I am disappointed by the naivete displayed here. There is little question that basic tier channels, like ESPN, are subsidized by subscribers who do not watch them. None of us know how many subscribers would opt-out of such channels if a full la carte system was put in place, so it's difficult to ascertain the level of 'subsidization'. But an a la carte system does not mean everyone would have to pay more, nor even the sum total of subscriber fees would increase. The point is they would be fairer, a point not lost on the anti-a la carte folks here who would no longer have the benefit of saps like me lowering their monthly bills.
If by magic the major sports networks woke up in an a la carte system, they would have fewer subscribers. If they wanted to maintain their identical levels of service, they could adjust their per-subscriber rates to compensate. However they would finally be subject to true capitalism, meaning they would probably have to allocate funds for customer retention. So their rates would likely rise by more than the ratio of the before/after customers. If their rates rose so much that even more subscribers opted-out, the networks would for the first time have to deal with supply and demand forces that most other businesses are already accustomed to in an open market. This could force the networks to curtail their currently enormous war chests they use for absurd bidding wars for sports leagues and events. Leagues, teams and athletes would correspondingly be forced to accept what the true market was willing to bear. Similarly advertisers would not be bound to the anti-competitive practices of the networks and would pay lower rates. This would eventually reach an equilibrium, although some networks might go out of business, while others would merge.
On the distribution side, carriers such as DN would allocate costs to the subscribers. I'm sure they already know what it costs to service each subscriber, and they know what it costs to distribute any given channel. These are truly separate costs, and in a truly competitive environment (imagine that), no distributor will stay in the hunt by wrapping them together. If the sports networks take up 30% (made up) of the DN transponder space, DN could allocate 30% of their distribution costs (satellites, ground stations, distribution salaries, etc.) to the sports subscribers. They probably already do this for the international channels, which happen to be very pricey. Heavy channel subscribers would bear the brunt of DN's costs. That's only fair because if it takes a full bird to downlink sports programming, the sports fans should pay for it.
Thus people who want a lot of channels would pay considerably more and those with lesser appetites would pay less. It's fair to say that if I dropped from 200 channels to 20 on an a la carte system, I would not see a 10X reduction in my monthly bill, however if I stuck with all 200 channels, I would probably not see my fees go up by 10X either. But at least I would be paying for what I watched. Some of the specialty channels I like might become too expensive for their value to me. I might miss them, but there is no channel I cannot live without. In fact I could live fine without any of them - there is plenty to do in life and never enough time.
A la carte systems can work, even if they are not always fully implemented. Satellite distribution in Europe offers a lot more choices, and heavy channel consumers pay through the nose. The monthly rates for Premier League games are considerable, but so are the extravagant salaries paid to the players and the crazy transfer fees paid by the teams. This is one system where real economics are already coming into play. If the fans, leagues, teams and athletes cannot make it work, they will go out of business and their self-generated demand will flag. As a non-fan, I could care less.
At the moment there is little pressure for such change in the US. But the handwriting is beginning to appear. Do a little ratings research and you will find ESPN and the other major sports networks are losing market share, and especially where it hurts the most - young people. Apparently the up and coming generations have less interest and are comfortable choosing from a wider range of distribution options, including the Internet where they find a lot for free and select what they are willing to pay for. Yes, some ISPs will hit you for exceeding caps, but the caps are rising along with download rates. I pay a little more for an uncapped business line, but it's chump change. There will come a time when the last mile data rates are high enough they will make streaming video seem a negligible load. For some that day is already here. If the the cable/DBS companies, sports networks, leagues, teams and athletes don't figure this out, they will be subjected to much of the same upheaval currently being experienced in the music industry.
