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Sports on Television Faces Its Biggest Test

Sports programming used to be a license to print money. Even as the rest of the television business was showing signs of strain, sports seemed like a bastion of safety for media companies—the one reliable thing for which users would always be willing to pay.

But cracks are starting to appear in the foundation of that assumption.

As growing numbers of TV watchers either cut the cord entirely or opt for what cable providers like to call “skinny bundles,” ESPN’s iron grip on viewers and subscribers is being questioned in a way it never has in the past. ESPN president John Skipper maintains that cord-cutting isn’t as big a deal as some industry critics make it out to be, but the fact remains that ESPN has lost about seven million subscribers since 2013.

Other cracks in the foundation of the sports programming kingdom are showing up on a local level. New York Yankees games have been blacked out on Comcast since November because of an ongoing battle over licensing fees between the cable company and the Yankees Entertainment and Sports Network (YES), and there are other regional fights going on involving pay TV providers, such as Direct TV and SportsNet LA, the network that broadcasts Los Angeles Dodgers games.

The problem for both ESPN and smaller players like YES is that they have spent heavily over the past few years to lock up the rights to sports programming, but as cord-cutting eats into the traditional grip that sports has on the TV business, the assumptions behind those valuations are coming into question.

To read the full article visit Fortune where it was originally published

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