Category Archives: TV Business

The potential of the American Sports Network

The Sinclair Broadcast Group is representative of everything wrong with broadcasting in the new millennium. During the 00′s they became notorious for repeatedly airing “documentaries” on their stations that were hit pieces on Democratic figures and causes, most notoriously one on the Swift Boat accusations against John Kerry in 2004. Even before that they were a dirty word in media consolidation circles for their use of shell companies to circumvent FCC rules prohibiting owning more than one station in a market (and later, owning more than two in a large market). Recently, they’ve gone on an acquisition binge, including DC-based Allbritton and Seattle-based Fisher, that has them bumping up against another FCC limit: if the FCC goes forward with eliminating the “UHF discount” (counting UHF stations as only half their market value against the national cap) Sinclair will be bumping up against the limit in a way that the companies owning the stations in the largest markets – and who also own the very networks Sinclair is affiliated with – will not be.

But Sinclair’s market power also gives it considerable influence over the future direction of the broadcast industry. And in that light, today’s announcement of the American Sports Network, or ASN, fits so perfectly into the framework I laid out a year ago that I can’t help but wonder whether someone at Sinclair read the version of that post I put on RabbitEars.info. Assuming it’s not so dependent on retransmission consent revenue that it results in Sinclair undermining their own nominal means of distribution, it could well be the key to the broadcast industry’s turning around its fortunes. And though it launches with only five mid-to-low-tier college conferences on board (only one of which plays FBS football), it could well prove to have a better shot at running down ESPN than any other player that has come along so far.

ASN will initially be distributed primarily across Sinclair’s CW and MyNetworkTV affiliates, and on digital subchannels on Sinclair’s other stations. The press release also mentions that “other broadcasters” are interested in airing ASN content as well. This makes me wonder whether Sinclair’s long-term plan is to turn ASN into a potential replacement for the CW and/or MyNet, especially in light of yesterday’s news of Fox’s attempt to buy Time Warner, which would have given them half-control of the CW and likely resulted in either the CW turning into CBS’ version of MyNet or the closing of MyNet entirely (and especially if they throw in Ring of Honor wrestling). The press release also mentions the potential launch of “new cable networks and digital platforms” surrounding ASN content, pending securing agreements with cable providers – which could refer to an aspect of what I had in mind last year I didn’t dare mention or even hint at, which would allow ASN, were they to set their sights much, much higher than the likes of Conference USA, to avoid the pitfalls that were the downfall of Fox Sports Net.

Throughout the 90s, many people felt that the collection of regional sports networks across the country, including the majority of them operating under the SportsChannel and Prime names, were they to join together as a single force, could put together a sports empire rivaling ESPN, given their distribution advantages and the attractive programming from local teams they could offer. But when Rupert Murdoch bought the SportsChannel and Prime networks with an eye to doing just that, the very thing that looked like so much of an asset proved to be FSN’s undoing. Any national programming FSN had was prone to being pre-empted for local teams’ games, which meant any entity with a national programming arrangement with FSN automatically had a worse deal than if they were with anyone else (something then-Pac-10 fans especially chafed at in the early-to-mid-00′s), and any national studio shows couldn’t count on a consistent time slot or even consistently airing at all. (I remember how upset I was when the Mariners played an East Coast game that pre-empted “I, Max”, the show Max Kellerman got from FSN upon leaving ESPN, entirely.) Now the rise of the RSN owned by the team playing on it, coupled with the rise of Comcast as an RSN player and aided by Fox’s own actions, has taken Fox’s once-complete hegemony over the RSN marketplace and greatly dismantled it.

Suppose Sinclair were to sign up a much bigger array of content for ASN – major professional sports and major college conferences, maybe some top mid-majors as well – and signed up affiliates from all over the country. And suppose they then launched a cable channel that amounted to an ASN national feed, taking content from their various rights deals and distributing them to a national audience. Sinclair could offer certain ASN programming “nationally” to various ASN stations, but even if that programming were to be rejected or pre-empted for something of local import, Sinclair could simply stick it on the ASN national feed, ensuring truly national distribution for the biggest content Sinclair has. Sinclair could then have an alternate feed to stick on other programming in markets where the main ASN game is airing on the local ASN station. In effect, rather than being inferior to any cable network with decent national distribution, being on the ASN national feed would be a sort of hybrid between being on a national broadcast network and being on an ESPN knockoff.

For ASN to really reach its potential, the FCC (and Congress) would need to fix the broken economics of the broadcast business, where broadcast stations and networks must either embrace the retransmission consent regime and thus see themselves as cable networks first and foremost, or inexorably lose programming to actual cable networks with their decided monetary advantages. Depending on how it’s done, and how the Internet shakes up the live video marketplace, it could completely upend the competitive landscape and destroy the potential of most of the ideas (not to mention the metaphors) in the previous paragraph. But if it happens, here’s the blueprint I would have for ASN to succeed where FSN failed and for the broadcast industry in general to bounce back from the point where its own nominal guardians have turned against it:

  • Convince teams, leagues, and conferences that between the FCC’s reforms and the impact of the Internet, the cable network market is badly oversaturated, and given the superiority of the technology of broadcasting (leaving aside the economics and regulatory landscape surrounding it), the regional sports network and league- and conference-owned network, though in better shape than most cable networks, is a bad way to go, especially considering the bitter carriage disputes surrounding them. Convince stations around the country of the same thing and that whatever obstacles they may face in the short term will be outweighed in the long term by eliminating one of the biggest barriers left to widespread cord-cutting.
  • Offer to negotiate on behalf of every English-language general-entertainment station not associated with one of the major networks (or a network seriously trying to be one of the major networks), not just ASN stations. Then make a deal with the leagues: so long as there are stations available, every game of a team that claims a given market will be televised, but any game there’s not enough stations for cannot be blacked out on the out-of-market package. This may take the form of an NFL-esque deal where ASN handles the distribution of every team’s game not on a non-ASN national platform. This is especially important for baseball, but allowing the ASN national feed to take content from any station allows the national feed to take content from any team or conference it wants without tipping the scale in negotiations towards ASN stations. (Some side notes: first, “digital subchannels” are a failure and I don’t see them surviving the upcoming FCC-mandated auction and repack; otherwise the ASN national feed might be one. Second, this would be largely dependent on CBS and Fox being open to aiding something that might take a bite out of their main networks in order to maximize the number of stations available in the largest markets; if they aren’t, the FCC might have to repeal or severely tighten the duopoly rules, which could leave Sinclair unable to run ASN. Third, the borders between conferences are blurry enough now that many areas may be within the sphere of influence of multiple conferences, so it may not be possible for ASN to handle them all alone; fortunately, more markets than you think have at least two stations of the type I discuss here even with a fifth network, especially if you count the enigmatic Ion network. And fourth, every game is more than any station has ever showed in a non-NFL professional sport, but in retrospect that practice merely opened the door for the RSN to walk in and undermine independent broadcasters, at least sooner than it could have.)
  • The existence of the ASN national feed and rise of the Internet may obviate the need for league-owned networks. Some college conferences (namely the SEC and Big Ten) may be confident of their ability to keep their conference networks going even under the new economics, given the passion of their fanbases. To counter this, export the conferences you do have to the entire country. You don’t have to give national distribution to every single conference, but if most of SEC and Big Ten territory can get ACC or Big 12 games for free (and hopefully, without needing a kludge to get them on a mobile device), and can’t do the same with the SEC and Big Ten, it could put a big scare into the both of them.
  • Don’t get involved with the NFL unless it falls in your lap, then snap it up in a heartbeat. Some of your stations are probably going to show NFL preseason games and cable-game simulcasts without your help.

The end result could be a landscape where only two cable sports networks are left: ESPN and the ASN national feed (assuming cable networks themselves still exist as we know them once the Internet is done with them). Things that don’t fit the local team-sports framework like NASCAR and golf would probably go to ESPN, and ESPN would probably still have important maj0r-league pro sports games, but events like the college football national championship game would abandon ship and return to major broadcast networks where they belong, and ASN’s combination of national distribution and local broadcast stations could give it a significant advantage in any negotiations, and they could find themselves in possession of important MLB, NBA, and – perhaps especially – NHL playoff games.

