There’s an interesting story in the Los Angeles Times today about the rising cost of sports programming in cable/satellite television package. The upshot: about half of your cable bill now comes from the cost of sports programming, which includes both your local regional sports networks, as well as ESPN, MLB Network, etc. This, predictably, has non-sports fans and a la carte television pricing up in arms, which is about as hilariously awful as you would expect it to be if you have a rough idea of how the economics of cable work.
Here’s the dime store version of how this works. In addition to whatever costs related to physical hardware they may have, cable television providers have to pay networks for the rights to broadcast their content. The laws of supply and demand are pretty straight-forward here: popular networks that get relatively large audiences (like ESPN or YES) are able to demand much higher fees than smaller, nichey networks, and providers have much less leverage to balk at their asking prices, as a cable company that didn’t let you watch ESPN or whichever network broadcasts your local baseball team’s games would likely find themselves losing customers pretty quickly.… Click here to read the rest