It is all about a third party’s money, the consumer.
The Disney-Charter cable TV dispute is yet another blow to big-time sports in 2023. Cable TV operators are aware that most of their consumers don’t watch sports and probably don’t want to spend more than $10 a month for ESPN and other ESPN channels. That is the center of the dispute. There also has been an erosion of cable TV subscribers. The cord cutters, the people who are dropping cable and satellite TV, are beginning to impact the cable TV revenue stream for teams and replacing that money is not going to be easy. Sinclair-owned regional sports channels have gone bankrupt and Warner Bros. Discovery is exiting the regional cable TV sports business. Major League Baseball Commissioner Rob Manfred has acknowledged that the Reagan Administration gave sports a great present. “It’s a great business model when a whole bunch of people pay for something they don’t really care if they have or not, which is what the cable bundle did for us. It’s hard to replicate that.” It will be hard to replicate. How much will consumers pay for streaming services? That is the great unknown.
With the Cable TV Act of 1984, Congress and President Ronald Reagan changed the rules and created what was in effect cable TV consumer socialism. Tier one was basic and gave consumers all of the local stations in the market but tier two or basic expanded was where money was to be made. Struggling ESPN became profitable as everyone who wanted basic extended cable had to take ESPN whether the customer watched the programming or not. Regional sports cable networks started and sports owners had a new money source which the players noticed. Salaries started to increase. The cable TV operators understand their customers don’t want to pay for something they don’t watch, which is sports.
Evan Weiner’s books are available at iTunes – https://books.apple.com/us/author/evan-weiner/id595575191
Evan can be reached at firstname.lastname@example.org