A broken business model is now on full display.
For decades, professional sports leagues fleeced cable and satellite companies with exorbitant fees because the broadcasters were able to pass along the costs to all customers, including those that neither wanted nor watched sports programming.
The transition to streaming has exposed that racket — and is making sports prohibitively expensive for all but the most die-hard fans.
YouTube TV, which acquired the rights to the NFL Sunday Ticket package last year, says it will charge significantly more for the games than previous license holder DirecTV.
Sunday Ticket will cost $349 a year for subscribers who also pony up $73 monthly for YouTube TV’s base service plan.
If you want football without the service’s other offerings, that’ll run $449 annually.
YouTube, a Google subsidiary, is paying a reported $2 billion a year for rights to Sunday Ticket. DirecTV paid a reported $1.5 billion.
In the past, as noted above, sky-high costs for sports could be amortized by spreading them among all subscribers, regardless of whether they ever watched games.
Streaming doesn’t offer broadcasters the same flexibility.
In fact, most streamers are losing money at the moment. So they wouldn’t dare alienate potential subscribers with wildly overpriced, unwanted content.
As a result, YouTube TV has to offset its investment with staggering fees, which probably will be unaffordable for many fans.
This is not sustainable. And something will have to give.
The natural remedy would be for sports leagues to be less greedy and to charge fair prices for broadcasting rights. But don’t hold your breath.
That means we’ll see more streamers inflicting painful costs on sports fans until there’s a rebellion and subscriptions get canceled.
To cushion the blow, YouTube says it will provide a $100 discount to anyone who signs up for Sunday Ticket before June 6.
But that’s not a solution. It’s a bait and switch.
As a business, professional sports are pricing themselves out of the market. That’s not a smart play.
