ESPN Looking for 70% Increase in 2012 Negotiatinos

[chicagonettech]

According to a report in today's New York Post, ESPN is looking to up fees to carry their programming by up to 70% as they re-negotiate their contracts with providers.

"ESPN agreed to a whopping 70 percent increase to keep “Monday Night Football” on the cable sports network, paying a reported $15 billion price tag over eight years"

Read more: Networks scramble as NFL looks to up fees - NYPOST.com

Time to get serious about splitting sports packages out of the general content and make them an elective add-on. If Dish and other providers do not do this it is going to send package prices through the roof!​

 

[Tampa8]

HEADLINE;
DISH NETWORK TO DROP ESPN UNLESS THEY GO TO A SEPARATE PACKAGE

Source; tampa8

 

[CK SatGuy]

I call bull on this one. Yes, the article clearly states that ESPN paid 70% more to carry MNF but it doesn't say that they're asking for 70% more fees from the tv providers.

 

[jerryez]

If they now charge $3.50 month. Then after a 70% increade they will charge $5.95 per month for one channel that I can live without.
I vote Dish Drop the sucker.

 

[jerryez]

I call bull on this one. Yes, the article clearly states that ESPN paid 70% more to carry MNF but it doesn't say that they're asking for 70% more fees from the tv providers.

Where do you think they will get the money from?

 

[CK SatGuy]

They'll still get the money from us, but they'll be no way in hell that the providers are going to agree to a 70% increase without a huge fight.

 

[rapidturtle]

I would like to see them split it also. I only watch NFL, so I could just pick up ESPN for the 4 months of the season, and then just drop it. These athletes, and sports teams are getting ridiculous in the amount of money they are making and charging stations to carry the product. They are getting to the point where they may find out that we can all live without sports.

 

[Tampa8]

I call bull on this one. Yes, the article clearly states that ESPN paid 70% more to carry MNF but it doesn't say that they're asking for 70% more fees from the tv providers.

I agree, but they certainly aren't going to absorb that cost.

 

[odbrv]

Most of their revenue comes from commercials run on their channels. Commercial revenue is based on # of subscribers to the channel. If they lose subscribers due to high fees, they are hurting their ad revenue. So expect even longer games to allow more ads. I have season tickets to Texas Tech games. When the game is on Tv, it run at least 30-60 minutes longer.

 

[goaliebob99]

Most of their revenue comes from commercials run on their channels. Commercial revenue is based on # of subscribers to the channel. If they lose subscribers due to high fees, they are hurting their ad revenue. So expect even longer games to allow more ads. I have season tickets to Texas Tech games. When the game is on Tv, it run at least 30-60 minutes longer.

Yep... ESPN's revenue stream is 1/4 subs and 3/4ths advertising..... You pay for espn in that budlight your drinking, or that pepsi max you bought. That's the way TV works. You purchase programming to sell commercials. If you have high demand programming then you can get top dollar for commercials. It amazes me how people can chicken little the situation when they have no clue how network programming works.

 

[Tampa8]

Yep... ESPN's revenue stream is 1/4 subs and 3/4ths advertising..... You pay for espn in that budlight your drinking, or that pepsi max you bought. That's the way TV works. You purchase programming to sell commercials. If you have high demand programming then you can get top dollar for commercials. It amazes me how people can chicken little the situation when they have no clue how network programming works.

You are missing a huge element in this. Advertising spending is going down, yes even in sports, perhaps some sports is not affected as much as others, but overall spending is going down. Unless the economy rebounds watch for less and less advertising spending. Even Football is suffering with more unsold seats then in a very long time, which means the game is not even broadcast in the area in most cases.
So ESPN will be looking elsewhere to make up the difference. Wonder where.

"ESPN is also expected to begin talks with cable and satellite companies like Comcast about paying more to carry the sports powerhouse and its own highly priced NFL package, along with Disney’s other non-sports channels such as ABC and Disney Channel."

It amazes me how people can chicken little the situation when they have no clue how network programming works.