Is this a bit of a utopian pipe dream? Sure – this is the sort of idle imagining I spend way too much of my free time on and then am hesitant to put on the blog because it has so little relation to reality. This one, though, has just enough relation to reality to be an enticing vision for those that believe in broadcast television – and sometimes, a concrete yet distant vision is just what’s needed to be the impetus for change. If the future of broadcast television lies in live sports, this may be the first, halting acknowledgement of that fact – and the start of broadcast television’s comeback. The only problem is, is it too late?

Does Sports Explain Why Fox Wanted to Buy Time Warner?

We’re coming up on the one-year anniversary of the launch of Fox Sports 1, and despite what the people in charge have said publicly, it has to be considered a big disappointment. The most-watched programming on the channel tends to be NASCAR-related… most of which the channel already had when it was Speed, and even if it doesn’t tends to appeal mostly to people who already knew where Speed was. Except for NASCAR programming, the gap between Fox Sports 1 and ESPN has been cavernous, with FS1 even unable to catch ESPN2 and struggling to pull away from NBCSN, and despite public appeals for patience the fact that FS1 has cancelled most of its launch lineup suggests the internal attitude is something else (especially with Fox offering make-goods to FS1 advertisers on the World Series). Other than NASCAR, the channel’s brightest spots so far are probably UFC and college football, and a) UFC programming has tanked relative to the same shows on FX and ratings for college football and basketball games are generally way behind games with similar appeal on ESPN or ESPN2 and b) they haven’t had very good retention for Fox Sports Live (something NASCAR has oddly been better at). Fox’s hopes are now pinned on the baseball playoffs to further bump up FS1 ratings, and after that Fox will be hoping the World Cup and US Open golf help FS1 more than FS1 hurts them (and the World Cup is the sort of short-run event programming that is likely to bump it up in the short term but have little long-term effect, as the Olympics has for NBCSN). If Fox were to pick up Big Ten rights it would be a big help, but they’re also making a long-shot run at NBA rights – possibly in addition to ESPN and Turner rather than replacing one of them. Fox’s biggest short-term sustainable boost they have to look forward to is probably NASCAR rights – which, besides attracting an audience already familiar with the channel when it was Speed, are uniquely unlikely to check out and are sometimes openly hostile to the rest of FS1′s “stick-and-ball” lineup.

Could this help explain why Rupert Murdoch made a run at buying Time Warner in June?

Let me be upfront that I personally would dread a merger of Fox and Time Warner that would create an absolute behemoth, place CNN under the Fox umbrella, and further degrade broadcast television by removing quite possibly the only company with the means and motivation to launch a true fifth network (but that’s another story) and, by inheriting Time Warner’s partnership in the CW, leave Fox with little motivation to keep running MyNetworkTV. (Though if that leaves Tribune to go without the CW, it might actually turn out to be the best possible outcome.) But strictly from a sports perspective, even though some people have naively wondered whether CBS and Time Warner would merge based on their partnerships on March Madness and the CW and their complementary sports assets and lack of direct competition outside premium cable channels, a Fox-Time Warner merger makes a lot more sense.

From the dawn of cable television, Turner has been a leader in sports programming, not being passed by ESPN until the 90s, and for all the talk of efforts by Fox, NBC, and others to make a run at ESPN, Turner has remained the company with the strongest assets to challenge ESPN of anyone, and TBS and TNT have remained the biggest non-ESPN sports destinations on cable, even with the impending loss of NASCAR programming and cutting back on MLB. Suppose Fox were to acquire Time Warner and move all the sports programming currently on TBS and TNT to FS1. Suddenly FS1 would have:

  • Turner’s high-profile critically-acclaimed NBA coverage, including Marv Albert and Charles Barkley, with games running all the way to the conference finals plus the NBA All-Star Game, control of NBATV as well, and a pretty good case to steal the broadcast component of the package away from ABC during the next negotiations (a potential nightmare scenario for the NHL)
  • Control over the ENTIRE MLB postseason aside from one measly wild-card game on ESPN
  • Control of much of March Madness and possibly the ability to muscle CBS out of the Tournament, keeping March Madness to itself on Fox, FS1, and some other channels (FX and/or Fox News or CNN could replace TBS or TNT; if the NCAA wasn’t willing to accept CBS Sports Network they’re unlikely to accept FS2 as is) and maybe bringing Gus Johnson back to the event that made him famous
  • The first two rounds of the PGA Championship and some auxillary coverage of the later two rounds, adding some meat to Fox’s golf-coverage bones
  • Fox would also take over HBO and its sports coverage, possibly meaning higher-profile boxing cards on FS1 and/or UFC cards on HBO

Again, I would hope this merger doesn’t happen – the general consensus is that just because Murdoch was told “no” now doesn’t mean he’s going to take that for an answer – but it wouldn’t be the first time sports was a big impetus for a larger media deal (see Comcast’s hostile takeover attempt of Disney and later actual acquisition of NBC) and would give ESPN some legitimate reason to worry about a potential challenger to their throne, something FS1 has largely failed at so far.

(The potential irony? If all proposed media deals go through, Time Warner’s former cable division could end up owned by a direct competitor.)

The 200 Most-Watched Live Events of 2013

If, as I’ve suggested, the only purpose of linear television going forward will be to show live events that many people want to watch at the same time, then ratings for live events become a particularly important category to look at, because they form the underpinning of everything else. So here are the 200 most-viewed live programs of 2013 to my knowledge, with the top 50 ranked.

Breaking news outside of primetime (which basically means outside the manhunt for the Boston Marathon bomber), and other non-primetime news events such as the funeral for Nelson Mandela, are not counted because I couldn’t find any numbers for them. I’ve also guesstimated where to put the Tournament of Roses Parade and one NFL window because viewers (or at least, reliable viewer numbers) weren’t reported for them. I also assumed all non-audition episodes of American Idol were live, but marked the Hollywood and Vegas episodes with question marks. Events in red are news events; in blue are NFL games; in green are other sports events; in orange are awards shows; in purple are reality shows; and all other events are white. Read More »

Is There a Place for Common Sense in Supreme Court Decisions?

The Supreme Court Wednesday ruled 6-3 against Aereo, declaring the start-up’s array of miniature antennas available for rent to consumers in violation of copyright law. Astoundingly, the three dissenters were Justices Scalia, Thomas, and Alito, three of the court’s more conservative members. If you had to pick one person to symbolize the modern Supreme Court’s tendency to favor moneyed interests over ordinary Americans, the law, intent of the Constitution, and precedent be damned, it would probably be Scalia, followed by Thomas, then Alito and Chief Justice Roberts neck-in-neck. I would never have expected the conservatives to actually believe what they say they do enough to stand with the consumer and the scrappy, innovative start-up at the expense of the big, multi-national conglomerates, and as much as Democratic politicians may be in bed with Hollywood, I never would have expected every last one of the liberal justices to stand with the big corporations against the ordinary American. I know President Obama’s Justice Department filed a brief supporting broadcasters, but that was widely seen as disappointing, not sadly expected; I suspect this is an issue on which the Democratic decision-makers are well out of step with their rank and file. Maybe I’m just naïve (support in Congress and opposition among the public to SOPA was, after all, largely bipartisan), but it would be hard for me to deal with it if this turned out to be an issue on which I stand with conservatives and against Democrats.

But that’s not what I want to talk about. Rather, I want to talk about the tendency for pro-Aereo corners of the blogosphere (as well as Aereo itself) to decry the decision as being obviously wrong, to gloss over the sketchier elements of what Aereo was trying to do, take its own description of it at face value, and dismiss the majority’s reasoning as the “looks-like-a-duck test“, to speak of Aereo’s setup being designed to follow the law as opposed to “going around” it as though that were more than a semantic distinction. One of the things Americans don’t like about the legal system is the tendency to create overly complicated documents written in horrendously obtuse language with no resemblance to anything ordinary Americans could recognize so that people can get off on obscure technicalities. But when the Supreme Court finally looks past the technicalities and boils things down to what they actually are, but we happen to be on the side that wanted to take advantage of those technicalities, suddenly we want the court to follow the obtuse legal language, ignore what we’re actually trying to do, and let us skirt through the loophole?

