SACRAMENTO, Calif. — It's no secret, sports is a multibillion dollar industry. From merchandise to tickets and sports programming, leagues and content providers have a vast amount of avenues to make a profit.
A "To The Point with Alex Bell" viewer had an interesting question, "Why [does] it cost so much to purchase sports programming?"
Mike Palazzolo, assistant professor of marketing at UC Davis Graduate School of Management, says it comes down to the deals providers make with the leagues.
"So, the primary reason it's so challenging to watch sports, especially playoffs in particular, is that playoff games are ultimately sold to the highest bidder. Networks are generally willing to pay a large sum of money to get those contracts because they bring so many eyeballs to their network," he said.
Palazzolo says the goal at the end of the day for the sports leagues is to get as much money as they can from these contracts, and not to ensure as many people as possible can see the games.
"So to some extent, this is just a long-run consequence of market growth and fragmentation in the TV industry," said Palazzolo. "When I was growing up, there were only a few networks that really had drawing power. As a result, they got the vast majority of eyeballs, they had the most money to spend."
He says 10 to 20 years ago there were really only a few places for you to watch major sporting events, or just events in general.
"Now, it's much easier to find other people willing to bid for your product," he said. "Every streaming service in existence is trying to just stay alive. You know, there's a great deal of competition in the space, which benefits content creators, maybe not so much the networks themselves. So, I think to some extent or other what you're seeing with sports is just what you're seeing with everything else."
As for the future of sports programming or streaming?
"Predicting the future, especially in this space is always difficult," he said. "I think what you're seeing now is sort of like growth in the tech space, a saturation of product offerings. At some point, those are going to get whittled down or condensed ... you know, a number of companies have found themselves not making as much as they want."
Basically, he expects providers to "pull back" on their content curation or creation in a move to maintain or evolve profits.
Cost of streaming/sports programming
A quick Google search found the following options:
- YouTube TV: $72.99 a month
- Dish's America's Top 200: $99.99 a month
- DirecTV's Ultimate: $109.99 a month
- Xfinity TV's Ultimate TV: $68.50 a month
There are also the options for league-specific programming like NBA TV, MLB. TV and the NFL Network, just to name a few.
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