Sports-TV Fans: Your Rebate Check Is Not in the Mail

Author

Michael Beach
May 28, 2020

Big news: Sports are (hopefully) back!!!

Quote from Mark Cuban – Owner @ Dallas Mavericks:“Once we start to turn the corner and can start playing games, everyone who has ever had an interest in sports will be craving to watch games, to root for their team, to cheer with friends, to have something that takes our minds away from everything that has happened.  We need that release.”

Why this matters: ≈ 23% of the average monthly pay-TV bill goes to sports, and the natives customers were getting restless with no live games to watch.

Source of monthly fees (% of total) that make up monthly cable bill according to Kagan:
1) Entertainment – $30 (35%)
2) Sports – $20 (23%)
3) News – $4 (5%)
4) Other – $30 ($31)

Quick math on pay-TV subscriber fees for sports networks:
1) ≈ 80M pay-TV subscribers
2) $20/month in fees
3) $1.6B in monthly fees
4) $19.2B in annual fees

Source of monthly fees by network (% of total) that make up monthly cable bill according to Kagan:
1) RSNs – $10.70 (55%)
2) ESPN – $7.69 (39%)
3) Fox Sports – $0.71 (4%)
4) NBCSN – $0.42 (2%)

Big question: What could have potentially happened if sports were canceled for the rest of 2020?

Quick Answer:
1) Pay-TV customers demand refunds from pay-TV providers↓
2) Pay-TV providers demand refunds from networks↓
3) Networks demand refunds from sports leagues↓
4) Sports leagues stop paying players

YoY average daily prime-time viewership change according to Nielsen:
1) NBCSN – ↓ 58%
2) ESPN – ↓ 54%
3) Fox Sports 1 – ↓ 31%

Buckle up: Sports rights fees could rise between 26% and 100% in the upcoming renewals!

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