I personally felt that, while Aereo was clearly trying to take advantage of a loophole in the law, it was the place of Congress, not the Supreme Court, to close it, and it sounds like the commenters on (the very liberal) Daily Kos agree with me. But I don’t think we’re giving the position the majority accepted enough credit. Leaving aside the technicalities of how it all works, what Aereo was selling was the ability to watch broadcast television stations, regardless of whether you had the ability to view them at your current location if you had an antenna, indeed without you needing to worry about having an antenna or where it was located. You, the viewer, don’t see where Aereo’s antenna is and don’t even necessarily know anything about where Aereo is getting the signals from. All you know is that you are giving Aereo money and they are supplying you with a bunch of television channels you may or may not be able to receive otherwise. Boiled down to those facts, there really is very little difference between Aereo and basic cable service (and some of the things Aereo had said about potentially carrying cable channels didn’t really help their case).

What this shows is that our communications and copyright laws are woefully outdated and rooted in assumptions that don’t hold water, that failed to anticipate technological developments that rendered the technological distinctions encoded in the law obsolete. The entire Aereo affair had a company resorting to technological contortions to provide a fairly basic service there was a clear demand for and broadcasters being undermined by the very nature of, and wanting to be rid of, their own nominal method of delivery, their own neglect of which helped create the demand for Aereo in the first place (and while they’ve won this battle, they may ultimately lose the war). The court said that if Aereo wanted relief they should go to Congress when they should have said that to the broadcasters, not only because that would have been the right approach but because the broadcasters would likely have been more able to get that relief. But putting the onus on Aereo does give Congress incentive to clear up a regulatory framework that assumes the primacy of the obsolete technology of cable television and undermines the potential of broadcasting, while creating perverse and unintentional disincentives for maximizing the distribution of content.

Report: WGN America to Drop Chicago Sports

For at least two decades now, and certainly for the past decade-plus, Tribune Broadcasting has been an anachronism: the last relic of an age of truly local, independent broadcasters, from a time when broadcasting was so dominant that broadcast stations’ fear of cable had to do with the prospect of importing other stations from outlying markets, a time when independent broadcasting was so strong that Tribune, the owner of the dominant independent stations in its markets, didn’t affiliate them with the fledgling Fox network, leaving Fox to leave Tribune’s VHF stations behind in favor of UHF stations in markets like Chicago and Denver in a time when that still mattered. Even as its stations have affiliated with the WB and later the CW, Tribune has steadfastly avoided being identified with those networks and, especially with the CW (which, unlike the WB, it doesn’t hold an ownership stake in), has downplayed its affiliation as much as possible. In the very biggest markets, the biggest general-entertainment stations outside the Big Four networks tend to be owned by CBS, Fox… or Tribune, the one company of the group not to be a massive conglomerate, even as it has increasingly become a more standard owner of affiliates of the Big Four networks in smaller markets, especially ABC and Fox.

A big reason Tribune has managed to maintain this strange, hybrid status has been its flagship station in Chicago, WGN, and its own status as the last relic of the early days of cable, when imported “superstations” were the main distinguishing feature from standard broadcast. While Ted Turner was exporting WTBS throughout the South, Tribune was doing the same with WGN throughout the Midwest, showcasing Cubs games in much the same way TBS did Braves games. Broadcast stations were able to get “syndication exclusivity” rules passed that required any syndicated programming on imported broadcast stations that also aired on a local station to be wiped from the feed, requiring the likes of TBS and WGN to set up separate feeds to export to outlying markets, but because such rules didn’t apply to cable networks that didn’t originate as local stations it left the superstations at a substantial competitive disadvantage and helped hasten their demise.

In the case of WGN, the advent of the WB further sealed its fate; WGN was able to carry the WB on its national feed in its early years, helping that network gain traction throughout the country in areas that didn’t have a WB affiliate, but as that problem slowly waned WGN eventually dropped the WB from its national feed, meaning the national feed increasingly became very different from the local Chicago one – which ironically may have helped it keep going longer. Tribune’s relatively smaller status also may have helped; TBS divorced its national feed from its local Atlanta station once and for all once it won a national baseball contract. Eventually, the WGN national feed was renamed “WGN America” with a different logo, and the only things it had in common with the Chicago feed were the 9 PM CT news and local Chicago sports.

Now, however, Tribune has signaled its intention to turn WGN America into a more traditional cable network and is wiping the last vestiges of WGN America’s superstation status from its lineup. WGN America dropped local Chicago news earlier this year, and now Tribune CEO Peter Ligouri has told Crain’s Chicago Business that WGN America intends to drop Cubs games and other Chicago sports at the end of 2014. (The article is behind a paywall, but if you want to read a possibly-illegally-copy-pasted version that reads like it was sent through a machine translator and back again, click here.)

The continued presence of Cubs games on WGN America was yet another vestige of a bygone age. In the early days of cable, there was no MLB Extra Innings, no more than one game a week on TV nationally, and MLB had a lot fewer teams than it does now. The Braves and Cubs were able to build large regional fanbases through the exporting of WTBS and WGN. With games with national interest on TV every day of the week on ESPN, FS1, and MLB Network, Cubs games on WGN America are less special, and the continued presence on broadcast those games require means missing out on the dual revenue stream from a regional sports network.

Despite all that, this is a bit of a head-scratcher to me. Tribune seems to be trying to catch the general cable network market on a downswing, right as it reaches a tipping point and starts to decline as online services like Netflix step on its turf. The value of linear television going forward is sports, so WGN America seems to be going in the exact wrong direction; I’d be very surprised if Cubs games, even with the team sucking in recent years, would be less popular than whatever original programming WGN America tried to put on its air (how much money it makes for WGN given production costs is another matter). This is especially the case since, owing to the SyndEx rules, WGNA has rather limited distribution compared to other networks of similar vintage, and may have to renegotiate its contracts from scratch if it divorces itself from WGN in Chicago completely. I would mention that the national carriage WGNA gives the Cubs is the one big value WGN would bring to an impending renegotiation of its contract, except that this move may itself be an admission that WGN is likely to lose the contract.

Tribune is in the process of spinning off its newspapers into a separate company, leaving its broadcast stations and WGN America as the heart of the company, along with digital investments. But those stations are themselves prone to potentially suffer the same fate the newspaper industry did as the Internet stepped onto its turf, and without affiliation with a Big Four network or (with the only exceptions being WGN and WPIX in New York) a sports presence, Tribune’s legacy stations seem particularly exposed. Tribune has been run by private equity firms since its emergence from bankruptcy in 2012, and besides turning WGN America into a conventional cable network, those firms have shown every sign of running Tribune as a traditional owner of broadcast affiliates (purchasing the Local TV group, another group of stations run by private equity firms, last year), yet no company is in better position to affect the future course of the broadcast industry. I hope the people in charge of Tribune have, or at least can acquire, a mindset of the television industry of the future, not the past.

The Nexus of Television and Sports in Transition, Part IV: Pricking the Bubble

The cable business model might be the greatest scam in history, and the best part is that it’s entirely legal. It’s not merely that cable networks get to collect money from the dual revenue streams of advertising and subscriber fees. It’s that they collect subscriber fees from every single person who subscribes to cable. ESPN and ESPN2 were in about 96.2 million homes each in March. ESPN2 collects about 70 cents a subscriber, so the two of them combined take $6.24 out of your cable bill. Do the math: 96.2 million homes times $6.24 means ESPN is raking in $600 million dollars every month before it sells a single advertisement. That adds up to $7.2 billion every year from subscriber fees alone, the vast majority of ESPN’s yearly revenue – and it’s going up so fast it crossed the $7 billion threshold just last year. Not a bad chunk of change if you can get it. By contrast, TNT – which is actually in more homes at 96.9 million – is only collecting $129 million a month or $1.5 billion a year, and it wouldn’t be collecting nearly that much if it didn’t have valuable NBA inventory. The amount ESPN pays each year for Monday Night Football or even the SEC would chew up most of that amount.

These subscriber fees aren’t determined strictly by popularity; in terms of total viewership, the USA Network is actually more popular than ESPN, thanks to a combination of WWE Monday Night Raw and a collection of critically-acclaimed and popular original series. But USA collects only 71 cents a subscriber, about sixth-most in cable and roughly neck-and-neck with ESPN2, because if you drop USA you’re only pissing off a few wrestling fans and fans of a few original series, but if you drop ESPN you’re pissing off fans of just about every popular sport under the sun, including the almighty NFL – and those fans can’t live without their sports. Even so, even by the most optimistic estimates, only about 80 million of that 96.2 million watch any ESPN at all that’s taking so much of their cable bill. Far fewer, probably less than a third, would decide ESPN is so indispensable they would pay six dollars a month for it. Yet ESPN is raking in the dough from every one of those 96 million. ESPN’s certainly happy with this state of affairs, and so are its rights partners, who get to count the money from the lavish rights fees ESPN pays them. No wonder everyone else wants in on the action. But if you’re an ordinary cable subscriber, especially if you’re not a sports fan, you’re not so happy.

