This is the result of two trends: First, the cost for broadcasting rights for the major Professional sports leagues has grown by over 85% in the past four years alone, from $5 Billion to $9.4 Billion.
Second, many pro and collegiate sports leagues, conferences and teams have created their own networks to carry games previously seen on existing channels, such as ESPN and local TV stations.
These networks, such as the SEC Network, PAC 12 Network and SportsNet LA, demand a large additional monthly fee yet provide little or no additional games. They rely on their fans to pressure TV providers to carry the channel even though it directly impacts the monthly bill for all customers, not just their fans.
Professional sports leagues have grown by over 50% in the past two years alone.
Game attendance used to be the sports leagues’ primary source of revenue. But through TV rights, teams can get all consumers to pay them, even those not attending games. Today, TV rights represent the bulk of revenue for teams.
Sports programming by far is one of the biggest drivers of increases on your monthly bill and Regional Sports Networks (RSN) are among the most expensive channels carried by TV providers.
This wasn’t always the case. Historically, when RSNs started, they carried all the regional professional and collegiate teams on one channel. In the 1990s, as the cost of sports TV rights began to rise, programmers realized they could spin off teams to their own separate channels and charge providers as well as consumers more money for the same programming – but on different channels.
As the RSNs pushed the limit of what they could charge as monthly fees, they looked to other sources to help pay for their escalating sports programming costs – specifically advertising dollars. They ran into a problem – not enough TV households received their networks. This is when they started requiring television providers to distribute their networks on expanded basic programming tiers, bundled along with other national cable networks. To remain competitive, TV providers were forced into this new distribution model. Which brings us to today.
Even with our best efforts to control rising RSN programming fees, Cox can no longer continue to absorb these increased costs. We introduced the Regional Sports Surcharge (RSS) to better enable customers to track how the increasing costs of carrying sports programming drives the price of their TV service higher, above and beyond what would normally be reflected in periodic rate adjustments. The RSS covers a small portion of our costs to carry these increasingly expensive channels and Cox continues to absorb a large portion of these expenses.
At Cox, we constantly strive to improve and evolve our services to meet the changing expectations of the marketplace. Rest assured, we will continue to negotiate fiercely with RSN programmers to keep our costs at a fair market value on behalf of you, our customers.
Cox believes that our customers should have a choice: Fans should have the option to pay to watch their favorite teams, while non-fans shouldn’t be forced to pay a substantial monthly fee for teams and channels they never watch. Cox is working with new sports networks to create more flexibility in the programming packages and on-demand events we offer with options such as Sports Pak 2. But the teams often demand that all TV providers offer their network on expanded basic – or they will not grant the rights to carry it at all.