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July 28, 2013

Nary a Bubble in Rights Fees

Filed under: Media,Money,TV — Chas @ 9:30 am

If it wasn’t for live sports, I’d probably be a cord cutter. It isn’t that I dislike stuff on TV. Far from it. I watch plenty. It’s just that it is all time-shifted and when I get around to it. I’m not overly concerned about being at the water-cooler discussing last night’s Archer.There’s stuff over 2 years old on my DVR that I still haven’t gotten around to watching (no spoilers for the season/series finale of Awake, please). So between on-demand subscription services and the ever-dropping prices of series on DVDs, the wife and I could easily save money and drop DirecTV. But for sports.

People like me are the reason those rights fees keep rising. It is mostly immune to time-shifting which means sitting through ads, promos and everything else. In light of the recent spate of new rights deals for college sports programming. Along with the new FoxSports1 and their negotiations for carriage. Well it means cable/satellite TV rates keep going up.

It leads to those unwashed masses who don’t care about sports to fantasize about “a la carte” pricing for TV. Just picking and choosing the stations. Rather than helping to subsidize the overall cost for people like me, I’d have to foot the whole bill.

ESPN would “cost vastly more for sports fans, about $30 a month, if it was unbundled from the pay-TV package and sold separately only to those who wanted to watch it,” according to Bob Fernandez of the PHILADELPHIA INQUIRER. That would be “five times the $6 a month” that ESPN now costs as part of the “big TV bundles offered by cablecasters such as Comcast.”

CABLEFAX DAILY reports sports “accounts for about 50% of sub fees and accounts for less than 25% of total viewing.” Martin in her report wrote, “We can find no math where unbundling is the best economic answer” (CABLEFAX DAILY, 7/16).

 

Granted there would be large swaths of other TV I wouldn’t subscribe to, or redirect the money to on-demand subscriptions (and probably spend more on faster internet service). But realistically I wouldn’t see much of a difference to my overall expenses for TV media consumption.

Not that I’m really worried. Attempts to force “a la carte” pricing have gone no where legislatively. Comcast, Time-Warner, DirecTV, ESPN, Fox, etc. They all oppose and fight it. They lobby and spend plenty of money to prevent such things. They make the perverse claims of how the bundling is all about real freedom for the consumer, and what people want.

So that is never really taken seriously beyond some wishful, “If only…” discussions.

But what does get bandied about right now is that the sports rights fees are on a bubble that is getting closer to bursting. That the ridiculous sums being tossed around have to end sometime. That with more on the way with the SEC Network. An eventual ACC channel. The renegotiations with the Big 10. The next NBA deal. The other professional sports leagues always impending next round. Sooner or later there reaches a breaking point for the companies and what they can pass on to subscribers.

John Ourand at Sports Business Journal takes a pin to the talk of a bubble.

Throw in the sports channel carriage fights in Houston, Portland and San Diego, and talk of a sports bubble that’s about to burst becomes inevitable.

That talk is dead wrong, according to a super majority of my best sources. These executives believe the sports media industry is no closer to a bursting bubble than it was in 1993, when talk of a sports rights bubble first emerged. That was when Fox Sports outbid CBS by more than $100 million per year for the rights to the NFL’s NFC package. At the time, industry insiders thought the price was so outlandish that there was no way Fox would make money off that deal. Of course, the deal worked for Fox, and rights fees have risen ever since. For as long as I’ve covered the media business, people have been sounding an alarm about a sports rights bubble. Every five years or so, it gets louder…

It was loud in 1998, when distributors signed contracts that allowed ESPN to increase its affiliate fee by 20 percent a year. Such increases would surely price cable and satellite services too high for consumers.

They didn’t.

There was outcry around 2002, when the New York Yankees launched YES Network. Distributors would be priced out of the market if every team decided to launch its own network.

That didn’t happen, either.

The bubble talk got louder again around 2007, when the Big Ten Network launched. What if every conference — what if every school? — launched its own network? How could distributors afford that?

In ensuing years, distributors figured out ways to post record profits.

Now in 2013, talk of the sports bubble is back in vogue.

And why isn’t it different this time?

