Spending over $8.4 billion for 25 years -- or about $336 million a year on average -- for the rights to air the Dodgers on cable might seem a prudent exercise to some. Yet according to reports, two years into its deal, Time Warner Cable might be losing $100 million a year on SportsNet LA.
All this while Comcast is still looking to finalize its deal to acquire Time Warner Cable, the second biggest cable TV provider in the U.S. (One Comcast executive estimates that the deal -- somewhat delayed by federal regulators -- will close sometime mid-year).
While sports TV programming still leans on appealing advertising attributes -- high numbers of hard-to-get male fans, live viewing with virtually no commercial skipping -- the likelihood of other pay TV providers signing on continues to be slim. DirecTV, Dish Network, Charter Communications, AT&T U-Verse and Cox Communications don’t want any part of paying that high price tag of around $4.90 a subscriber per month.
By way of comparison, SportsNet LA is the third highest-priced U.S. cable TV network. ESPN is number one at just over $6 per subscriber.
At the same time, a rash of new over-the-top digital TV network services have been launching, which look to give a lot of options to viewers -- including taking (or not) expensive sports TV networks.
Heavy sports consumers now have to make a decision if they believe other non-sports fans have been in fact subsidizing their sports TV fix for years. One estimate is that for ESPN alone, the network -- in theory -- might need $37 a month from subscribers -- should the entire cable TV network industry go to a full a-la-carte business.
Even if you don’t believe that estimate, it seems certain that costs for heavy sports consumers might change dramatically, with a big effect on those companies continuing to believe that sports on TV will still be a quick route to easy money.