What factors led cable giant ESPN to outbid FOX for the television rights to the post-season BCS games? In a word, they have different revenue streams; two-part pricing if you will. Richard Sandomir investigates:
ESPN cannot ignore the deep recession’s impact on advertising. But its subscriber revenue gives it an extraordinary cushion. ESPN charges cable and satellite operators an average of $3.65 a month per subscriber, the most in television, according to SNL Kagan, a research organization. Multiply that by 98 million subscribers, over 12 months a year, and ESPN’s financial armor adds up to $4.3 billion.
...Despite ESPN’s billions in subscriber fees, Skipper said that each deal must stand on its own. “It isn’t sitting in a pile in a drawer where I can reach in and use it,” he said.
Perhaps this is a sign of the "post-consumer economy." 😉 If sports media is weaned off advertising revenue in the long run, would that not be a very good thing for those who enjoy the games?