In fact, the networks and leagues have structured deals in such a way that if there is a bubble to burst, it won’t happen for another 10 years, at least.

The most recent media-rights deals run well into the next decade. The NFL signed deals through the 2022 season. MLB’s deals run through 2021. In college, deals run toward the end of the next decade.

The NBA, NASCAR and Big Ten are the next properties to go to market, and you can bet that they will cut deals that run into the next decade, too.

NASCAR just cut a $4.4 billion/10 year deal with NBC. Or about 50% more than what ESPN had been paying.

ESPN is pushing its ESPN3.com stuff, but even that has protections for its broadcast side. A person can’t subscribe to it. It has to have a deal in place with your internet provider. Considering how many internet providers are also the cable or FIOS providers, it all comes back around.

As much as ESPN is the 800-pound gorilla in sports media, they aren’t bidding in a vacuum. They stay in that position by outbidding most of the time competition from Fox, NBC, CBS and Turner. Rights fees aren’t going anywhere but up. It will just be a few years before we once more notice it happening.





I struggle to balance my TV costs with my desire to watch Pitt FB and basketball. At the moment I am mostly happy with the lowest tier Dish package that allows me to have the SportsPak (paying about $83/month). I have avoided Direct TV since to get the same level of Pitt sports coverage I would have to have a much more expensive higher tier of service and there are no other drivers in my home for any additional non-sports service as no one watches any movie channels or TV series–just some news and weather programming.

I am in the curious position where I live that I have Verizon for phone and internet but FIOS is unavailable. I am able to watch ESPN3 on my computer via Verizon DSL (low quality) but cannot watch it on other devices like my ipad because I can’t get FIOS. If FIOS were available I might consider switching from Dish.

Comment by pitt1972 07.28.13 @ 10:15 am

I’m glad at least that ESPN was outbid on Nascar. It would piss me off to no end to see ESPN or ESPN2 cover a prelim Nascar race in lieu of a college FB or BB game on a Saturday afternoon.

Live sports is about the only reason that watch ESPN anymore even though they continue to promote their talking heads as bigger than life …. or probably BECAUSE they promote their talking heads as larger than life

Comment by wbb 07.28.13 @ 10:23 am

In 1974, the NYSE went to negotiated commissions. Commissions went down. Who negotiates up? Well cable does, but those thinking the rights fees and such will contiune higher, they may, but maybe not. My guess is revenue increases will slow and new technology will eventually hammer the cable/phone providers.

Comment by chethejet 07.28.13 @ 10:37 am

Can’t wait for the day when these networks go to an a la carte way to choose your own programming. I hate that I have to pay for all the MLB games when I just want the Buccos! Or I have to pay for all the nfl games when I just want my Steelers! You should be able to purchase a sports pack by the city! I have the sports pack with directv and I get just about all Pitt football games except for some games like Old dominion or ysu. Hail to Pitt!

Comment by Sweet Caroline 07.28.13 @ 12:00 pm

More and more ppl are cutting the cord, especially among younger ppl who are more internet driven.

We cut the cord in late 2010, as cable/satellite prices nearly doubled and we couldn’t justify paying close to $100/mth for the little amount of TV we watched.

You can watch most live sports over the internet and then stream that to your TV. And if you must watch TV shows they’re available on HULU. And I believe smart TV’s are now available that will eliminate the need to stream from your computer.

Cable & Satellite TV is slowly dying imo.

Comment by EMel 07.28.13 @ 12:41 pm

EMel is 100 percent right i have net flix and the internet 48 dollrs a mth it is the way to go. get my tv programs a few weeks later then you csi ny
or bones etc but that is fine with me and movies
a ton of them.
beats the hell out of cable.

Comment by FRANKCAN 07.28.13 @ 9:01 pm

I’d love to cut the cord. Love watching college football and hoops and some other sports.

Other channels??? Maybe AMC, the History channel.

That’s about it. I watch my share of tv, but I would guess I regularly watch 7 or 8 channels and have 300 available.

Absolutely ridiculous. Not sure what to do.

Can’t watch sports on the internet, sitting in an upright chair. Not comfortable.