For several years now, many have called for the government to step in and do something about the subsidization of sports networks, and media companies have resisted those efforts mightily. The most popular idea is to force cable companies to offer their wares a la carte, allowing you to only pay for the networks you want; Senator John McCain introduced an a la carte bill last year, and the effort has attracted the support of none other than Senator Richard Blumenthal, who represents ESPN’s own home state. Media companies claim that most channels are underpriced compared to what they would receive in an a la carte world, that cable is still a good value for the vast majority of customers who would gladly pay as much as what they do now for what they do watch, and that a la carte would actually end up hurting consumers in the long term: because each network would have far fewer customers, it would need to jack up rates considerably. On average, people would end up paying the same or more for their cable than they do now and getting less for it, although sports fans would likely pay more and non-sports fans would pay less. Media companies claim the effects would be so catastrophic that the vast majority of cable networks would go out of business, especially those targeted towards minorities and underserved communities; the number of networks that would be left might be in the single digits.

You could poke several holes in that logic and point to evidence that the eventual outcome might not be quite so dire. But even if things happened exactly as the media companies say, someone with a good grasp of the overall video landscape might find reason to say: “So?”


It’d be one thing if sports fans were merely passionate enough about their sports that if a cable operator were to drop a sports network they’d leave en masse. But it turns out sports fans are incredibly important to the other half of cable’s dual revenue stream, advertising, as well: as said before, they are disproportionately likely to be in the male 18-49 demo, which just so happens to be the most valuable demographic to advertisers, and they’re the one type of programming that’s DVR-proof, meaning sports fans are a captive audience to actually watch the advertisements. But these two things are connected in a way that casts a long shadow over the future of the entire television industry.

Concerns over time-shifting are nothing new; the television and movie industries attempted to kill the VCR when it came out, and once VCRs caught on, sports rights already became incredibly valuable for their immunity to time-shifting, to the point that many of the same points being made over the sports rights bubble, as Deadspin pointed out, were being made in 1989 in response to CBS’ multi-million dollar baseball deal. But these days, DVRs are, or at least should be, the least of television programmers’ worries, if not so much advertisers’. The biggest reason why those age 18-49 are so valuable these days is simply because they watch less television than older people, and while that has a number of reasons, the biggest is because of the rise of the Internet as a source of entertainment.

Well aware of the futility of attempting to fight piracy and the rise of YouTube, content providers have increasingly embraced the Internet as an alternative venue for their content, through sites such as Hulu and Netflix. But the Internet challenges some of the deepest assumptions of the television industry in a way few within it have recognized and, to the extent they have recognized it, they have resisted at all costs: if non-live programming can be watched any time you want it, why does it need a spot on a linear television schedule at all?

Before the Internet, the only way to consume content was to watch it when someone else told you it was on, unless you rented a video from the video store. You visited the movie theater when they decided the movie was going to start; you watched a program at the time the broadcast station or cable network scheduled it for. Each television station or network, even with the increased capacity of cable, had to be assigned a certain portion of spectrum, a channel, that could be used to show one piece of video and one stream of audio at a time, so any program that wanted an audience on television had to find a channel that would show it at a particular time. But once a video is on the Internet, you can pull it up any time you want. You don’t need someone else to schedule it for you. The traditional linear television schedule is an artifact of these pre-Internet days.

It’s entirely possible the prospect of hundreds of channels falling by the wayside may end up falling on deaf ears, because we may not need hundreds of channels anymore. It’s very possible that the vast majority of programming that would find itself without a home because of the collapse of so many cable channels would be able to find a home on the Internet without a problem, though admittedly the financial infrastructure that would support that may not be in place yet. It’s even tempting to wonder if the Internet could pick up the slack even of live programming, which would render television completely obsolete.


More is at stake here than just sports. As much as the likes of CBS, Fox, and NBC may want a powerful sports network for their own sake, they also want a popular network cable companies can’t afford to drop. That way, they can force those companies to carry a bunch of other, far less popular, channels.

Just six companies own the vast majority of channels on your cable lineup. Go down the list of cable networks with the most penetration. Once it’s properly ordered, at the top of the list is the Weather Channel, which is owned by Comcast, which also owns NBC, USA, Bravo, E!, Syfy, Oxygen, the Esquire Network (formerly Style), and G4, besides NBCSN and the Golf Channel. Next is the Food Network, a relative independent owned by the E.W. Scripps Company, which still owns thirteen ABC and NBC affiliates as well as HGTV, the Travel Channel, the Cooking Channel, and DIY Network. TBS is owned by Time Warner, which also owns TNT, Cartoon Network, CNN, HLN, HBO, Cinemax, truTV, and TCM. Discovery Channel is another relative independent owned by Discovery Communications, which also owns TLC, Animal Planet, and a host of smaller networks. Nickelodeon is owned by Viacom, which also owns Comedy Central, MTV, Spike, VH1, TV Land, BET, CMT, and numerous MTV and Nick spinoffs. A&E is owned by A+E Networks, a joint venture of Disney and Hearst (split 50-50 this time) that also owns Lifetime, History, and smaller networks like Bio and H2. The Disney Channel is, of course, also owned by Disney, which besides ESPN and ESPN2 also owns ABC Family, Disney XD, and others. AMC is another relative independent owned by AMC Networks, which also owns IFC, We, and Sundance. Fox News Channel is owned by Fox, which also owns FX, the National Geographic Channel, and spinoff networks Fox Business, Nat Geo Wild, FXX, and FXM, to say nothing of Fox Sports 1 and 2.

CBS is the last of the big conglomerates, owning Showtime, TVGN, and the CBS Sports Network. The broadly-distributed commercial networks not owned by one of these companies can be counted on one hand, and most are owned by formidable corporations themselves. A cable company that wants the popular channels – ESPN, TNT, USA, Fox News, MTV, Showtime, arguably even AMC, Discovery, and Food Network – has to carry the lesser ones. The result is a situation where a cable company’s hands are tied as much as the consumer’s are.

In the same breath that they stand side by side with media companies in opposition to a la carte, cable companies also push back against the increased price of sports networks that they’re stiffed with and left to pass on to consumers, thus either losing customers or taking less profits. They’ve been working to roll back the sports subsidy as much as they can. As far back in 2011 the president of Dish Network raised the prospect of some company deciding to go without sports programming entirely and market itself as a low-price service for non-sports fans. These days, DirecTV has started imposing a $3 fee to customers in markets with multiple regional sports networks, and multiple companies have experimented with offering sports-free packages to customers.

Those sports-free packages haven’t achieved much penetration, though, in large part because the contracts sports networks have with cable companies guarantee them a certain level of penetration, and cable companies can’t risk accidentally breaking those contracts. Moreover, the bundle works both ways: cable operators may be stuck taking lesser networks if they want ESPN, but they also can’t just drop ESPN without dropping other channels like the Disney Channel, and that means people who might not otherwise have an interest in sports suddenly have their kids pestering them to get the Disney Channel back. In turn, the contracts cable networks have with leagues and especially conferences require them to have a certain level of penetration.

And because of this, even the relatively modest advent of the sports-free package has the potential to completely pop the sports cable bubble. ESPN only has the rights to the new college football playoff because it happens to be in the vast majority of households. How many leagues and conferences would bail on ESPN once people start electing not to pay for it en masse, leaving only sports fans still getting it? How many sports would be willing to risk completely shutting out the casual fan? Considering how few sports went the way of boxing, with all the top-caliber fights on pay-per-view and the remaining fights of any consequence on premium networks like HBO, the answer may not be something any of the programmers of sports networks would like.


There is one way to collect ESPN-type money, at least on a per capita basis, in cable. That’s to run a regional sports network airing the games of local MLB, NBA, and NHL teams. $2.50 is the baseline subscriber fee in the regional sports business, and more than a few charge north of $3; some even dare to demand more than what the mighty ESPN charges. As a result, teams have benefitted from the sports rights bubble as much as larger leagues and conferences – especially in baseball.