 

[eacalhoun]

As a general non-sports fan - I really like college hoops, but loathe professional sports of any flavor - I think the pros are way too greedy. I'm a capitalist and don't have a problem with anyone making what they rightfully earn, but I think pro athletes are nothing but greedy. They have made ungodly salaries for years and yet they still want more, for example the recent NBA lockout. That greed trickles down to affect the TV viewer. Please correct me if my analysis is incorrect.

 

[HanoverPretzel]

Time to get serious about splitting sports packages out of the general content and make them an elective add-on. If Dish and other providers do not do this it is going to send package prices through the roof!

If Dish does split sports packages off and charges an additional fee, it'll likely send me and a lot of other sports fans to a competing service. Why pay a premium for sports with Dish if I can get sports for no additional charge with Comcast or Directv or whomever?

Dish makes about a billion dollars a year in pure profit, right? I think they can swallow some channel cost increases and keep package prices the same. They'll just have to slim down their profit margin a little.

If Dish raises rates, they'll likely blame it on ESPN, but it'll really just be because they think they can increase their profit to expenditure ratio by charging more- they raise rates every year or two almost like clockwork regardless of channel costs (Not singling out Dish here, the same is true of their competitors).

The assumption people make is that if Dish drops ESPN's family of networks, they'll dramatically slash the price they charge to the end customers, but I don't think that's really what would happen. Dish drops local sports networks all the time and keeps the prices the same for people in those areas. Because ESPN is so high profile, they might cut prices $5 a month or something, but that's not hugely consequential relative to the value that end consumers will lose if they don't have those channels. And if they split the ESPN channels to a separate package, you can bet it's not going to be a situation where they cut the regular packages all by $5 and charge $5 extra for sports- they'll likely keep the regular packages the same price wise and charge $15 or more extra for sports.

Call me cynical, but I just don't buy that Dish wants to split off sports as separate packages as a service to sports fans. If they do it, it'll be to make sports fans pay out the wazoo.

Not that ESPN is innocent here attempting to hike their rates to television providers, but in the end it's important to me to have ESPN on my television at a reasonable cost. If Dish wants to charge me out the wazoo for ESPN by making it a separate package, or drops it completely, than it'll probably make more sense to call Comcast or Directv.

 

[HanoverPretzel]

As a general non-sports fan - I really like college hoops, but loathe professional sports of any flavor - I think the pros are way too greedy. I'm a capitalist and don't have a problem with anyone making what they rightfully earn, but I think pro athletes are nothing but greedy. They have made ungodly salaries for years and yet they still want more, for example the recent NBA lockout. That greed trickles down to affect the TV viewer. Please correct me if my analysis is incorrect.

I don't know if I agree with the caricature of the greedy professional athlete driving up costs for fans. While they are probably not entirely innocent, it's worth noting that owners are even richer than the players (By a significant margin), and if the players all made peanuts, the owners probably wouldn't voluntarily cut ticket prices or TV rights fees, the owners would probably just pocket the extra money they used to pay the players and be that much richer. It's the players' skills and hard work that drives professional sports, and they deserve a cut of that revenue (It's kind of inside baseball, but where I agree with the owners in most pro sports collective bargaining disputes is that we need more competitive balance).

College athletics likes to market itself as being free of the taint of big money, but their ticket prices are often high, too (at least for big time men's basketball and football), and they charge big money for their television rights as well. The only difference is that whereas pro sports sends some of their profits back to the athletes who's performances we enjoy, colleges pocket the money and give almost nothing back to the athletes who put their bodies on the line and work hard to entertain us (College athletes get scholarships, but that's small potatoes relative to the money that colleges make off them).

 

[CubsWin]

I am a huge sports fan, but I almost wish all the providers would just tell ESPN to go dangle (cleaned up for posting). It cannot be good for the consumer if one network carries so much power.

 

[Jim5506]

MNF is less than 2% of ESPN's programming, so it should be a less than 0.5% increase in fees, but who can tell.

 

[Tampa8]

If Dish does split sports packages off and charges an additional fee, it'll likely send me and a lot of other sports fans to a competing service. Why pay a premium for sports with Dish if I can get sports for no additional charge with Comcast or Directv or whomever?