Occaisionally, if Pitt is on ESPN3 or something, I’ll turn on the computer. Even then, I find myself eventually walking away and doing something else, coming back to check on it once in awhile.

I’m not that into tech. Used to be, doesn’t interest me anymore. Emel, how do you stream games to the tv??

I am due for a new tv, before September.

Open to any and all suggestions on what to get.

I’m a middle class guy. I don’t know, $1000 to $1500 maybe, I guess.

Not paying any more than that. Maybe I’m stuck.

Verizon has the cord around my neck!!

Comment by Dan 07.28.13 @ 10:04 pm

And that figure is high. I see some of the bigger high def tvs now getting into the 700′s and 800′s. That’s what I’m really looking to get.

If a couple extra bucks could kill the cable guy, I would go for that.

I’ve heard some of these tv’s can be 3 or 4K???

Those wouldn’t be in my ballpark.

Comment by Dan 07.28.13 @ 10:06 pm

I was listening to Leo LaPorte’s (the Tech Guy) radio show the other day and he likes Vizio or Samsumg TV’s and recommends LED over Plasma since Plasma needs more of a darkened to be seen well.

Here’s a Vizio smart TV which ‘built-in WiFi, so no need to stream from computer.

“VIZIO Internet Apps® with built-in Wi-Fi gives you instant access to a world of streaming movies, TV shows, music, and more – all with the push of a button on the smart remote. The VIZIO E-Series 55-Inch Class LED Smart TV gives you more of what you love about TV with all the brilliant picture quality and world-class service you’d expect from America’s LCD HDTV Company.”

It’s a 55 inch HDTV , it’s got PIP and 1080P (full HD) for $798 thru Dell.

link to accessories.us.dell.com

You might even be able to find it cheaper on Ebay or some other vendor on the internet.

Comment by EMel 07.29.13 @ 4:33 am

@ Dano-o

Here’s a link showing how to stream video from a computer to a TV.

The 3rd method they mention is what I use. Works best with a fast computer and a fast internet connection.

link to pcmag.com

However if you’re in the market for a new TV, the Smart TV avoids having to stream and prices are dropping and looks like the best way to go.

I watched most of the Pitt games the last couple year on the …firstrowsports internet site.

HTP !

Comment by EMel 07.29.13 @ 4:47 am

I own a 13″ black and white portable and am just now getting the Bucs games broadcasts with Danny Murtagh at the helm.

Comment by Reed 07.29.13 @ 4:53 am

I have basic cable. If the sport is not on basic, I don’t watch it. Sports is entertainment……. nothing more.

Comment by mtoolmn 07.29.13 @ 5:12 am

Everybody says that a la carte internet streaming TV is the wave of the future but people dont realize that ISP’s dont have the bandwith to allow the masses to sit there and stream movies and sit-coms all day. As large as Verizon’s network is, they had to cap their data plan for some of those same reasons and they only had to worry about people streaming stuff on cell phones, not actual TV’s which would be used infinitely more for streaming shows.

We are a generation away from mainstream a la carte.

Comment by SMF 07.29.13 @ 6:12 am

Reed, those were the days. 38 Pirates games a year, all away games plus the Game of the Week every Saturday on NBC. World Series, all day games …. and that’s it.

Can’t remember if all of the Games of the Week back then were all Yankees and Red Sox.

Comment by wbb 07.29.13 @ 6:20 am

from today’s Plain Dealer

link to cleveland.com

Comment by wbb 07.29.13 @ 8:06 am

@Reed, don’t laugh, I’ve had thoughts of cutting all the cords, going minimalist, and listening on a transistor radio.

@Emel, thanks for the info brother!!

Comment by Dan 07.29.13 @ 9:25 am

Coach Chryst was just live on ESPN. Sounded great. Confident but personable and definitely rid himself of the stuttering that we’d seen in interviews the last few weeks. Gettin excited for the season!!

Comment by Jon 07.29.13 @ 9:28 am

@wbb, I do remember growing up in the 70′s, the American League umpires had maroon coats!!

Comment by Dan 07.29.13 @ 9:31 am

Dan I remember them. The ‘Men in Maroon’ just doesn’t sound right .. LOL!

