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by Jim Probasco.
The debate over whether cable and satellite companies should offer
TV channels via bundles (as they do now) versus a la carte options
has a big player:
)-owned ESPN, the self-proclaimed "Worldwide Leader in Sports."
According to the
New York Times
, last year, ESPN produced 35,000 hours of programming, and that
number included half of all live athletic events televised in the
US. The ability to achieve such a feat is possible because the
network owns the broadcast rights to a huge percentage of sporting
events -- far more than it can broadcast.
ESPN has been able to secure those rights thanks to the more than
$6 billion in cable fees it collects each year from 100 million
homes. Most of that is thanks to cable bundles that require
subscribers to pay for ESPN whether they watch its channels or not.
That's why ESPN cares about the debate over whether cable and other
providers should be allowed to continue to bundle.
The landscape, however, is changing. A growing number of consumers
are turning to video streaming services like Aereo,
) Chromecast, and
) Airplay, to name a few.
In Washington, DC, thanks to the efforts of Senator John McCain, a
tireless opponent of bundling, there has been a renewed push for
legislation designed to end cable packages and institute more
viewer choice in programming. Senator Richard Blumenthal of
Connecticut, the state where ESPN headquarters are located, has now
joined McCain in his efforts.
Then there's the age-old nemesis of the marketplace: competition.
Fox Sports 1, a 24-hour network funded by Rupert Murdoch's
Twenty-First Century Fox
), arrived Aug. 17 and is widely seen as a challenger to ESPN.
ESPN, however, will not give up without a fight. According to
New York Times
, the company recently hired political and sport statistician Nate
Silver from the newspaper and brought back Keith Olbermann to host
a show on ESPN2.
National Public Radio
pointed out, thanks to bundling, anywhere from one-third to half of
consumer cable bills are paid directly to networks like
(CBS) or ESPN. The practice has become firmly entrenched in the
business landscape and is not something these companies will
One small cable provider, Ben Hooks in rural Texas, told NPR, "The
way they package everything, can you imagine if you went in to buy
a 2x6 and you had to take a 2x4 with it?" NPR likened it to taxes
saying cable fees "spread the money around."
On the other hand, some experts caution that "unbundling" could
prove costly. Investment banker, Needham & Co. said it
estimates that if bundling were eliminated, only 20 channels would
survive and networks like ESPN would cost $20 to $25 per month,
making today's estimated price of just over $5.50 pale by
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