Dish makes about a billion dollars a year in pure profit, right? I think they can swallow some channel cost increases and keep package prices the same. They'll just have to slim down their profit margin a little.

If Dish raises rates, they'll likely blame it on ESPN, but it'll really just be because they think they can increase their profit to expenditure ratio by charging more- they raise rates every year or two almost like clockwork regardless of channel costs (Not singling out Dish here, the same is true of their competitors).

The assumption people make is that if Dish drops ESPN's family of networks, they'll dramatically slash the price they charge to the end customers, but I don't think that's really what would happen. Dish drops local sports networks all the time and keeps the prices the same for people in those areas. Because ESPN is so high profile, they might cut prices $5 a month or something, but that's not hugely consequential relative to the value that end consumers will lose if they don't have those channels. And if they split the ESPN channels to a separate package, you can bet it's not going to be a situation where they cut the regular packages all by $5 and charge $5 extra for sports- they'll likely keep the regular packages the same price wise and charge $15 or more extra for sports.

Call me cynical, but I just don't buy that Dish wants to split off sports as separate packages as a service to sports fans. If they do it, it'll be to make sports fans pay out the wazoo.

Not that ESPN is innocent here attempting to hike their rates to television providers, but in the end it's important to me to have ESPN on my television at a reasonable cost. If Dish wants to charge me out the wazoo for ESPN by making it a separate package, or drops it completely, than it'll probably make more sense to call Comcast or Directv.

"Why pay a premium for sports with Dish if I can get sports for no additional charge with Comcast or Directv or whomever?" I'm not sure that is exactly true.

Some good points, but you are basing it on what is now. The prediction is, everyone will have to raise rates. Dish could differentiate itself (which by the way they have already alluded to be thinking of doing, and in fact have somewhat done already) by not carrying sports, or at least not in the regular packages. I might agree there would not be dramatic decreases, but there will be a reduction. Dish is already usually less expensive than the others, (Maybe because of their stance on RSN's?) this would easily make them less if you do not want sports.
So that leaves, what would the new sports package cost, along with the regular packages? Just as a guess of course, I would say in the end Dish will be on par with the others, who will have raised their package rates because of sports. The difference will be Dish subscribers would have a choice, pay quite some less than anyone else, or pay somewhat near the same with the sports package. I say this because I'm betting Direct and the others have reached the end of absorbing the cost of sports.

 

[murrays]

There is one thing everyone has overlooked. ESPN is part of other networks- ABC, Disney, Soap Net ABC Family etc. Dish already has a conflict with Disney. If they don't carry ESPN they could lose the other networks too. I agree that Sports should be broken out of the regular packages and have their own packages. Remember Charlie offered break out the "YES" Network and give ALL of the subscriber fees directly to "YES". But "YES" said no they wanted to be in the standard packages and wanted a fee from ALL subscribers not just subscribers to a "YES" package. DirecTV and Cable agreed to these terms then all the Reginal networks demanded the same deal. This is not too bad if you have one local team but if you are in a location where there are several local teams like Connecticut you could be paying fees to all these teams. Yankees, Red Sox, Mets, Islanders, Rangers etc.

 

[MikeD-C05]

I hope that 2012 will be the year that NON sports programming packs become the norm. I think that this greedy increase for Espn will be the straw that finally breaks the camels back so to speak. IF not, you are going to see more subs cut the cord, especially satellite subs as well as cable subs ,where they are already losing subs at a great rate. Look at TWC. They are going down fast on video subs. IF DISH would jump on this and spin off the sports packs come January ,they could name another FIRST for their company: The first company to offer Non Sports programming packs at substantial savings . Some have estimated a $10.00 drop in their basic programming packs, if sports were spun off into their own premium sports pack.

 

[rajmarie]

If my bill goes up because of ESPN...I will have to look at my options. I dont watch ESPN....expect maybe some basketball games...which I can live without. Hoping Dish can create a sports pack.. &put ESPN there...& actually reduce those core packages prices.