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SBD/December 8, 2011/Media
Chase Carey Hints News Corp. Would Oppose Putting Sports Channels On Tier
Published December 8, 2011
COSTS SOARING: In L.A., Meg James notes cable nets are "beginning to feel the pinch of dramatically higher programming costs." ESPN in '06 "spent $3.5 billion on programming for its flagship channel." Consulting firm SNL Kagan indicated that ESPN's content costs this year "have mushroomed to $5.2 billion -- a nearly 50% jump from five years ago." Meanwhile, programming expenses for TNT "have soared 55% since 2006 to $1.1 billion this year, propelled by sports rights fees for NBA and NCAA basketball as well as a lineup of original dramas." Programming expenses for Versus "have expanded 120% from 2006 levels, in large part because of a recent $200-million-a-year deal" with the NHL. ESPN's programming expenses "soon will soar even more." The net in two years will begin paying the NFL "$1.9 billion a year for professional football -- a 72% increase over the network's current fee." That is "part of the reason ESPN, with its pricey lineup of sports properties, has a lower cash flow margin of about 25%." The media industry "is bracing for the next big hit as CBS, Fox and NBC negotiate their new NFL deals" (L.A. TIMES, 12/8).