Five years ago, CBS and Turner Broadcasting agreed to pay the NCAA nearly $11 billion for the broadcast rights for the men’s basketball tournament over 14 years. It's the deal that puts games on CBS, TBS and TNT.
Denny Moller is among those watching again this year.
“My wife says if we don’t have sports programming we wouldn’t have to have a TV,” Moller says. “I agree with her 100 percent.”
Moller lives in Eagle. He’s a retired college football coach and watches sports on TV all year. On a recent weekday afternoon, Moller sat in front of an HD TV in his living room watching the Big Ten Network. The regional sports channel out of Chicago is one of his mainstays.
“There’s so many good programs that give you more than just a score, give you more than just which coach is gonna get fired,” he says. “And, delve into the lives of the players and delve into the lives of the coaches. You just learn so much more.”
For the dozens of hours he watches each month, the 73-year-old Moller pays about $110.
But he recently got word – again - that his DirecTV bill was going up this year. Cable One customers in the Boise got similar news. Across the country, subscribers to Time Warner and Comcast are again paying more. All the companies’ messaging was the basically the same: Your bill is going up a few dollars a month because of sports.
Derek Baine is research director at SNL Kagen, a company that studies the media industry.
“The problem starts with the sports rights,” Baine says. “Which are, the teams jacking up prices, sometimes 200, 300 percent when these big deals come up for renewal. So it’s just this domino effect.”
When it’s time for leagues like the NFL and Major League Baseball to sell their broadcast rights, networks like Fox and ESPN will pay huge sums of money for long term deals. More and more sports channels mean increased competition in the bidding process. Broadcasters recoup most of that through advertising. But they’ll also charge cable and satellite companies more to carry their channels.
Higher prices aren’t something cable companies want to talk about. CableOne did not respond to multiple requests for comment over two months. Time Warner declined our request for an interview.
At DirecTV, Dan York is chief content officer. He says his company is forced to raise its prices about 5 percent every year.
“This dynamic is difficult for paid TV providers because they have no choice but to pass these costs along to consumers,” York says. “And the rate of increase is unsustainable for customers, whether they’re sports fans or not.”
Analysts say big satellite and cable operators eat some of the increases, knowing they can’t pass all of them on to consumers or risk losing subscribers. SNL Kagen estimates operators have seen their profit margins cut nearly in half over the last 20 years. They’re expected to continue shrinking, even as customers’ bills go up.
The constant increases are leading some people – like Joe Jaszewski - to make changes.
“The past couple years I’ve really tried to cut out expenses from my life that were extraneous,” Jaszewski says. “And this was one of them.”
Jaszewski lives in Boise. He loves to watch football. But higher prices recently led him to rethink his subscription. He now pays DirecTV $50 a month during football season, and then shuts off his satellite service for seven months a year. Jaszewski says he couldn’t justify the service in the summertime, when he might go weeks at a time without turning on his television.
But Dan Rayburn, an analyst at the firm Frost and Sullivan, says people like Jaszewski are the exception.
Analysts say streaming options - like Dish Network’s $20 a month Sling TV – are alternatives for people who don’t watch sports. But Rayburn says, hardcore fans who can’t live without sports, should expect the trend of bigger satellite and cable bills to continue for years.
“The bottom line is that consumers are still willing to pay – they’re not willing to cut cable – because they want sports,” Rayburn says. “Sports is the one thing that keeps them there. They complain about it. They don’t want to pay it, but they continue to, they have no choice.”
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