Los Angeles -- Cable operators will continue to experience
high licensing fees for national and regional sports networks as the overall cost of
sports continues to rise, according to a panel of sports executives.
Panelists speaking at a Western Show session here last week
said the cycle of increasing sports salaries, team television rights and cable-network
licensing fees will continue as long as teams remain financially viable and fans continue
to support the product.
"We're in the beginning of the middle of rising
sports costs, not at the beginning of the end," Tickets.com Inc. executive vice
president Andy Dolich said. "Until you have team bankruptcies and fan revolts, things
will remain the same."
The growth of Internet-based companies has provided the
sports business with new advertisers and sponsors that will continue to increase the value
of sports properties, further increasing the cost of acquiring sports-television rights.
"I think we will see the dot-com networks eventually
competing for local [television] rights, and I see the Internet as another source of
competition [for the regional sports networks]," Bortz Media & Sports Group
senior vice president Mark Wyche said.
Executives said such increases will ultimately trickle down
to operators in the form of even higher sports-licensing fees.
Comcast SportsNet CEO Jack Williams said the high costs of
sports networks are justified, given the ratings, advertising and overall awareness such
networks provide operators.
Yet newly named EchoStar Communications Corp. vice
president of programming Jedd Palmer said the costs of regional and national sports
networks would eventually force such programming to tiers so that nonsports viewers
won't have to pay for programming they don't want.
"There will be a tremendous sentiment for sports-only
packages to appeal to those customers who want sports," Palmer added.
Fox Sports Networks CEO Bob Thompson and Wyche suggested
that by tiering regional sports networks, cable would risk losing consumers to alternative
distribution companies that would offer such networks in their basic packages.
"The DBS [direct-broadcast satellite] companies and
the phone companies would jump right in and try to increase their [subscriber base],"