Sports, the 'battering rams' of pay television...
Broadcast TV Networks Grab Two-Thirds Of Sports Ad Dollars Despite Cable's Gains
Rupert Murdoch once described sports and films as the ‘battering rams’ of pay television. The expansion of distribution methods for television has placed scarcity in broadcasting away from distribution and onto content production. This gives copyright owners leverage because success as a broadcaster depends upon securing ongoing access to the the rights of distinctive and attractive programming. So, the bargaining power of television rights owners has increased. The growth in pay television has lead to bidding wars for attractive content from sustainable producers and inflated the cost of programming rights. Sports is the perfect example and trends show that sports franchises have moved from mainstream channels to pay channels over the last few years in increasing numbers. With direct payment, costs for outbidding terrestrial rivals are simply passed on to the viewer. Advertiser-supported broadcasters cannot do this. So the growth of subscription funding is inevitably shifting not only audiences but also economic power away from advertising-funded channels to pay-television operators.
This trend is clearly reiterated by Kagan Research today:
Excerpts:
Cable TV's steady siphoning of sports events from broadcast is a reality, but the big four broadcast networks still corral over two thirds of national TV advertising dollars from their lock on marquee events. Kagan Research newsletter Media Sports Business estimates that broadcast TV, cable and TV syndication raked in $7.4 bil. in gross sports ad revenue in 2005.
Broadcast TV's dominance in ad revenue is mainly due to football, including the Super Bowl. In Feb. 2005, Super Bowl XXXIX generated $186.1 mil. for Fox Broadcasting, including shoulder programming, Kagan Research estimates. Also in 2005, college football's Orange, Rose, Sugar and Fiesta Bowl games bought $116.7 mil. to ABC Television.
CBS is tops in national sports advertising with $1.65 bil. in 2005 revenue.
ESPN would rank fourth if cable networks were included, ahead of only NBC Television among the big four broadcast networks. A fifth broadcast outlet is also among the leaders—UPN ranks no. 15 for national sports TV ads due to wrestling (although UPN will shut down at the end of the current season).
