Who'll pay for NASCAR's big deal with NBC? Viewers
And that includes folks who would never watch a single race. That's the name of the game in sports broadcasting.
The Peacock Network's deal represents as much as a 50% increase over NASCAR's existing agreement with Disney's (DIS) ESPN that had lasted for 25 years, according to Advertising Age. Details of the contract, which runs from 2015 to 2024, were not disclosed. The trade journal quotes an ESPN executive saying the price NASCAR was demanding was too steep.
Under terms of the deal, NBC gets exclusive rights to the final 20 NASCAR Sprint Cup Series races, the final 19 NASCAR Nationwide Series events and some NASCAR Regional & Touring Series events.
This is just the latest instance where media companies have paid huge premiums for sports content.
Major League Baseball will double its annual payday starting next year under a $12.4 billion contract it signed with 21st Century Fox (FOXA) and Time Warner's (TWX) TBS that runs through 2021. The National Football League is charging NBC and CBS (CBS) 63% more to broadcast games under a $28 billion contract that runs through 2022. Fees to the National Hockey League have doubled, and they've increased 20% for the National Basketball Association.
NASCAR, though, has been struggling for years. Reuters noted earlier this year that the sport still is reeling from the effects of the economic slowdown. Attendance at races has fallen as has TV viewership. The situation is so bad that NASCAR quit giving attendance figures in its race reports, leaving that up to the owners of the racetracks, which rarely divulge that information.
As The Wall Street Journal recently noted, the audience for sports is tiny, about 4% of all households, yet sports channels account for 19.5% of the fees paid by cable and satellite operators. Some operators are starting to balk at those fees, and they've found a friend in Congress.
Sen. John McCain, R-Ariz., has introduced a bill that would force cable companies to let consumers choose the channels they want to buy instead of forcing them to get those channels as part of a group. It's known as a-la-carte pricing, and cable companies are fiercely opposed to the idea.
With the average monthly cable bill before taxes now $73.44, it's no wonder that arguments for allowing consumers to pay only for the channels they watch are gaining steam.
Jonathan Berr does not own shares of the listed stocks. Follow him on Twitter @jdberr.
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