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Thursday, April 28, 2005 

The Color of Money

The Sports Law Blog recently had this post that commented on an LA Times editorial about the cost of NFL broadcasting rights driving up the price of cable. Both support the idea of "a la carte" cable, where sports channels are pushed into their own tier, and bemoan the fact that cable companies and/or the networks themselves are against it.

But the LA Time editorial undercuts this part of its own argument when it writes:

ESPN says it won't increase programming fees to pay for "Monday Night Football", but when its contracts with cable systems are renewed, the network undoubtedly will try to offset its higher costs with higher rates. So will NBC, which will want to raise prices for its cable channels, such as MSNBC, the USA network and Bravo, to make up for the costs of its NFL deal. Ditto for the other networks that broadcast sports.

As more networks get consolidated under a dwindling number of corporate umbrellas, the costs for sports get spread out across multiple channels that appeal to a wide range of viewers. The LA Times "a la carte" plan would allow you to drop sports, but what about MSNBC, whose price is also likely to rise according to their logic? For example, if half the country decided to drop ESPN, but everyone decided to keep the "ABC Family Channel", the ABC/ESPN empire would simply raise their price for the ABC Family Channel to make up for the loss of income from ESPN subscriptions. For most of us, our cable rates would stay about the same.

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