New analysis from SNL Kagan shows that pay-TV companies are in for a big step up in sports costs over the next few years. The huge proliferation in regional sports networks coupled with the growing cost of sports programming rights is jacking up fees across the board.
According to the NY Post, Kagan predicts that while the average cost of the programming bundle will grow by 5.4 percent over the next five years, the cost of sports channels will rise by 7.3 percent across the next half decade — that’s compared to a 5.3 percent rise over the past five years.
“There’s been a flurry of new network launches. Now we’re hearing that Time Warner Cable might bid on The Clippers and you’d have another RSN based only on one team,” Kagan analyst Derek Baine told The Post. “It seems a bit out of control. How much can the market bear?”
There’s growing competition for rights with Fox Sports 1 and Fox Sports 2, NBC Sports, Turner Networks and the broadcast networks now competing with market leader ESPN, which charges the highest fee per subscriber per month at $6.55.
Pay-TV companies struggling to maintain their shrinking video margins, are simply passing along the cost to all customers.
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