SBJ/December 20 - 26, 1999/No Topic Name

Satellite TV rides sports wave

Sports has been very, very good to satellite TV operators this year.

The two main direct-broadcast satellite providers, DirecTV Inc. and EchoStar Communications Corp., which operated The Dish Network, will rake in more than $311 million in gross revenue this year from nearly 2.5 million season subscriptions to sports-league packages, according to the Carmel Group, a satellite TV financial advisory firm. Making the first real estimates about the popularity of sports packages, the Carmel Group predicts that these rapidly proliferating pro and college offerings will boost the two companies' combined net revenue by $62 million in 1999.

More important, the premium sports packages are helping the DBS players to sell more satellite dishes and differentiate themselves from rival cable TV operators, who usually can't offer as many games because they have fewer channels to carry them. In its recent report, for instance, the Carmel Group notes that DirecTV makes heavy use of its exclusive NFL Sunday Ticket package to promote its overall service to consumers.

"The main benefit of sports packages is their powerful marketing value," the consulting group says in its report. "Sports packages, especially the NFL Sunday Ticket, are hooks to get consumers to buy [satellite TV] reception hardware and to order premium programming packages."

There are about 11 million U.S. DBS subscribers vs. 65 million cable customers.

NFL Sunday Ticket, by far the most popular premium sports package, has nearly 750,000 subscribers on DirecTV, the only service that offers it, and will produce more than a third of the revenue this year. The Carmel Group projects that the NFL season package, which offers customers all out-of-market games for about $150 a year, will generate more than $112 million in gross revenue and $22.4 million in net revenue by year's end.

Despite last year's crippling player lockout, which cut the pro basketball season nearly in half, the $160 NBA League Pass package runs a solid second to NFL Sunday Ticket, besting both baseball's MLB Extra Innings package and hockey's NHL Center Ice offering. NBA League Pass will end 1999 with almost 420,000 subscribers, generating more than $67.1 million in gross revenue and $13.4 million in net revenue, the Carmel Group says.

The lower-priced baseball and hockey season packages rank third and fourth with 335,600 and 251,700 subscribers, respectively. Then come ESPN's college football and college basketball groupings of games, followed by the packages for Major League Soccer and the WNBA.

Most of the subscription revenue is flowing into DirecTV, the satellite TV leader with 7.8 million customers. Carrying all eight premium packages, DirecTV will sell slightly more than 2 million sports subscriptions this year and gross close to $300 million, the consulting group forecasts.

The Dish Network has 131,000 subscriptions for the college football and college basketball packages. Primestar, owned by DirecTV, has the rest of the DBS sports-package subscribers, about 304,000. It carries all the packages except NFL Sunday Ticket.

Down the road, the Carmel Group projects that DirecTV and EchoStar together will sell up to 5.23 million packages a year by 2003, generating $663 million in gross revenue and $132 million in net revenue. Even though cable operators are finally starting to offer some of the same packages on their upgraded systems, analysts believe the two satellite companies will simply boost their sports promotion efforts to offset the competition.

NFL Sunday Ticket is projected to remain the most popular package over the next four years. The Carmel Group predicts that the football package will produce $53.7 million in net revenue by 2003, about double the $26 million that NBA League Pass will generate.

Alan Breznick is a writer in Washington, D.C.

Sports package
1999 subscriptions
1999 net revenue
2003 projected net revenue
NFL Sunday Ticket
$22.41 million
$53.66 million
NBA League Pass
$13.42 million
$26.02 million
MLB Extra Innings
$8.73 million
$16.91 million
NHL Center Ice
$6.54 million
$12.68 million
ESPN Full Court
$4.44 million
$9.53 million
ESPN GamePlan
$3.97 million
$8.53 million
MLS/ESPN Shootout
$2.18 million
$4.23 million
WNBA Season Pass
$1.14 million
Source: Carmel Group
Return to top

Related Topics:


Video Powered By - Castfire CMS Powered By - Sitecore

Report a Bug