The always-terrific Matthew Futterman has a great piece up at the Wall Street Journal laying out the details of the brewing war between sports leagues and cable carriers. (It’s behind their paywall, but if you’re not a subscriber you can go through the Google News link instead.) Among his findings:
- Most televised sporting events bring in a relatively tiny audience, 4% or less of all households. Yet sports channels account for 19.5% of fees paid by cable and satellite operators.
- Advertisers disproportionately love TV sports because 97% of viewers watch live (and so don’t skip commercials), as opposed to just 75% of viewers for non-sports programming.
- Nonetheless, some cable carriers are balking at exorbitant fees. AT&T has decided not to carry a new regional sports network launched by the Houston Astros and Rockets, and networks started by the Kansas City Royals, Minnesota Twins and Charlotte Bobcats all failed to be picked up in recent years, leading those teams to give up and sell their TV rights to existing channels.
- The number of TV households is growing, but the number with cable or satellite subscriptions is not, as more and more people choose to cut the cord. According to Nielsen, five million households in the U.S. now lack pay TV subscriptions, up from two million in 2007.
Add it all up, and it’s still not really clear where the cable price bubble is headed. But for any owners counting on ever-soaring TV revenue to fund their exorbitant purchase prices — or their pricey stadium or arena deals — it’s probably best not to bet too heavily on that.