Higher Sports TV Carriage Fees: When Will Pay TV Providers Just Say No?

Threatening to take away your legacy TV sports content seems to be the last form of leverage that legacy TV networks and media companies have when it comes to retaining consumers and traditional pay-TV companies that pay big for the rights to distribute that content.

Media Matters for America believes this is what Fox Corp. attempted to do in its new carriage negotiations with DirecTV (which ended with a deal over the weekend, with no terms disclosed). The media monitoring group said Fox was threatening to black out some of its channels -- including sports channels airing the 2022 World Cup as well as college and NFL football games -- if DirecTV did not agree to Fox's fee increases.

The timing is always interesting with these carriage contract deadlines -- always seemingly around the NFL season with its higher viewing.

Separately, a few days ago, a lawsuit from YouTube TV subscribers claimed Walt Disney is engaging in antitrust practices with regard to its ESPN sports content -- that contractually agreed to periodic price hikes to carry ESPN run in tandem with price hikes Disney institutes around its own virtual pay TV service, Hulu+Live TV.



Is this just about traditional  and virtual TV providers complaining about arrogant and now hard-pressed legacy TV network groups, looking for every possible business leverage point to strong-arm distributors with higher costs? Or something else?

We wonder, then, why Google's YouTube TV would agree to those higher contractual fees -- and whether AT&T and private equity group TPG -- owners of DirecTV -- might cave in to such demands.

We know one thing: Sports rights fees continue to skyrocket -- not just the NFL, but other less engaging sports TV franchises -- because it's live, premium TV programming.

At a certain point, one might believe someone will pull the plug completely from the big sports-related networks. One gets the sense that something may be afoot. Slowly.

Over the last year or so, think about what has happened with YouTube TV,  Hulu+Live TV, and Dish's Sling TV. They are also standing firm on not carrying regional sports networks offering thin- to-no profit margins -- even if they are the most popular networks on their services.

Where do the sports teams and RSNs go? Streaming, of course. But that can be financially stressful, in a highly competitive market.

At some point, there might be a moment to let go more sports TV programming -- even some more highly visible sports programming -- via legacy sports channels or otherwise. The NHL? Some college football? The PGA?

Does this sound crazy? Well, if profitability is a goal -- a touchdown or home run -- then a new game plan is needed. (And maybe some new sports business metaphors).

When does that time come? When there is a major inflection point -- where ESPN+, Fox Sports, NFL+ (or other sports-league owned businesses) offer up a trick play that somehow changes everything.

Your Hail Mary pass into the end zone usually shocks all.

1 comment about "Higher Sports TV Carriage Fees: When Will Pay TV Providers Just Say No?".
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  1. Ben B from Retired, December 5, 2022 at 9:17 p.m.

    No one can say no to the mouse why when Disney network goes dark it only lasts a day or 2 at most also because some will drop Pay-TV with no ESPN more than an RSN in my opinion. Media Matters just doesn't like Fox News if they cared about these types of disputes they go after Disney, Warner Bros Discovery, NBCU, ETC, but they don't.

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