When the New York Yankees founded the YES Network in 2002, it was a milestone in the history of baseball. Under Bud Selig’s tenure as commissioner, baseball has attempted to even out the imbalance between the “haves” and the “have-nots” without instituting a salary cap by means of various revenue sharing schemes. The Yankees are indisputably one of the “haves”; in fact, after one luxury tax went into effect, the Yankees were the only team in all of baseball to be affected by it. The Yankees collected a rights fee from YES like from any other RSN, but it also owned a sizable chunk of the network itself – and the money it raked in from the network’s profits, unlike the rights fee, wasn’t subject to baseball’s revenue sharing. In a sport without a salary cap, that loophole was huge for the Yankees to maintain its spot atop the heap.

The rest of baseball took notice, and these days, it seems like if you pick a baseball team at random they probably own an RSN – even some of the more unlikely ones, like the Cleveland Indians who sold their SportsTime Ohio network to Fox last year. After purchasing the SportsChannel and Prime networks in the 1990s, Fox had attained a near-monopoly in the RSN business and attempted to mount a challenge to ESPN with them using the overall branding of “Fox Sports Net”; it failed, but Fox still had a lucrative revenue stream and a lofty position it would be hard to knock them off from. That is, until Comcast began offering teams equity stakes in its networks – the Cubs, White Sox, and other Chicago teams, the Mets in New York, various other MLB and NBA teams elsewhere. Fox had long resisted offering teams equity stakes in its networks, but eventually decided it had to offer such stakes to the Angels and Rangers to keep them in the family. Meanwhile, Time Warner Cable, after years of messy disputes with regional sports networks, decided to get in on the lucrative business themselves and launched new networks with the Lakers and Dodgers.

Yet it may also be here that the sports rights bubble is already starting to burst, specifically in the heart of Texas. Comcast recently convinced the Astros and Rockets to leave Fox and start a new regional sports network they would own a stake in, giving Comcast an effective monopoly over the Houston sports market. A year later, the network is largely considered a disaster and a laughingstock, failing to pick up carriage agreements with any cable companies other than Comcast, putting it in less than half of Houston-area households, not helped by the Astros being a laughingstock themselves as the worst team in baseball. The network has declared bankruptcy, and the Astros have accused the bankruptcy proceeding as a way for Comcast to keep the Astros from pulling out of the arrangement. If the Astros or Rockets can put good, attractive teams on the field things might start looking up for CSN Houston, as New York’s MSG learned in 2012 when Jeremy Lin caught fire for the Knicks as MSG was in the middle of a heated carriage dispute with Time Warner Cable, forcing TWC to abruptly end the dispute. That may help explain why the Rockets signed Lin that offseason. But a playoff Rockets team with multiple stars hasn’t been enough to boost its RSN, at least not yet.

Across the state, the University of Texas’ attempt to bring the RSN to college sports, the Longhorn Network, has similarly struggled to pick up carriage agreements and has also been considered a laughingstock. Pushback may be spreading outside of the Lone Star State: Time Warner Cable’s LA-area networks have struggled to pick up distribution, with the Dodgers network basically unavailable to any providers that aren’t Time Warner, to the point that the Dodgers’ own legendary announcer, DirecTV customer Vin Scully, can’t get the network in his own home. For teams across the country, the money train may be running out, and cases like these may increasingly become a cautionary tale.


There is an unassuming warehouse in Brooklyn housing something that media companies are completely panicked over: thousands of teeny-tiny little television antennas. These antennas belong to a startup called Aereo, founded by mogul Barry Diller, who once helped the Fox network get off the ground and who is now – so the broadcasters, including the network he helped launch, claim – completely destroying the foundation of their business. Aereo charges customers in the New York area, and a growing list of other places, $8 a month to rent one of its tiny antennas. With those antennas, you can watch any broadcast channel you like over the Internet and even record up to 20 hours of programming using Aereo’s DVRs. And broadcasters are apoplectic about it.

They’re apoplectic because the once-fledgling retransmission consent program, created to level the playing field and allow broadcasters their own piece of cable networks’ dual revenue stream so that broadcasting could survive the rise of cable, has now completely warped their incentives and made it so that broadcasters would be first to destroy it themselves in order to save it, so they could place all their programming on cable and collect retransmission consent fees from all their customers. Literally: multiple national networks, including CBS, Fox, and Univision, have floated the possibility of pulling their programming off the free airwaves if they don’t win their court challenges against Aereo. The courts have so far yet to make any actual ruling on the matter, but for the most part have refused to grant the broadcasters’ requests for injunctions against the service. That in itself is too much for broadcasters to bear: they’ve gone so far as to ask the Supreme Court to weigh in on the matter, again before any lower court has actually come down with an actual answer.

To be perfectly honest, I wouldn’t be surprised if Aereo ultimately loses the court challenges against it, and I’m not even sure it should prevail even if it might be on the right side legally; Aereo’s claim that they’re simply making it easier for consumers to use an antenna to pick up the free over-the-air broadcast signals they’re entitled to anyway seems somewhat chintzy and getting off on a technicality, and even if they do ultimately prevail in the courts I wouldn’t be surprised if Congress closed the loophole shortly thereafter. In fact, Diller may not actually be interested in Aereo’s success in and of itself so much as pushing broadcasters to change their business model to one more based around the Internet, if his comments to the Wall Street Journal are anything to go on. But even if we took Aereo’s claims at face value, there seems to be a question that has been insufficiently explored: why is Aereo necessary to begin with? Why would someone sign up for Aereo instead of simply putting up an antenna themselves and watching TV that way?


There are several answers to that question, starting with the fairly basic one regarding the hassle of putting up an antenna at one’s house – especially when they often need to be oriented towards wherever the signals are coming from, which ordinary people can’t be expected to know, and beyond a fairly short distance away retrieving said signal requires more than just rabbit ears, but a huge rooftop antenna, which unlike satellite dishes with a similar footprint and restriction you probably won’t find anyone who’ll install it for you. Then there’s the DVR access you get with the Aereo fee, which can be especially important when most cable and satellite subscribers get their DVR service from their cable or satellite provider. But perhaps the one that is, if not most important, certainly the most telling, is mobility: the ability to connect to your Aereo antenna from any device, including your computer, tablet, or smartphone.

The DVR question is not prohibitive – it certainly is possible to get a DVR that will record straight from an antenna, though the options are limited – but the other two raise questions about the nature of the digital transition that America’s broadcasters went through in 2009. Digital signals are all-or-nothing – no ghostly, static-filled images anymore – and many areas that could have once gotten at least the latter from a set of rabbit-ears now appear to be out of luck. But the more serious issue is the lack of mobility – and it goes beyond the new digital standard failing to anticipate technologies that didn’t exist yet at the time it was adopted.

The digital transition may have actually killed off the existing market for battery-powered portable TVs – interference makes it impossible to watch an unmodified digital signal while on the move. The digital standard is thus ill-suited to be watched on anything other than a typical, stationary TV – thus not merely failing to anticipate, but actually becoming less well-prepared for, mobility becoming the new watchword among consumers. It is actually harder to watch digital television “anytime, anywhere” than it was to watch an analog signal.

To some extent, the broadcasting industry has recognized this, adopting an addendum to the digital standard that allows them to send a second signal that achieves an interference-free mobile picture by sacrificing picture quality, resulting in an image suited for smaller smartphone screens. (The portable TV market is still thriving in Europe in part because their DVB standard included a similar addendum from the start.) But even this shows the relative neglect America’s broadcast television infrastructure has fallen into without the general public making use of it and without anyone having much of a financial interest in promoting and maintaining it; not only have you not heard of it, the vast majority of devices don’t support it natively, requiring you to plug in an antenna dongle, and of the largest network stations in the New York area – the epicenter of the Aereo controversy – only three transmit mobile feeds: the NBC, Telemundo, and surprisingly, Fox stations.


