services have dropped beIN Sports from their channel lineups in a dispute over pricing and packaging. The blackout follows a similar move made by Comcast at the beginning of August. Verizon’s Fios also dropped beIN channels this month. READ MORE
Soccer network beIN Sports goes dark on Comcast. Verizon Fios subscribers also could lose it.
Comcast and Verizon said that beIN was seeking significant hikes in the subscriber fees. These fees are charged to Comcast and Verizon for beIN Sports channels and passed to consumers through monthly bills. Comcast said that it offered to carry beIN networks on “reasonable renewal terms” but that beIN rejected the proposal. READ MORE
beIN Sports USA Channels Dropped From Fios
Verizon said: “… Unfortunately, beIN Sports is demanding a significant rate increase for the same content they offer today.We have given beIN Sports a reasonable offer, but they rejected this proposal and we no longer have the right to carry their channels. We remain open to negotiating a fair agreement.” READ MORE
Charter: SportsNet LA will not be on DirecTV for 5th straight season
Charter Communications has confirmed that its exclusive regional sports network home for the Los Angeles Dodgers will likely remain blacked out for most of the Southern California region for a fifth consecutive Major League Baseball season. READ MORE
Dodgers put 5 games on KTLA; no DirecTV deal expected this season
The Dodgers own SportsNet LA. In exchange for a guaranteed $8.35 billion over 25 years, they granted Time Warner Cable exclusive marketing rights for the channel. Neither TWC nor Charter Communications, which bought TWC two years ago, has been able to reach agreement with DirecTV or other local cable and satellite providers to air SportsNet LA. READ MORE
How the Dodgers’ $8.3B TV deal turned into an unmitigated disaster
And that’s really the lesson in this Dodgers snafu, an unnaturally large microcosm of how the sports industry has transformed in the last quarter-century. The smartest executives saw the power of TV money, whether national for the NFL or local in baseball, and hoarded it like a prepper does gold. As teams celebrated their newfound bounty, those with cable and satellite subscriptions bore the brunt of the cost. READ MORE
Sports now account for 40% of pay-TV programming cost, SNL Kagan says
Sports programming now costs pay-TV consumers an average of $18.37 a month and accounts for 40% of programming costs for cable, satellite and telco video providers, according to SNL Kagan stats published by the Los Angeles Times Monday. READ MORE

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