NCTA's Powell fears sports programming costs could draw federal scrutiny

Ecosystem becoming fragmented by programming fee disputes
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NCTA chief and former Federal Communications Commission Chairman Michael Powell has become the latest cable TV industry voice to be heard criticizing rampant hikes in the value of sports programming rights.

Michael Powell, NCTA

Powell (Image source: NCTA)

Powell said during an interview on C-SPAN that fee jumps, such as the recent 73 percent premium hike the NFL was able to demand from ESPN to continue televising Monday Night Football, are getting out of control, and that if costs continue to rise, the federal government may have to step in. He acknowledged this is a turn of events that no one in the pay TV ecosystem would like to see happen.

Liberty Media (Nasdaq: LMCA) chairman and industry pioneer John Malone also was recently heard criticizing rising sports programming costs, and concerns have escalated industrywide as cable TV operators and broadcasters are getting into programming fee disputes with increasing frequency.

The rising value of sports programming is driving many on the distribution side of cable TV to consider the viability of standalone sports programming offerings, which many in other parts of the ecosystem dislike because of the negative effect they could have on advertising revenue if the potential audience for sports programming suddenly becomes marginalized.

Ironically, however, a more fragmented sports broadcasting environment is resulting from sports conferences, leagues and teams (For example, the NFL Network, the Big Ten Networks, the Lakers channels, the New York Yankees' YES network) that want a bigger piece of that advertising revenue, even as their efforts create more segmented single-channel audiences. The existence of more broadcast options is only making it harder for major sports broadcasters and their distributors to keep costs under control.

For more:
- read this LA Times story

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