by Michael Lowrey
Just came across a must read piece by Patrick Hruby of sportsonearth.com on the economics of sports and television. (The two are actually pretty much one and the same.) Yes, sports is the reason your cable or satellite bill keeps going up. The only question is when somebody develops a business model that disrupts the status quo:
Whatever the case, sports fans finally will have to pay market rates. The Sports Cable Bubble will pop. It has to. Just do the math. Fifty-seven million cable and satellite subscribers who don’t care about Dwight Howard’s decision or Yasiel Puig as the baseball reincarnation of Bo Jackson currently pay at least $100 per person into television sports kitty, each and every year. Someday they won’t have to. According to Dave Warner, the creator of the What You Pay for Sports website, losing just 10 million subscribers would cost ESPN $732 million in found-money affiliate fees. Now quadruple that number. Who makes up the difference? In a pay-only-for-what-you-actually-watch world, is Kentucky’s basketball coach John Calipari worth $5.2 million annually when his entire sport’s signature postseason tournament averages fewer viewers than CBS’s “Under the Dome?” Does the Big Ten Network even exist?