At Sports On Earth, Patrick Hruby writes about the insane pricing that drives sports on cable television:
Here’s how it works: About 100 million households that get pay television also get ESPN (and in many cases, some or all of its spinoff networks) as part of their basic cable package. According to SNL Kagan and Barclays Capital estimates cited by the Milwaukee Journal-Sentinel, ESPN charges cable and satellite companies a monthly $5.06 affiliate fee per subscriber. (The spinoffs cost extra: ESPN2, for instance, has a monthly $0.67 affiliate fee.) Do a bit of quick math — 100 million subscribers x $5.06 affiliate fee x 12 months — and voila, you’ve just surpassed a cool $6 billion. Much of that coming from suckers consumers who neither use nor care about your product, a business model that New York Times writer Adam Davison calls “one of the most clever in our modern economy,” others call a “sports tax” and the rest of the athletic world is rushing to cash in on.