Hey, remember how all the teams were about to get super-ultra-wicked-mega rich because the cable companies desperately need live sports content to keep their customers from Netflix-ing everything? Well, that may not be happening:
Baseball’s looming fiscal cliff
Pete Toms (Ottawa): Hey Maury. Skyrocketing local TV rights fees has been THE baseball biz story in recent years. The increase in fees is due to the cable industry’s belief that live sports is the key to staving off “cord-cutting”. I think the bubble is soon to burst with MSOs offering less costly “sports free” tiers to their customers (target audience primarily women). In a nutshell, I don’t think cable subscribers will continue to absorb the soaring costs of sports channels (RSNs). What do you foresee happening?
Maury Brown: Pete, as usual, you’re right on. I don’t know if the glass ceiling has yet hit, but it’s coming. The carriers have to pass much of the costs down to consumers in the way of subscription fees. You start piling these deals on top of each other (and remember, this story is bigger than baseball. See the TWC Sports deal with the Lakers, NCAA conference network deals, etc), and the bubble is bound to burst. The question is, who gets in before it happens? The Phillies have their deal expiring in 2015. While I haven’t heard, it wouldn’t surprise me to see them negotiate an extension well in advance.
Because of your stubborn love of baseball, you probably subscribe to 150 television channels you never watch. You’re probably not even aware of some of them, like Qubo, which I assume shows highlights from high-scoring games of Q*bert. Regardless, someone’s eventually going to figure out how to make money giving you just the TV shows you want, like baseball and Giada De Laurentiis*, and the era of nine-figure baseball broadcast deals may be short-lived.
* Don’t judge me.
See More:
