Here's What ESPN Earns In Cable Fees Every Year
Sport is the most endorphin-filled sector for media companies today, because it is so lucrative. TV networks have two ways of making money: advertising and the fees that cable operators pay to carry their channels. Sports channels get heavyweight fees: ESPN makes around $5.54 for each cable subscription, according to SNL Kagan, a research firm, and will probably earn more than $7.31 billion in fees in 2014. Moreover, sport is one of the only things people still watch live on TV, so advertising rates are also high. Last year Nielsen, a research firm, reckoned that people spent 20% of their TV viewing hours watching live sports programming. That share will probably continue to rise.
Who will win when Fox Sports 1 takes to the airwaves? Rights for sport programming are already high, and will only continue to be bid up, as rival networks feel pressure to score the best assets to attract viewers. Consumers may like having another hub for sport programming, but they will probably have to pay more for it. As networks compete with each other for high-profile sports rights, they will charge higher prices to cable operators. Those operators will in turn raise consumers’ cable bills. Some companies, including DirecTV, a satellite operator, have already put in place a “sport surcharge” to help them recoup some of the money they have to pay to carry networks like ESPN. In sport media, just like in sport, sometimes scoring comes at a price.
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