But of course, in that era, most of the teams were wearing double knit polyester pullovers … and the White Sox even wore shorts for a season

link to mopupduty.com

Comment by wbb 07.29.13 @ 11:01 am

Here in God’s country (or so the rethuglicans call it) we dodge the Longhorn Network. Mostmcable subscribers can’t get it. When AT&T Uverse decided to carry it, I switched to Comcast. UT is loved or despised.

Comment by TonyinHouston 07.29.13 @ 11:17 am

Tony – Be honest there are no liberals here in the Great State of Texas except a few stoners in Austin.

Comment by Upittbaseball 07.29.13 @ 11:21 am

Wbb and Dan, I remember the big balloon chest protectors on the home plate umpires in the American League. And the Pirates games with Bob Prince, sponsored by Iron City Beer.

link to yourememberthat.com

Comment by KeyboardKev 07.29.13 @ 12:44 pm

@ Dano-o

Does anyone remember the AL home plate umpires always wore the outside chest protectors.

These 2 umpires were the last to wear the outside balloon chest protectors.

“Bill Kunkel and Jerry Neudecker were the last umpires to use the “balloon” protector. Neither made the switch, with Kunkel succumbing to cancer early in the 1985 season, and Neudecker retiring after the 1985 season.”

link to radicalbaseball.blogspot.com

@Upittbaseball.

One of the alltime libs was LBJ (Great Society). And for a mouth it was hard to beat Texas’s former Governor, Ann Richards. And who can forget, Lloyd (Jack Kennedy was a friend of mine) Bentsen, 24 year US Senator from Texas and VP candidate in 1988.

Comment by EMel 07.29.13 @ 12:56 pm

lol great minds…..KeyboardKev

Comment by EMel 07.29.13 @ 12:58 pm

upittbb, can’t believe you all didn’t vote in Kinky Friedman for governor with lyrics like these:

Well, I pulled into dallat on a cold december day
Bought coffee and a doughnut at the greasy spoon café,
Spied me a pretty young waitret standing by her tray,
But she couldn’t believe her sweet young ears when the waitret heard me say:

Oh, waitret, pleate, waitret, come sit down on my fate,
Eatin’ ain’t cheatin’, lord it ain’t no disgrate.
Oh, bring me a Lone Star, make it a cate
And waitret, pleate, waitret, come sit down on my fate.

(just the 1st verse of 5 … he also wrote ‘I’m just an asshole from El Paso’)

Comment by wbb 07.29.13 @ 1:06 pm

Emel and Wbb – LOL Guys… Hahaha. Emel – the fish took 2 of 3. Big series tonight!

Comment by Upittbaseball 07.29.13 @ 1:26 pm

@wbb

I believe Richie Zisk of the Buccos was traded to the Chisox and had to wear those ugly ass white sox uniform. That article said they only wore them for one game, I remember they wore them most of the summer. It might be wrong as the writer also mispelled, Comiskey Park, if that’s any indication.

@ upitt

Yea we could use another bat or two in the lineup, but you don’t want to sell the farm.
These guys just don’t hit very well with RISP.
They finally did something with some of the dead wood, Inge & Travis “Lunchbucket” Snyder. Anybody would be better in RF, call up Presley, Lambo from Indy.

Beat em Bucs !

Comment by EMel 07.29.13 @ 1:55 pm

@Emel, yes, I remember those things!! They were huge!

Hey, who was the ump that died, I’d say 90′s sometime. Big black guy, I believe his first name was Eric.

Oh, I mean, he died on the field. Nice guy, big smile.

Maybe I’m thinking of something else. It all gets mixed up as the years go on.

Comment by Dan 07.29.13 @ 2:15 pm

Pressly hit on my old babysitter in Louisiana. Haha. He’s quick and plays hard. Stanton is good but we would have had to given up too much. I love that Marlins pitcher kid that beat the bucs. He’s awesome. I’m going to the game Sat night as I’m town for a day or so.

Comment by Upittbaseball 07.29.13 @ 2:17 pm

Emel, I’ll guarantee you that they wore shorts more than just 1 night. Maybe it just the that style of uniform showed in the article.

