Why the BCS went to ESPN

Or why your cable bill is going to increase

Why did the BCS leave Fox and head for ESPN/ABC? Of course money was the big reason. ESPN paid $125 million per year, and Fox offered only $100 million. However, there is more to the story. On-air broadcasters have seen revenue decline, while cable (or pay-tv) properties have seen revenue remain stable even during the economic downturn.

From the AP (you can read the entire story embedded in this post below), “With both advertising and fees, ESPN has seen its revenue grow to $6.3 billion this year from $1.8 billion a decade ago, according to SNL Kagan estimates. It has been able to bid for premium events that networks had traditionally aired, such as football games. …That, plus a growing number of channels, has given cable a bigger share of the ad pie. In 1998, cable channels drew roughly $9.1 billion, or 24 percent of total TV ad spending, according to the Television Bureau of Advertising. By 2008, they were getting $21.6 billion, or 39 percent.

“Having two revenue streams — advertising and fees from pay-TV providers — has insulated cable channels from the recession. In contrast, over-the-air stations have been forced to cut staff, and at least two broadcast groups sought bankruptcy protection this year.

“Fox illustrates the trend: Its broadcast operations reported a 54 percent drop in operating income for the quarter that ended in September. Its cable channels, which include Fox News and FX, grew their operating income 41 percent.

“Analyst Tom Love of ZenithOptimedia said he expects the big networks will end the year with a 9 percent drop in ad revenue, followed by an 8 percent drop in 2010 and zero growth in 2011.” (read more in this post below about why your cable or DirecTV bill will surely increase in the coming years.)

3 Comments

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  1. 1
    Pluto

    The Digital Signal- you can liken it to a very weak ground based radar. The signal is compromised further by topography , weather , man-made objects – hell I think a fat Chick could cross her legs and you would lose the signal.
    The Signal is degraded further after sunset. My experience – using a 30db signal kicker does not really help the signal. You either have it – or you don’t.
    The only people that can get it are in the Urban Core. If you recall – Big Brother did everything possible to make sure the Inner City could (did) get the Television – giving away converter boxes etc. Got to keep the Mob Happy !
    As for the rest of us dependent on Cable or whatever to see the stinking game – pony up.
    Free Television died the day it went digital. It was all about giving Band With to the Corporate Crowd.
    As Usual – F*ck the Public.

  2. 2
    BamaHate

    Great post Pluto.
    Going digital for TV was like the NAFTA agreement, just a matter of time to see how it f***s the public.

  3. 3
    DAMAGE INC.

    If you have Charter — I think you’re paying around $5.00 +/- 10% === it will eventually go up to around $7.00 +/- 10%. ESPN has to pay for that somehow. Plus, if you still have the rabbit ears kicking (with the new digi converter boxes) — it’s time to do a self evaluation of where your money is going month to month. I don’t know of ANYONE who doesn’t have cable. ESPN appeals to the masses now.

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