The Rising Cost of Sports is Driving Up The Cost of Cord Cutting & Cable TV

There has been a lot of talk recently about sports channels being dropped from streaming services and ongoing negotiations with both cable and streaming companies to air games, both regionally and nationally.

Here’s some insight about why sports have become more difficult to get rights to and how the costs have gone up dramatically in the last few years.

The reason behind the issues with streaming services losing sports programming is the rising cost of the rights to air sports, including the NFL, MLB, NBA, and NHL, and MLS.

An article from the New York Business Journal links the increase in prices to the rise in ESPN’s popularity. According to that article, ESPN wasn’t yet being taken seriously by the industry in 2008. Then, when Fox wanted to renew a contract with the BCS, ESPN swooped in with a $495 million bid for four years.

Following that deal, broadcasters began to change their retransmission consent strategies to begin charging distributors a carriage fee. ESPN also led major networks to launch separate channels to compete with the 24/7 sports airing. This happened at the same time that sports leagues were developing their own channels with MLB Network launching in 2009 and NFL Network following in 2012.

With traditional TV networks and streaming services all bidding for rights, the prices continue to rise.

This chart from Armstrong shows the cost to obtain the rights for sports programming.

These numbers are rising dramatically. In 2012, the total cost for the NFL, MLB, NBA, NHL, and MLS was about $5 billion. By 2014, that number was up to $7.7 billion. In 2018, the cost was around $10 billion, as shown in another image from RCN.

While negotiations and the battles for rights are guaranteed to continue, there are always ways to watch your favorite teams. Keep checking Cord Cutters News for updates on watching sports without cable TV.