Comment by wbb 07.29.13 @ 2:36 pm

@ Dan-o

Dunno ikr, I had quit watching baseball after 1993 or so when I moved down here and only after a friend of mine in Da Burg got me into a baseball f-league a couple years ago did I start following baseball again. Right about the time the Pirates became slightly relevant again.
In retrospect, I picked a good time to avoid baseball for awhile. (like almost 2 decades) :-)

@upitt

That’s funny about Presley. Didn’t know you were a Ragin Cajun. haha Word was Stanton wasn’t available. If they can get a stopgap in RF for a season or two until Gregory Polonco is ready, the kid is rated the #5 Outfield prospect in the Minor League Baseball. Yea have fun up there and get a couple wins.

@wbb

Yep your right buddy, they wore them more than just 1 night. Looked like a beer softball league team ! lol Bill Veeck was a crazy owner.

Comment by EMel 07.29.13 @ 3:22 pm

For those that might have missed it. Dr. Tom has an excellent ‘rant’ on Pitt’s football season last year that he posted this morning on the previous article……’Random Link Clearance’.

One of the more entertaining ones I’ve read lately. :-)

Comment by EMel 07.29.13 @ 3:25 pm

I’m a little late chiming in on the “streaming” conversation. But, nothing beats a Roku. For $50 you get a hockey puck sized little box. It streams from all of the typical sources…Netflix…Amazon Prime…Crackle…and many others.

They have a newer, upgraded model for $100. But, the $50 version works just as well.

Comment by Jrmutley 07.29.13 @ 4:58 pm

Dan, Eric Gregg, he rang up Floyd McGriff (Braves) with a called 3rd strike to end a playoff series on a pitch that was at least 2 feet outside .. in the mid 90s.

That was justice for all the strike calls Avery and Glavine got against our Buccos in’92.

Comment by wbb 07.29.13 @ 6:05 pm

link to ts1.mm.bing.net
just in case you thought I was exaggerating

Comment by wbb 07.29.13 @ 6:42 pm

are only LB committ this year hurt his foot and wont play this year.

Comment by FRANKCAN 07.29.13 @ 7:20 pm

Tra’Von Chapman guilty of attempted assault and will serve a 3 day sentence.

Now what??

Comment by isnore 07.29.13 @ 7:22 pm

Malik Hooker signs with the Buckeyes Football Factory.

Comment by isnore 07.29.13 @ 8:05 pm

chapman is done bye bye

Comment by FRANKCAN 07.29.13 @ 8:42 pm

Hey Quintin, tough news on the foot. Sorry you will miss your senior season! Not as sorry as your high school coach will be without it’s team leader. Good luck on your recovery and look to flying the Panther colors next time you suit up! Hail to Pitt! UPone

Comment by UPone 07.29.13 @ 8:55 pm

For Chapman… seems like they are not felonies… not sure if he is gone. according to PC each case is taken for its own facts. Who knows what really happened and how this kid reacted to the whole thing???

link to ohio.com

Comment by Pittscript 07.29.13 @ 9:09 pm

Bucs win, Bucs win !

Pirates 9 Cards 2 as in ’92.
The last year we played a significant game !

Great time to finally score some runs with a 4 run and a 5 run inning.

Amazing ! :-)

Comment by EMel 07.29.13 @ 9:17 pm

“Chapman originally pled not guilty to two misdemeanor charges stemming from the incident at his Kent home on April 26. University of Pittsburgh football coach Paul Chryst suspended the highly touted recruit indefinitely after the alleged assault.”

He was already suspended by PC according to this article and he was going to be redshirted this year anyway. Just keep him on suspension for the coming year and he’s on a zero tolerance policy.

Seems it would be a shame to wreck this kid’s future over a GF or former GF who’s motivation in this whole thing is not known.

Don’t of course know the whole circumstances of the case, but if this was a first time EVER charge against Chapman, I’d say his lawyer wasn’t very good.

Unless the female involved was a Girl Scout leader, A+ student and student council president.

Perhaps his record gets expunged once he completes the 40 hours of community service and pays the piper ($200).

