Combining pay-TV's recent "mini-bundle" trend with SNL Kagan data suggesting that 43 percent of cable subscribers don't cut the cord because of their affinity for live sports, Businessweek did some rather interesting number crunching on what a trimmed down "sports only" pay-TV package might look like.
The publication's fantasy pay-TV package includes the four major broadcast networks, plus 13 sports networks--everything from national sports cable titans like ESPN and Fox Sports 1, to regional channels like SEC Network, to league platforms like MLB Network, to mainstream channels with a lot of licensed sports, like TNT.
Using SNL Kagan carriage fee data, Businessweek determined the per-subscriber licensing nut to be only $20.91 per month. However, with only 43 percent of the current 99.4 million U.S. pay-TV homes getting the channels, licensing fees would have to more than double to sustain margins.
Margin pressure would only be further exacerbated by the loss of advertising reach experienced by the networks.
"To keep the current margins, the dream cable sports bundle would probably have to cost closer to $50 per month, a much less attractive proposition," concludes Businessweek's Ira Boudway.
This wasn't necessarily an ungrounded, fanciful effort on the part of Boudway--TV industry executives involved with sports are already thinking hard about this.
Speaking at a Sports Business Journal conference, Turner Broadcasting president David Levy said, "Mini-packs are key to bringing in a viewer that never was going to buy cable. We're making sure that we are in those mini-packs. Sports certainly helps drive that."
For more:
- read this Businessweek story
- read this Sports Business Journal story
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