If a la carte isn’t coming down the pike and a sports-free package isn’t coming to a cable system near you, there is still another way for consumers to take control of all the money being siphoned off their cable bill to pay for ESPN: cut the cord entirely. Services like Netflix and Hulu make it increasingly easy to watch the shows you want whenever you want, regardless of whether you have a cable subscription. Long feared by media and cable companies, it’s becoming a growing reality: nearly 900,000 people cut the cord in the past year, more than doubling the number the previous year, according to one analysis – and for all their problems, deals like the recent one between Comcast and Netflix could help build a network robust enough to make buffering a thing of the past and make the online streaming experience closer to on par with cable TV, which could accelerate cord-cutting (or at least “cord-shaving”) even further. And media companies are putting as many roadblocks in its way as they can.

Media companies want the Internet to work for them, not against them, but the way they tend to do so is to keep people tethered to their cable company – and thus, to the cable bundle and their millions in subscriber fees – as much as possible. The future they see is termed “TV Everywhere”, and it allows you to watch the shows you want to watch not just on your TV, but on your computer, tablet, or smartphone – so long as you “authenticate” with a participating cable provider. In the case of services such as HBO GO, this includes the ability to watch popular shows like Game of Thrones and True Blood anytime you want to. HBO already operates on the a la carte business model, but so far has refused to offer HBO GO standalone to people who don’t want to subscribe to cable, although Comcast has begun offering it to customers who sign up just for its Internet service. A considerable amount of Internet-delivered video is being restricted to maintain a structure that by all rights should be becoming obsolete – and not even everyone has the future yet: until very recently only about 20 million subscribers could get ESPN’s TV Everywhere offering, WatchESPN, which ESPN president John Skipper admits is in large part “a significant measure to preserve the current system.”

Yet cord-cutting doesn’t seem to have had an associated increase in antenna viewership, at least outside of areas where Aereo has set up shop; most coverage of cord-cutting has limited its implications to Internet viewership, to the point that most cord-cutters may not even consider putting up an antenna – in fact, some might even be eagerly awaiting the demise of broadcasting, even as they benefit from it. Cord-cutting should be a boon for broadcasters who can find themselves a willfully captive audience limited to their wares and whatever is offered online, yet not only is broadcasting woefully unprepared for the demands of the modern consumer (whether cord-cutting or no), the companies with the biggest pockets in the industry are more worried about losing their retransmission consent revenue – not to mention the revenue from their lucrative cable networks – than in any way excited over what must seem like a hollow “opportunity” presented to them by cord-cutting. As a result, the general public doesn’t even understand the modern broadcast landscape very well, to the extent it’s even aware it still exists.


These are tough times for the broadcasting industry, under attack from multiple fronts to the point of seeming to be on life support, and it’s not even clear how many people would miss it if it went away. Wireless providers covet their spectrum, cable operators would love to eliminate the free competition provided by an antenna, even broadcasters themselves would love to ensure every one of their potential viewers is paying retransmission consent fees. Those that do watch broadcast television on an antenna tend to be older and poorer, pretty much the antithesis of the people those in the television industry care about.

With the traditional linear television channel seeming to be obsolete in the age of the Internet, it’s easy for even an idealist to assume broadcasters are a relic of a bygone age, hogging spectrum that could be put to more productive use. Already the federal government has set up a two-way auction, currently scheduled for 2015, allowing stations to voluntarily give up their spectrum, either going off the air entirely or sharing spectrum with another station, to auction off to the wireless carriers and take a cut of the proceeds – seemingly just a waypoint to the complete liquidation of over-the-air television spectrum. What purpose could it possibly serve that couldn’t be served by the Internet? The answer requires a good technical understanding of how the Internet works – and there is a supreme irony about the whole debate over sports and cable television waiting at the end.

When you call up a video on Netflix, or any other video service, the device you use to access it sends a message asking for the video and sends it to the ISP or wireless provider, which sends it on its way through the network to Netflix. Netflix receives the message and sends the video on its way back through the network to you. If someone else wants to watch the same video, they go through the same process, even if they’re on the same ISP. Streaming a live event works the same way: your device tells the streaming provider it wants to watch the stream, and the streaming provider sends the content of the stream back through the network to you. It does this for each and every person that wants to access the stream, again regardless of whether or not they’re on the same ISP, even though they’re watching the exact same thing at the same time, with each new person joining the stream joining at the exact same point, yet each of them watching, in effect, on their own individual “channels”.

You can imagine what the effect is when a huge number of people want to watch the same thing at the same time, and indeed NBC’s streaming coverage of the 2012 London Olympics was notorious for running into massive issues as as many as a million people tried to access it at the same time. No one has ever heard of a television channel, whether broadcast or cable, regularly freezing while it buffers or fluctuating in picture quality, or even being completely inaccessible, without thinking something was wrong with their signal or connection, yet such is often the norm when it comes to watching things online, at least in the case of a live stream. Broadcast stations send out one signal, and that signal can be received by anyone with an antenna; similarly most cable companies send out their offerings in one burst, and anyone can tune in to the sliver they want while leaving everything else for everyone else. It is infinitely scalable in a way the Internet, at least as described here, can never be.

Video puts a massive strain on the Internet; Netflix alone can make up 30 percent of an ISP’s traffic despite a very small minority of consumers actually using it, and video traffic as a whole make up a majority of all traffic on the Internet. A disproportionate amount of bandwidth is being used by visitors to a few video sites, many of which are now paying ISPs for faster transit through the network, as with the recent Comcast/Netflix deal. The amount of video people consume may well pose the single most serious threat to net neutrality, the backbone of the free and open Internet, and it will only get worse as more and more people discover the selection of video available online and as more and more video currently being consumed on linear television channels moves to the Internet. Deals like Comcast/Netflix may help capacity keep pace, but at the expense of allowing ISPs to be gatekeepers by forcing video providers to pay a tax, exactly the antithesis of what has built the Internet – including Netflix itself – into what it is today.

Considering all this, it should be apparent that anything that can take some of the video load off of the Internet as we know it today should not be dismissed out of hand, and there are some within the industry that have at least started to recognize as such. Of course this argument could apply equally to either broadcast or cable channels, but there are a couple reasons to expect broadcast to be the more important; for one, broadcasting is pretty much the only option for reaching mobile devices that can’t be connected to (or at least can’t be expected to be connected to) a cable connection (and mobile devices are no small matter; already, according to one study, people are now spending more time in front of their phones than in front of the television). Further, as was hinted at earlier when talking about how many teams and leagues would desert ESPN if it no longer reached the vast majority of homes, content providers will always seek to reach the widest possible audience, and that means reducing the amount they’ll have to pay to be part of that audience as much as possible. At the very least, there will always be demand for a YouTube of linear television as opposed to a Netflix.

Considering what advantages the Internet brings to the table to begin with, what sort of content would people be willing to watch at a particular time set by someone else? Certainly people may still want to simply turn on the TV (or whatever would fill that role) and have something on in the background while they do other things or watch a parade of thematically connected programming without having to think too much about actually picking out anything specific, but this question really boils down to, what sort of programming would benefit from the linear television model, in that it inspires a large number of people to tune in to the same thing at the exact same time? Certainly anything, including scripted programming that theoretically can be seen at any time, can inspire people to want to see it as soon as it’s available if they wish to avoid being spoiled about it on social media (or conversely if they want to take part in the conversation surrounding it), but what really inspires this sort of behavior is live programming.

And it is here that we come upon the supreme irony in all of this, because while live events can encompass a number of things such as awards shows or breaking news, the vast majority of this sort of live programming, the exact sort of programming that broadcast television is best suited for, is the same exact sports that it is increasingly being deprived of. Indeed maybe this isn’t so surprising; perhaps, for all the talk about captive audiences and DVRs and money demos, what ultimately underlies the entire rush to pour so much money into sports, all the skyrocketing contracts and subscriber fees, all the multimillion dollar contracts and abandonment of tradition and principles, all the rush to build new sports networks, is the simple, largely unacknowledged fact that sports is one of the last few things holding people to traditional linear television at all, and the fact that so much of it has benefitted cable networks is a simple reflection of the fact that cable has so far enjoyed a decided monetary advantage without much in the way of substantial audience loss.

