There's a point spot in the football-buddy flick North Dallas Forty--among the better sports movies ever made--where one of the big linemen becomes frustrated with his coaches and screams, to paraphrase, "Every time we say it's a sport you say it's a business and every time we say it's a business you say it's a sport."
The line still has impact, even though the movie's showing its age. When it debuted in 1979 football--and baseball, the Olympics, hockey, soccer, college basketball, college football, golf and even Little League and Pop Warner football--were sports. There's no question today that they're all big businesses run for owner profits and player salaries--unless those players happen to be in college; then they're run for college profits, not professors' salaries.
Anyone who still believes that fans in the stands pay those big salaries or help owners to those second helpings of profits must still be living in 1979. It's not even the people who buy the overpriced merchandise and the brand name jerseys and uniforms and golf clubs and golf balls who pay the bills. Cable TV, satellite and telco TV subscribers are unwittingly digging into their pockets to make sure that their favorite players are driving the best cars and living in the best homes.
To a point that's OK because some of those subscribers have purchased sports packages and are willing to pay for their season ticket. The problem arises--and the dreaded words "a la carte" are mumbled--when less-enthusiastic sports subscribers buy into The History Channel and Lifetime and end up paying for ESPN and Fox Sports. It's a problem--or at least a problem in the a la carte wings--when they buy USA to watch Burn Notice and unknowingly end up paying for the National Hockey League.
It's a problem when they live in New York and subscribe to Time Warner Cable (NYSE: TWC) to unwittingly subsidize the Los Angeles Lakers or subscribe to Comcast in Detroit and help pay the Philadelphia Phillies buy the best pitching staff in baseball.
Sports' spending could steamroll right through pay TV service providers' all-too-tight channel bundles. Last week's news that the Pac 12 conference had landed a 12-year, $3 billion deal with Fox and ESPN came hard on the heels of NBC's deal with the National Hockey League, which followed down the court from Time Warner Cable's Lakers lock-up. On tap are the San Diego Padres, floating around in the ether after Cox Communications walked away and the Dodgers, reportedly in a brewing brouhaha between Fox and Time Warner Cable.
In the middle, wearing the barrel and no clothing, is the cable subscriber whose bill keeps going up faster than inflation. Subscribers are and have been unhappy about higher bills; if they ever realize that a lion's share (or Tiger's share, Detroiters) of that money is subsidizing teams and sports in which they have no interest, they're probably going to become even angrier. The industry has learned in the past that angry subscribers eventually get the attention of Congress and bad things tend to happen.
Perhaps all is not as bleak as it might seem, despite the sports feeding frenzy. NBCUniversal CEO Steve Burke, for instance, inserted a word of reason into the situation when eager analysts asked whether NBC, now under Comcast's (Nasdaq: CMCSA) tighter fist, would again spend big bucks spread across its broadcast and cable networks to televise the Olympics.
"We're in business to make money and our approach is going to be disciplined," Burke said. "As it relates to the Olympics or NFL, we think those are two fantastic properties and would love to have them but would like to make money. There are a variety of ways you can make money, advertising or investing in a cable channel that would allow you to get increased advertising or increased affiliate fees, but at the end of the day we're not going to do anything that does not have a business plan that pencils out to a positive."
A disciplined approach to sports spending? Now there's something subscribers and TV viewers will probably embrace.
Editor's Note: During my long and storied career, I spent some time as a sports writer covering the professional and college sports scene. It's not a pretty place.--Jim