Recent Changes For Sports Television Networks

My #1 goal is to Make Volleyball more Prominent in the Media - nationally, regionally and locally.

This month's edition is designed to shed some light on the ever -changing world of sports on cable television.

In the world of cable television, 2002 and 2003 have brought significant changes to the number of channels available to its customers. Most cable systems have completed upgrades from analog to digital transmission. For customers, this means better signal quality and more channels. For some customers, this has also brought the opportunity for high-speed Internet via cable lines. For cable companies, this means more revenue opportunities from networks, reduced transmission cost and hopefully more satisfied customers. Many cable systems are offering the additional channels via digital tiers or specialty tiers (such as sports or entertainment). Most of these changes to cable television were spurred by the competition of DBS (satellite television). In an effort to satisfy customers, cable operators had to provide better service, better picture quality and more channel choices.

In 2003, cable television has seen the emergence of five new ultra-niche sports networks: The Tennis Channel, The Football Network, The NFL Network, Fuel (extreme sports) and CSTV (College Sports Television). The two primary revenues for cable networks are fees from cable operators and advertising revenue. Without a substantial number of homes, there is little advertising revenue. Most cable systems pay the network xx cents per subscriber and want long-term agreements (rates vary based on programming content, demand for the channel, and if network will accept placement on a tier). Most networks would rather be placed on basic cable and not a tier, as the number of homes is often substantially fewer because customers have to pay extra for it.

While it will take some time for these new networks to achieve national distribution from cable operators (available audience is about 85 million homes), most networks have launched with 3-5 million homes. Fuel is a FOX-owned network and has benefited from “programming bundle agreements” with its other networks such as FOX Sports Net, FOX Sports World and FX. The other networks will stand on their own laurels and may take longer to achieve a higher subscriber base. These new ultra-niche networks are considered a “gift” for programming providers for these genres. The AVCA was able to secure a long-term agreement with CSTV for Sunday Night Spikes, the AVCA Match of the Week. Sadly so, the larger and more established networks such as FOX Sports Net and ESPN/espn2 charge program suppliers to purchase air time (prices can be as high as $160,000 per hour plus production costs). Due to other programming commitments, FSN and ESPN have little room in their program schedules for collegiate programming other than national contracts for football and men’s basketball. This year has also seen the expansion of more “entertainment” programming on these two national sports networks such as “Playmakers” and “Best Damn Sports Show Period.”

In the last year, there have been several new regional sports networks launched or proposed. The following regional networks have launched (professional team rights have been the catalyst for the change): Royals TV Network (MLB Kansas City Royals), Cox Sports Television in Louisiana (NBA New Orleans Hornets), YES Network (MLB New York Yankees). There have been rumors that new regional sports networks may launch in the coming years in the following areas: Sacramento, Seattle and Houston. Recently, Comcast purchased the rights to all professional teams in Chicago. They will be launching a new regional sports network in Chicago next fall. It is still too early to know the fate of FOX Sports Net Chicago, but it’s unlikely they can continue without professional team contracts. You should close pay attention to these rumors in your markets, as the development of a new regional sports network could provide an excellent opportunity for television coverage for your programs.

Next month’s Media MVP article will feature professional sports rights fees (what the future holds and is there an end in sight to the outrageous rights fees) and the ratings decline for major sports on network television.

For additional information, please free to contact me at shelly@sharpermedia.net or via phone at 936-582-2256.



 

Media MVP is written by Shelly Harper of Sharper Media who was hired in July 2002 as the media consultant for the AVCA and its members. Harper has more than 20 years of experience in sports television and her broad background in this field can be read at www.sharpermedia.net. Harper can be reached at 936-582-2256 or via e-mail at shelly@sharpermedia.net if you have a question and wish to utilize her expertise in this area.