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Cable Flexes Its Muscles (Again) With ESPN's Wimbledon Win
Score another sports programming victory for cable, as ESPN announced today that it has acquired all of the U.S. TV rights to Wimbledon tennis in a
12-year deal beginning in 2012. ESPN's win was NBC's loss, as the broadcast network's 43-year association with the tournament comes to an end.
For ESPN, and for cable TV networks in general, it is another step in a steady progression of using their economic supremacy over broadcasters to obtain television rights to marquee sporting events. While ESPN is the undisputed leader, numerous other cable networks like TNT, USA, Versus, Golf and of course the regional sports networks (RSNs) such as Comcast SportsNet and Fox Sports Net have staked their claim to early round or full coverage of high-profile sports events.
For sports fans this is nirvana, as the resources dedicated to covering these events is deeper than ever, with more and more action televised. The flip side of this however, is that as pay-TV rates are increasingly driven by sports programming fees, non-fans have been subsidizing a greater share of the pie. As I wrote earlier this year, a back of the envelope calculation of how much sports networks now cost pay-TV operators to distribute, multiplied by even a small portion of today's pay-TV subscribers that may not care about sports translates into a multi-billion dollar/year non-fan subsidy.
As pay-TV rates continue to escalate, due to sports networks' need to recover the higher rights fees they're paying out through bigger carriage deals, a huge opening is being created to serve entertainment-oriented and budget-minded consumers through inexpensive over-the-top services. To date Netflix has capitalized on non-sports, on-demand interest, and slowly, but inevitably it will siphon off some portion of pay-TV subscribers' spending.
Notwithstanding the NFL and NBA lock-outs, it continues to be a great time to be a star athlete or marquee sports rights-holder as cable networks like ESPN lay out big bucks for top-shelf events. Just how durable this model is for those not interested in sports or those unable to pay has yet to fully play out.
Categories: Broadcasters, Cable Networks, Cable TV Operators