Comment by EMel 07.29.13 @ 9:37 pm

Chapman is a goner.
Based upon the facts reported back in April I felt he should have been kicked off the team then as the case was very strong.
Couple that fact with Chryst bringing in 2 QB’s in this class. That clearly showed Chryst’s hand in the matter.
It appears Chryst wanted to wait until after the court hearing.

Chryst kicked Williams off the team for the same type of incident in October 2012. I can’t see how Chapman gets anything different.

Comment by Pitt.Dan83 07.29.13 @ 9:40 pm

yep, traditions are in full swing. Friday night lights at OSU, the big bbq cookout at Michigan. Great recruiting tools and they pull out all stops to close a recruit and their respective families.

Back to baseball in the 70′s…The umpire with the moistest was in the AL and went by the name of Luciano or Graciano…something like that. He was an entertainer and I enjoyed watching him!

Comment by dhuffdaddy 07.29.13 @ 9:42 pm

Here’s some strangeness.

Chapman played for the Roosevelt Rough Riders in HS.

You know who plays for the Saskatchewan Rough Riders

What are the odds ?

Comment by EMel 07.29.13 @ 9:54 pm

The Chapman case is a tricky one for PC. 3 days jail sentence and a plea of guilty makes it tough to overlook by Pitt and PC.

Don’t want to ruin a kids future but can Pitt allow this type of behavior by players? My guess is that he is a goner.

Comment by Pitt Fan In Atlanta 07.30.13 @ 12:17 am

Doesn’t matter what the circumstances were for Chapman. Beating up on a woman is as low life as you can get.

Comment by notrocketscience 07.30.13 @ 6:14 am

unless it’s Serena who could break any one of us in half with her thighs

Comment by wbb 07.30.13 @ 6:30 am

Guys – Chapman wasn’t sentenced to 3 days in jail… he was sentenced to 90 DAYS in jail and all but three were ‘suspended’.

“Judge Barbara R. Oswick sentenced Chapman, 18, to 90 days in jail and 40 hours of community service for assaulting a women at his home April 26 in Kent, Ohio. The judge suspended 87 days of the jail term and 20 hours that Chapman served working with the football team at Theodore Roosevelt High School in Kent.

Read more: link to triblive.com
Follow us: @triblive on Twitter | triblive on Facebook”

That is a huge difference but the bald fact is that his crime got him a three month sentence. Sorry fans but if Chapman is reinstated to the team then Paul Chryst a hypocrite having dismissed two players for misdemeanor drug charges – not even possession charges – then letting a young man who committed violence against a women back to play football.

Comment by Reed 07.30.13 @ 7:04 am

@Emel, I always liked Dutch Rennert’s strike calls. A called strike 3 you could probably hear in the next state.

Go Bucs! Maybe this is the year we have a football game (it would have to be Old Dominion on 10/19) conflict with a Pirates playoff game.

Comment by KeyboardKev 07.30.13 @ 7:06 am

EMael – the fact that Chapman and his lawyer felt it was necessary to barging down to an formal guilty plea and then STILL received 90 day sentence tells me that the details of what was reported may have been understated by quite a lot.

I also think PITT fans are missing one main point here in some ways. Chapman’s violence against a woman is bad enough but the judicial system puts a ton of importance in “unlawful restraint”. That is much more serious than it sounds – it means that Chapman held this girl against her will for some substantial period of time, I believe it was reported to be for hours. That isn’t just closing the door or something, it is holding her captive against her will.

I think that might have just as much to do with his harsh sentence as the violence did.

Comment by Reed 07.30.13 @ 8:22 am

@ Reed

Yea like I said I don’t know (or didn’t know by the ohio.com link that was posted previously) all the particulars of his case.

Which is why I added that disclaimer. :-)

Comment by EMel 07.30.13 @ 10:01 am

@ KeyboardKev

Yes it seems the umpires of old, were much more ‘showmen’ and most of them all had their own unique way of calling a game. It’s pretty generic today unless I’m not watching enough games.

Which sort of goes along with the current trend of blending in.

Comment by EMel 07.30.13 @ 10:03 am

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