The Nexus of Television and Sports in Transition, Part III: The Fight for the Sports Cable Dollar

For gearheads, August 17, 2013, may well go down as Black Saturday. The first signs of it were the previous day, when many of the personalities heading up Speed Channel’s coverage of NASCAR practice and qualifying started talking about the end of an era, and the network’s Trackside talk show held its final edition ever. Then, when they woke up the following morning, Speed had been replaced with something called Fox Sports 1. For much of the day, Fox Sports 1 carried much of the same NASCAR coverage that had been on Speed, but that night it aired a bunch of fights from the glorified cagefighting promotion known as the UFC, followed by a couple of snarky Canadians yukking it up alongside a bunch of ex-jocks talking about just about every sport except their beloved cars. The succeeding days would see Speed’s lineup of car-oriented shows completely gone by the wayside, replaced by a bunch more shows talking about nothing but stick-and-ball sports. Just like that, the only network gearheads had that was totally dedicated to cars was gone.

Speed fans were not happy, and quickly took to the Internet to voice their displeasure, flooding the comments of just about any article having anything to do with the new network. Here are just some of the comments they posted, all reprinted with spelling, grammatical, and other errors intact:

what idiot decided we needed another stick and ball sport station? mma? boxing? you people are totally out of touch. speed was a car channel, the only car channel…hopefully this channel will fail miserably and maybe we`ll get a car channel back. we don`t need more retired jocks and announcer wannabes telling us the same retread crap that we get fed on 100 other channels.

did you really need anther stick and ball channel? I thought cutting wind tunnel to 30 min. was bad enough but then to cancel it!!…I have an idea, change the classic espn channels format. I can’t believe anyone whatches that channel…car guys spend a lot more money on motorsports than most stick and ball sports fans. I can only hope you will change your minds, but I will not know because I will not be watching any espn channels!

who in the world decided to take speed off the air my god another sports program channel really no speed channel come on this sucks now what I can watch chopped but nothing about cars which is a large industry you have gear heads every where that watched speed n all the shows including Barret -Jackson action . also gearz and all the other shows like pinks and motorcycle racing this sucks

we did not need another all live sports channel, not everyone watches sports, we want all the car shows back from speed and everything else it had on it, now what, where did all those shows go? this is crazy that corporations keep messing with everyones lives on what we have to watch and we still have to pay the price for it.

All of my car shows, car repair shows, collector car shows are gone. Not on the air anymore. No more Stacy doing donuts in a Year One Bandit Trans Am, or climbing mountain trails in some crazy 4X4 that he just welded together. NO, Just another ESPN Wannabee Channel sadly similar to how Comcast destroyed Versus with my fishing and hunting shows. Now both of those lame ass channels are playing European Soccer games instead. Seriously. Fox and Comcast can both go screw themselves.

the reason America is a great country is because of change. What makes it the best country on the planet is admitting our mistakes. FX1 is an obvious mistake. Im sure this channel was created to further better the lives of Fox share holders. SPEED was what built America, cars. trucks. racing. DIY! shows. buying selling/auctions. Ive been patiently awaiting some good from FX1, its just not there. a huge mistake! please, bring back SPEED, u can even keep your crappy FX1 channel, just put channel 607 back on my receiver so Americans can feel like Americans again. am i the only one that feels like moving to Canada? ha, i hear SPEED still aires there. Fix this mistake FX1, i refuse to watch your programming, at least ESPN is original. l.o.l.

While Discovery’s Velocity network remained and remains focused on cars, and several old Speed programs found their way to the fledgling MavTV network, neither is anywhere near as prominent or widely-distributed as Speed was. Speed fans had been swept up by a force far bigger than their own corner of the world, one no demographic could be rich enough to avoid. That the new Fox Sports 1 format was a carbon copy of ESPN, and so many other networks, was precisely the point: ESPN was making over $8 billion a year, over half a billion from subscriber fees alone, and a business model that’s making that kind of money is one any businessman would be falling over themselves to emulate.

Fox had spread out many of their sports contracts across several different networks – besides Speed, there was FX, Fox Soccer, and Fuel – but by consolidating them all onto a single network Fox hoped to charge cable companies higher subscriber fees and lure away some of the massive ESPN audience. Speed, in fact, was a victim of its own success: its presence in nearly 90 million households was far more than Fox Soccer, which had barely 50 million, and Fuel had even less, so it was, from the perspective of the Fox corporate bean-counters, a logical choice to convert to a prospective competitor to ESPN.

It didn’t work out the way Fox had hoped – several cable operators balked at paying the increased rights fees Fox demanded, insisting on paying the same rate they had been paying for Speed, and Fox only gave in a couple days before the launch – and the ratings would be so miniscule, especially in comparison to ESPN, that Fox ended up giving advertisers make-goods on its World Series coverage, but with rights to major college football and basketball and big-time European soccer on top of the UFC, and Major League Baseball, the NASCAR Sprint Cup Series, and the World Cup and US Open golf tournament coming down the pike, Fox likely felt that, in the long-term, they could take a bigger bite out of ESPN’s pie than anyone else. What were a few pissed-off gearheads to them when those were the stakes?


The challenges ESPN faces today are very different from the challenges it faced for the first twenty years of its history. Putting sports on FX made sense for Fox during the 1990s, when ESPN’s biggest challengers dating back to the 80s were the Turner networks and USA, general-entertainment networks all, with Turner arguably holding the upper hand with the NBA, half the NFL season, TBS’ long-standing Atlanta Braves coverage, and more. The continued presence of NBA games on TNT and baseball games on TBS today is very much an anachronism. With most cable providers not offering much more than 70-odd channels, a good chunk of which was chewed up by local broadcast stations, ESPN was the “sports channel”, just as other channels, following ESPN’s “narrowcast” lead, staked their ground to their own fields or, as Turner and other such networks did, threw up a potpourri of programming.

The growth of digital cable and direct-broadcast satellite services (such as DirecTV, which boomed in popularity on the back of its exclusive carriage of the NFL’s out-of-market games) in the late 90s and early 2000s changed all that by allowing an explosion of channels of all types, and the end result was a vindication of ESPN’s all-sports strategy. People had been talking about the possibility of television growing to a thousand channels; now half that number was very much a reality, even as HD increasingly chewed up that capacity as the latter decade progressed. Brand-new channels sprung up that were even more niche, looking to fill out all the new space the cable operators had, while existing channels expanded their brand onto more specialized channels (including CNNSI and ESPNEWS) and previously niche channels found their corner increasingly crowded out and broadened their appeal in response. In a sense, digital cable ended the first war over sports on cable with ESPN scoring a resounding victory, while setting the stage for a second war. Why did Fox need to put sports on FX when they could spread FX itself to several other networks (including Fox Soccer’s rebrand to FXX) and still have enough room for two all-sports networks?

One of the new channels was the 1999 launch of NBA.com TV, which launched with highlights, live look-ins, and other NBA-produced programming; although it started as almost a glorified barker channel for the League Pass out-of-market package, some saw it as a bulwark for the league in case they needed to take their games in-house in the post-Jordan era, as well as a hedge on this Internet thing whose role in sports going forward no one was quite sure of yet.

The NBA has long been at the forefront of new revenue streams and innovation, especially during David Stern’s leadership. The standard was that sports leagues had a network partner and a cable partner, and each only aired your product one or two days a week, but as it entered a new round of negotiations with NBC and Turner in 2002, Stern was open to a brand new scheme hatched up by ESPN, which wanted to get into the NBA without having to compete with Turner. ESPN and Turner would share cable coverage of the NBA, with ESPN having games on Wednesdays and Fridays and TNT holding on to a Thursday doubleheader that would be the only games of the night. ABC would take over the broadcast package, but wouldn’t show any games until Christmas and only show 15 games total (less than half of what NBC was showing); TNT would show the All-Star Game, and the playoffs would air mostly on ESPN and TNT until the Finals.

Placing its product so heavily on cable was a big risk for the NBA, but the end result was that the league saw a 25% increase in its rights fees despite a recession and ratings tanking in the post-Jordan era, as well as games all throughout the week. The new deal also put games on the renamed NBATV, and began a long relationship between that network and Turner, almost by accident: the league originally wanted to partner with Turner on a new basic-cable general sports network, but cable operators balked.

The NBA blazed a trail that other leagues would eventually follow; the NHL Network launched in Canada in 2001 and the United States in 2007, while Major League Baseball, though late to the network party, eventually launched one in 2009, using its Extra Innings out-of-market package to blackmail cable operators into acquiring a stake in it. The NFL launched the NFL Network, its time filled mostly with programming from the NFL Films library and some basic studio shows, the year after the NBA’s landmark 2002 deal, and it would end up becoming the focal point of the controversy over sports on cable for the latter half of the decade.


