New Cable Bill–Would it Impact Sports?
John McCain is in the news for introducing a “TV Consumer Freedom Act” bill–the essence of which is to prevent “cable” from mandating certain bundles. There is also a provision that would preclude sports blackouts in publicly-financed stadiums. While sure to win points among populists, the bill has little chance of actual passing. Many special interest groups–led by the cable companies–will be banding together to oppose same.
The bigger question is whether bundled cable services impacts sports. We all recall that the Big 10 Network (BTN) ran into issues with obtaining a suitable price in the markets for some of its schools. Without knowing all the details, it is guesswork–but it can be assumed that the BTN demands more money per month from Nebraska than in Oklahoma. And, most importantly, the BTN demands to be part of a “basic cable” that people “must” have, rather than on a sports tier that people must choose. The difference is twofold–both in terms of quantity of folks adding it (everyone) and the cost that can be charged. The BTN wielded its power to receive that.
And ESPN has had similar battles with each new spinoff channel. ESPN will likely face similar battles with the SEC Network and any potential ACC Network. It’s good to get $1.00 per month to be part of basic cable. It’s not good to be on the Sports Tier or only obtain a few cents per month.
But what would happen if everything was a la carte? Presumably, the BTN and the SECn would be purchased by sports fans–perhaps even for more money per month. On the other hand, those sports fans could dump the channel in the off season–April to August. Still, if 25% of the people paid four times as much, the same revenue would be generated. It is just hard to conceive of someone opting to voluntarily pay to see a few meaningful games per year. The conference networks seem to benefit greatly by coercing the cable companies into “playing ball.”
That being said, the Confidential loathes the blackout rule. It is particularly absurd when taxpayers fund a stadium. No tears should be cried if that legislation ever passes. Frankly, the owners might not get it. Television is what will drive viewers into becoming future in-stadium fans. Keep wooing your audience.
Nevertheless, as the bill is not likely to pass, do not expect anything to change.
What do you think–are you generally in favor of this bill?
The Confidential 
I always thought the conference networks would have to be part of a bundle eventually. Why not bundle them all together (B1G, SEC, PAC & possibly ACC) and charge $5-$10 a month? I would pay that. I’ve always hated blackouts.
@lenvillecards Carriers typically have sports packages that including channels like this already. I have Dish which has a package that runs ~ $15 per month. Unfortunately for me, I’d have to upgrade to a larger (non-cheapskate) base package to be able to do it. Now, there’s going to be a real increase in the number of conference networks in the next few years, but I’d imagine the status quo will remain.
The transition to a more a la carte model is going to be interesting, but I won’t believe for a second that it will be driven by Congress. If anything, there should be an effort to encourage over-builders like Wide Open West to compete with the Comcasts and Time Warners of the world. But, to get neck-deep in the pricing and broadcast models (other than to require local access) is a bit odd. Between satellite providers, small-timer overbuilders, and big-name telcos like Verizon, consumers will have options and there will be even more competition than there is now.
McCain thinks there is some kind of monopoly out there? From the story linked above:
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
McCain said consumers only had a take-it-or-leave-it option when it came to purchasing cable programming. “This is unfair and wrong — especially when you consider how the regulatory deck is stacked in favor of industry and against the American consumer”, he said. “You can only do that when you have a monopoly”, he added. Not entirely blaming the cable companies, the senator called out “video programmers” such as Comcast, Time Warner, Viacom “and the Walt Disney Company, which owns 80% of ESPN”, compelling cable and satellite carriers to take their bundles and force subscribers to pay for sports and other channels when they don’t want or watch them.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Think about that every time you see an add from Xfinity, Fios, DirecTV and Dish as they pay to *compete* for your business.