Live sports programming commands the highest subscriber rates in the cable and satellite industry, and the competition for leverage in live sports programming is only going to get fiercer. Attracting more viewers is critical to keeping those subscriber payments rolling in.
We noted last week that sports programming currently nabs about 40% of a monthly cable or satellite TV bill, but not every subscriber cares about today’s big game, and these non-fans have figured out that they are subsidizing those subscribers who do care about sports. One might think that the sports networks would try to appeal to a wider audience in an effort to cool off those subscribers who want to clip 40% off their monthly cable or satellite bill. Instead, the networks do more of the same.
For example, Yahoo! Inc. (NASDAQ: YHOO) and NBC Sports Group, which is owned by Comcast Corp. (NASDAQ: CMCSA), today announced a content and promotion deal that will tie the two companies’ coverage of live events and sports news coverage more closely together. The tie-up aims primarily to cement the attention of rabid sports fans to the NBC and Yahoo! offerings by extending the digital reach of NBC sports and providing Yahoo! with live streams of some of the networks premier events.
No financial terms were disclosed, but it is hard to believe that NBC does not get the better end of the deal. Sports programming is gold for cable and satellite providers. But like all gold mines, the veins will eventually peter out.