ACA Slams ESPN 'Monday Night Football' Deal

Says price boost will send sports cost into stratosphere

By John Eggerton -- Broadcasting & Cable, 9/9/2011 2:11:23 PM

American Cable Association President Matt Polka Friday slammed ESPN's new 8-year, approximately $15 billion deal to renew Monday Night Football, saying it will push cost of pay-TV "into the stratosphere."

ACA has long opined about the impact of ESPN's cost on the rising price of cable and satellite. "Evidently, ESPN is pleased to be known as the worldwide leader of hyper-inflationary price hikes. Pardon the interruption, but that's just not cricket," said Polka.

Separately, Bernstein Research analyst Craig Moffett also talked Friday about the possible impact of a deal whose cost he said was 70% higher than the current ESPN MNF contract. Moffett said that while ESPN and ESPN2 account for almost 20% of the wholesale cost of pay-TV, they account for less than 2.5% of viewership.

He says the figure for sports' percentage of cable bills is closer to 40% when other nets like Golf Channel, NBC Sports, NFL Net and regional sports nets are figured in, and over 50% when allocating sports to the price of some nets like TNT and USA that carry some sports, or a portion of retrans fees for broadcast affiliates whose network sports programming is considered must-have.

"We've all heard the rationalizations for why sports programming is so pricey," he writes in an advisory to investors."It's real time (no ad skipping!). Its fan base is incredibly passionate. It supports a huge ad load. It attracts the elusive 18-25 year old male audience. And, of course, it's not available on Netflix. Still, sports programming doesn't come close to representing half of all viewership. In short, sports fans are overwhelmingly being subsidized by non-sports fans."

Moffett said the cost for ESPN could push that percentage higher if DISH balked at the increase, dropped the channel and ESPN's cost was spread over 14 million fewer subs.

"As we've stated, there is no NFL surcharge in our affiliation agreements," said ESPN in response. "We have long-term deals with our operators and ESPN does not set retail pricing. No one does more to drive our affiliate's business than ESPN. ACA's statement does nothing to support the extraordinary value that the industry affords consumers."