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Cable TV angry about NFL broadcast deals

Jeff Tyler Dec 6, 2011

Kai Ryssdal: Next time you settle back on the living room couch to watch a football game, you’d better enjoy it for all it’s costing you.

The NFL has been making some lucrative deals lately with network and cable television companies: 60 and 70 percent increases in the fees those networks have to pay to put games on TV. And you know where those fees are going to land, right? Marketplace’s Jeff Tyler reports.

Jeff Tyler: Americans love sports, but they’re not so crazy about paying more to watch the games. Cable providers worry that rising prices will cost them customers.

Liberty Media CEO Greg Maffei spoke at a conference yesterday, where he channeled the voice of a disgruntled fan.

Greg Maffei: I’ll watch that Giants-Packers game at the bar or at my buddy’s house.

In particular, he singled out ESPN as driving up the cost of cable service. At some point, he says, fans weigh the price of bringing beers to a friend’s place versus paying for a cable subscription.

Maffei: You look at that and say, ‘hey, $8, $9 versus $90, I can watch a lot of games and drink a lot of beers for that.’

Until now, ESPN has leveraged demand for sports to sell packages of programming.

Andy Zimbalist is an economics professor at Smith College.

Andy Zimbalist: They have enough of the marketplace now that they can bundle all of their sub-channels, and in many instances, if not most instances, they can pretty much get their way.

So even if you don’t speak Spanish, you may get stuck with ESPN’s Deportes. But he says there is a limit.

Zimbalist: Like everything else with pricing in our economy, there is a market break that will tell them how far they can go.

When prices hit that breaking point, ESPN may be forced to offer its service separately from other cable programming. Some providers, like Time Warner Cable, are cutting out the network middlemen. It’s made broadcast deals directly with teams like the L.A. Lakers.

I’m Jeff Tyler for Marketplace.

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