You gotta love Liberty Media chief John Malone, one of the original cable cowboys who took the then-fledgling technology to the masses in the U.S. and around the world. Malone has a bee in his bonnet (well, several, actually, but more on that later): The rising costs of sports programming, which, he told CNBC, has created an “unsustainable model†that is “getting too expensive for too many households.â€
Consider: About half of the typical pay-TV bill is for sports programming, and it’s got the potential to get far worse. News Corp., which is planning to launch a national service, owns some 20 regional sports networks and its Fox Sports last year acquired a 49 percent stake in YES Network, which has the rights to broadcasts of the New York Yankees through 2042. The deal allows Fox to take 80% control after three years… subscribers had better get ready to start digging a little deeper into their pockets.
This isn’t a new position for Malone. He initially expressed his concern back in November: “We’ve got runaway sports rights, runaway sports salaries and what is essentially a high tax on a lot of households that don’t have a lot of interest in sports. The consumer is really getting squeezed, as is the cable operator.”
How bad has it become? While Malone is, and always has been, a strong proponent of laissez-faire, in the case of sports programming, he said “the only way it is going to change in the short run is for government to intervene.â€
Ouch.
Malone isn’t likely to be the answer to beleaguered pay-TV subscribers looking for a deal on their bills–he is, after all, a cable guy from way back, a member of what he jokingly (he is joking, right?) calls the cable mafia.
But he does offer some hope in the indications that he believes the current model is broken. And, with financial stakes in content providers like the Atlanta Braves, Time Warner, Viacom and a piece of Time Warner Cable, Charter Communications and now U.K. cable giant Virgin Media (a deal the EU green lighted today making Liberty Global the largest pay-TV operator in the world),
While it’s unlikely that any of the properties Malone has interests in will unveil à la carte programming in the very near future, it can’t be totally dismissed. For starters, Malone believes that sports programming has to go on a separate tier (as Verizon is trialing), or be offered to the consumer wholesale, or risk totally disrupting the cable ecosystem. And he’s looking to unlikely partners to be part of that solution: OTT companies like Netflix and Hulu, and that could create a whole new array of opportunity in that space.
Jim O’Neill is Vice President, New Media at Radi8 Creative. He previously was editor of FierceIPTV and FierceOnlineVideo, and an analyst focusing on new media at Parks Associates.
