When does the rsn bubble burst and what shape will pro sports be left in?

[nfotiu]

Dodgers on the verge of signing a 250 million dollar a year local tv contract!!!

http://www.deadline.com/2012/11/excl...medium=twitter

There is no way this is sustainable. They are relying way too much on collecting higher and higher rights fees from people not even watching the channels. One way or another a la carte tv viewing is going to come and deals like this are going to make it happen sooner than later. There are going to be a bunch of bankrupt sports teams when this bubble eventually bursts...

http://deadspin.com/5962206/news-cor...er-to-bursting

[Northendzone]

I keep hearing that sports is the last of the "appointment viewing".

But it seems mind boggling they can pay those rights fees plus whatever production costs and still make some money.

[Cheese]

I can understand. I just look at my TV bill every month...I wish we could just buy the channels we wanted...and the sooner the better.

[WilderPegasus]

The bubble isn't going to burst until sports fans are the only ones left subscribing to cable/satellite service. When that happens and it will everything will come crashing down.

[nfotiu]

Originally Posted by Northendzone

I keep hearing that sports is the last of the "appointment viewing".

But it seems mind boggling they can pay those rights fees plus whatever production costs and still make some money.

Here's the best thing about the dodgers story. They've recently had some of the worst ratings in baseball, and average only about 57,000 viewers per game. If I remember correctly, that is less than half the amount of people watching flames games!!

http://m.sportsbusinessdaily.com/Jou...-ratings.aspx?

They will make their money by jacking up their rights fees to the 5 to 10 dollar range, and have the region's five to ten million cable subscribers pay 300-400 million a year in these rights fees.

So essentially 5 million households are paying 60 to 100 dollars a year so 57,000 fans can watch the dodgers. There is no way this model is going to survive.

[troutman]

Only 57,000? I find that shocking. Isn't there over 10 Million people in Metro LA?

Looks like the Lakers do 271,000 (67,000 for Dodgers).

This is an interesting subject.

Some NHL teams regional ratings are "crickets chirping". Ex. 3,000 households in Phoenix.

[Joborule]

Originally Posted by troutman

Only 57,000? I find that shocking. Isn't there over 10 Million people in Metro LA?

Looks like the Lakers do 271,000 (67,000 for Dodgers).

This is an interesting subject.

Some NHL teams regional ratings are "crickets chirping". Ex. 3,000 households in Phoenix.

Those are interesting numbers. They seem extremely low for regional viewing, considering how big of a following those teams get.

[speede5]

The older I get the more things I think I could be doing rather than sitting in front of a tv watching yet another game, especially on weekend afternoons.

I find myself watching less games every year, and don't mind catching them on the radio or even the highlights.

There are lots of fans who support these teams and watch a percentage of games, the number of diehard never miss a game fans is pretty low.

[nfotiu]

Interesting NY Times article about this topic in light of the ridiculous $350 million per year Dodger's deal:

http://www.nytimes.com/2013/01/26/bu...ewanted=1&_r=0

[Jason14h]

Not until the TV cable model dies!

Sports remains TV's only PVR/Download/Watch later proof programming for advertisers. As other means of viewing become available, these spots that can ensure real time viewers become more valuable.

[nfotiu]

Originally Posted by Jason14h

Not until the TV cable model dies!

Sports remains TV's only PVR/Download/Watch later proof programming for advertisers. As other means of viewing become available, these spots that can ensure real time viewers become more valuable.

You're missing the point. Sure that is applicable to sports that are being watched on tv in large numbers, but this RSN bubble is being created by steep carriage fees shared by everyone when in some cases less than 1% of the subscribers are actually watching. In most of these RSN deals, advertising dollars are not even covering production costs.

[nfotiu]

Interesting lawsuit, could be the first of the dominoes that bring this all crashing down.

http://www.fiercecable.com/story/cab...3PQsM89R.email

[nfotiu]

A couple articles from the end of last year on this subject possibly showing the beginning of the end of this bubble:

But what the Astros were scheduled to be paid for the broadcast rights to their games differs significantly from what they received. Forbes reported that the CSN Houston deal called for the Astros to be paid $56 million this year, but the network paid only $25 million because it didn’t have the revenue to meet its obligations.


There are several factors contributing to CSN Houston’s bleak financial situation, but biggest is the network’s inability to reach agreement on carriage fees with the non-Comcast cable and satellite operators in the viewing area. AT&T-Uverse, Time Warner Cable and DISH Network have, thus far, refused to pay the $3.40 per-subscriber-per-month fee that CSN Houston demanded to carry the network. As I wrote in July, cable and satellite companies are using more sophisticated rating data to determine who is and who isn’t watching local sports. AT&T-Uverse decided against carrying CSN Houston based on this new, detailed ratings information. Overall, 60% of the homes in the viewing area don’t have CSN Houston.

http://www.fangraphs.com/blogs/astro...-and-lawsuits/

Will 2014 be the year when distributors make a serious effort to slow their rising sports costs? It’s possible, especially in dealings with regional sports channels — particularly time-warner-cable-logo__130821213653-275x126in Los Angeles. Time Warner Cable is about to introduce a service for Dodgers games, SportsNetLA, following its launch last year of SportsNet and Deportes which show Lakers games. The cable company is said to want other distributors to pay $5 per subscriber per month for the Dodgers, roughly the same price MSG charges for its regional service that offers the New York Knicks and Rangers. But so far other distributors have not stepped up to the plate. DirecTV could help everyone hold out; the No. 1 satellite company has led the charge against high-priced regional sports networks. It declined to carry the Pac-12 Network which is home to two schools (UCLA and USC) in the key LA market, the University of Texas’ Longhorn Network, and Comcast-owned sports services in Portland, Philadelphia and Houston. (The Houston network filed for Chapter 11 bankruptcy protection in September.)

http://www.deadline.com/2013/12/cabl...appen-in-2014/