May 5, 2020 - Economy & Business

The battle over live sports TV fees heats up amid coronavirus shutdowns

Data: S&P Global Market Intelligence; Chart: Naema Ahmed/Axios

The absence of live sports is reigniting the years-long debate over the real value of live sports in a Pay-TV package.

Why it matters: New York State Attorney General Letitia has argued that consumers shouldn't have to pay the same amount for cable and satellite packages, which include expensive sports networks, when those sports networks aren't carrying any live sports.

Yes, but: Contractually, it's unlikely cable and satellite providers will budge.

  • In an interview with Axios' Jim VandeHei last week, Verizon CEO Hans Vestberg wouldn't say that he would provide any rebates to customers, and instead insisted that his company is committed to not charging late fees until June.
  • As Sports Business Journal's John Ourand reports, "legally speaking, distributors can’t start seeking rebates (from TV networks) until September 2021 at the earliest," due to contractual obligations. The sports networks, at least ESPN, have at least 12 months to air a certain number of live events, per Ourand.

The big picture: Analysts and reports have begun to call out the tension between the networks and carriers ahead of earnings season.

  • Last week, the New York Post reported that Dish, which is notoriously known for being a shrewd negotiator with networks over distribution fees, is looking to get out of the $80-$100 million distribution fee it owes ESPN for April broadcasting rights.

By the numbers: The average monthly cable or satellite package in the U.S. is roughly $100. Sports accounts for roughly 20% of that package fee.

  • The top 10 most expensive cable affiliate fees in the U.S. are all sports channels — mostly regional sports networks — with ESPN being by far the most expensive at roughly $8 monthly.

Go deeper: Coronavirus' potential second wave looms large over the sports world

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