TOM HUDSON: Speaking of spending on other things, finally tonight,
content is king. Remember that phrase from the late ’90s? It still rings
true today, especially when a new star emerges, like New York Knicks
basketball point guard Jeremy Lin. His sudden popularity helped end a
black-out of the Knick’s MSG cable network on Time Warner (NYSE:TWX) Cable.
It’s on tonight’s “Beyond the Scoreboard” with Rick Horrow.
RICK HORROW, CEO, HORROW SPORTS VENTURE: There’s no way of knowing
how big a catalyst Jeremy Lin was in settling Madison Square Garden’s month
and a half fight with Time Warner (NYSE:TWX) Cable. What’s certain is, in
these cable disputes, the sports content providers like MSG have all the
leverage. Sporting events are one of the few things people still watch live
and with most games still difficult to watch on the Internet, having access
to channels such as MSG is an incentive not to cut the cable cord.
However, as the cost of sports rights increase, cable subscribers are
paying the price. Disney’s ESPN, which has multi-billion dollar TV deals
with the NFL, NBA, MLB and several college conferences, charges cable
companies nearly $4.70 per month to include it on their channel line-ups.
By comparison, TNT is the second most expensive national network and
receives just $1.16 a month in subscriber fees.
The challenge for sports TV is that content providers stiff-arm their
way into homes, driving up your cable bill. For instance, 99 million
Americans have to pay for ESPN, whether they watch the channel or not. If
rights fees continue to skyrocket, non-sports fans could rebel and drop
cable altogether in favor of digital TV-everywhere models. In response,
cable operators could move towards a la carte programming, in which
consumers choose specific channels they want rather than general tiers.
But with most of the TV industry resisting the a la carte model, there’s no
way to know what the best business model actually is. I’m Rick Horrow.