The NFL’s 2005 rights negotiations turned out to be a landmark for multiple reasons. ESPN was looking to renew its Sunday night package while ABC looked to continue an over 35-year-long relationship airing Monday Night Football. But Disney was in disarray as Michael Eisner was on his way out as its head, having recently fought off a takeover bid by Comcast, and both Eisner and the NFL was concerned about the dwindling ratings for MNF. The league wanted to move the NFL’s main primetime package to Sunday, where people would already be home and where flexible scheduling could allow the league to ensure quality matchups throughout the season, but ABC was loath to interfere with the ratings hits they had found on Sunday night.

Bob Iger, Eisner’s heir apparent, was convinced NBC had no interest in the NFL, and so was willing to wait for the dust to settle over his own ascension, but the league’s executive vice president of media, former ESPN head Steve Bornstein, slowly brought Dick Ebersol around and inked a $600 million/year deal to take over NBC’s Sunday nights. It’s possible Disney could have kept both packages for much less than they ultimately paid had they jumped in sooner; instead, Iger was left with no choice but to accept a $1.1 billion deal to put Monday night games on ESPN. (Under the old arrangement, ESPN and ABC had paid $1.15 billion combined.) Just like that, ABC’s Monday night tradition was over.

NBC benefitted from the new flex-scheduling arrangement, but ESPN began setting cable ratings records left and right. By the time ESPN’s first season of Monday night games was over, it already accounted for the nine most-watched programs in ESPN history – in other words, more than half the Monday night games in just the first season had beaten every single Sunday night game on ESPN – including one game that became the most-watched program in cable television history, beating a 1993 CNN debate between Al Gore and Ross Perot, a record ESPN would set again each of the next three seasons and then hold until the BCS deal came along.

Monday Night Football still had cachet, was still a destination program, even if the NFL considered it on par with ESPN’s old Sunday night package and lower in the pecking order than what NBC had; it was the one game that had people’s undivided attention all day, and ESPN was able to build up to it all day and make it a true event. NFL games may have put ESPN on the map, but the move to Monday night established ESPN’s NFL games – and thus ESPN itself, and cable as a whole – as destination, must-have television. On the flip side, the end of Monday Night Football marked the end of ABC Sports itself; by the time the 2006 season, the first under the new deal, started, all sports programming on ABC had been rebranded as “ESPN on ABC”, complete with ESPN graphics. Soon, the sports that were airing on ABC began to inexorably dwindle.

But the NFL also opened a package of eight games on Thursday and Saturday nights up for bid. While Comcast on behalf of its Versus network, NBC Universal on behalf of USA, and Turner all expressed interest, the league ultimately opted to put the games on its own network, foregoing a rights fee in exchange for getting better distribution for its network whose profits the owners would all share in. It didn’t work as planned; for the rest of the decade the league constantly fought cable providers for carriage. Comcast initially offered the network to its digital cable subscribers the first year but moved it to a sports package the next, while Time Warner Cable and Cablevision, among others, held out entirely, many refusing to carry the network unless the league made the Sunday Ticket package available to them.

The league was able to get broad distribution for the network on Comcast again and break several other holdouts by offering a modified version of the Red Zone channel DirecTV had been offering Sunday Ticket subscribers as a premium service, but couldn’t get Time Warner Cable and Cablevision on board until it increased NFL Network’s schedule to a full season in 2012. It was the first high-profile carriage dispute arising from quality sports programming being placed on a marginally-distributed network cable providers were loath to carry at the prices they were being charged, but it would be far from the last.


The power of sports programming has the potential to create some strange bedfellows. It is such that two very different media companies can be drawn very close together almost entirely on the back of their complementary assets that they can bring to a sports contract, to the point of drawing speculation about a merger. Such is the case with the split between the CBS Corporation and Viacom in 2005, a split borne of personality conflicts between Les Moonves and the head of MTV Networks as well as a generally stagnant business, one that promised to insulate MTV Networks from the slower-growth businesses that CBS inherited, yet which created two companies with very similar revenues – and CBS was the one better situated to take advantage of the boom in sports rights… if it weren’t for most of the old Viacom’s cable networks joining the new Viacom.

By 2010 CBS wanted to get out from under a contract to air the NCAA Tournament that was set to lose it considerable amounts of money each year, to the point of engaging in talks to get ESPN to take it off its hands. Certainly the NCAA was very interested in moving most of the tournament to cable, which not only had the potential to increase the rights fees the NCAA collected but also allowed every game to be shown nationally, without the regionalization CBS had engaged in. CBS ended up retaining the tournament by forming an alliance with Turner to show games on TBS, TNT, and truTV in addition to the CBS broadcast network. Turner had never shown college basketball before and truTV, once known as Court TV, had never shown sports of any kind before, but Turner went so far as to start alternating the Final Four with CBS starting in 2016 (later negotiations allowed TBS to show the national semifinals in 2014 and 2015 while the national championship game remained on CBS).

CBS’ lack of any credible cable network prevented it from holding on to the tournament on its own, but neither was Turner in particularly good position to mount a bid without CBS. For the moment, the ability to partner with a broadcast network remains a critical piece of any effort to build a strong cable sports operation. To be sure, Turner’s strategy, as an owner of general-entertainment networks with almost-vestigial sports programming, has generally consisted of limiting itself to high-profile, big-ticket items like the major sports, but that didn’t prevent it from losing the rights to its portion of the NASCAR schedule, in part due to monetary losses. Since the NCAA Tournament deal, Turner has repeatedly looked for other properties to put on truTV, and has reportedly looked into turning it into a sports-heavy network, possibly moving over their MLB and NBA programming from TBS and TNT, but hasn’t been able to secure any other properties to put on the channel.

CBS’ broadcast network and Turner’s cable networks have talked about alliances for other sports rights, and CBS and Time Warner present complementary pieces in other ways as well – the two entities each own half of the CW network – with the only real point of competition between their respective television networks being the premium-cable networks HBO and Showtime. Even so, you’d expect any talks of an actual merger between the two companies to be limited to a very superficial analysis by a poster on a message board, yet it’s something respected financial analysts have discussed since the start of the NCAA Tournament alliance. There are a whole host of reasons to expect such a merger to remain limited to people’s fantasies, but given just how important sports have become, it’s easy to see just how enticing such a merger can look to armchair CEOs.


The prospect of ESPN and Fox competing to rack up sports rights, while also fending off advances from NBC, as CBS and Turner lurk trying to get their own piece of the action, has sports leagues salivating at how high it could drive their rights fees. Even for those without a horse in the race, the competition between the bunch of them can often seem like something out of a soap opera.

Major League Baseball has already seen the benefits the newfound competition can net them. Already it had benefitted from the steps taken by the NFL and NBA to move to cable: its 2006 rights re-negotiations placed almost the entire postseason on TBS, which ended its long tradition of national Braves games in favor of a general package of games on Sunday afternoons, with only the World Series and one League Championship Series remaining on Fox. (Previously Fox and ESPN had split the postseason with Fox airing both LCS’s and marquee Division Series games, effectively taking over Fox’s primetime in early-to-mid October.) But by 2012 it found itself in position to take advantage of its position as programming it would be hard to replicate, certainly in the near term, on sports networks.

First, it renewed its existing deal with ESPN. The new deal was not much different from what ESPN had before: ESPN kept its Sunday, Monday, and Wednesday night packages, only adding games on holidays, one game from the new Wild Card round, and any tiebreakers, yet ESPN paid close to double what it had been paying under the old contract. Doubtless a big part of the premium ESPN paid was to reduce the value of baseball to any other competitor, especially NBC, by locking them out of any of the most popular cable packages. Baseball intended to consolidate its remaining inventory to a single partner.

Desperate to maintain its presence in baseball that helped build TBS into what it became today, Turner began talking with CBS about an alliance that could allow CBS to air as little as the All-Star Game and World Series, but baseball was skeptical about the offer. That left the remaining inventory as Fox’s to lose, but Fox was unwilling to take on the weak Sunday afternoon package TBS had held for the price baseball was asking, so baseball ultimately split the rights between TBS and Fox. End result: Fox has two time slots every Saturday, with the vast majority of those games airing on Fox Sports 1, and splits the division series with TBS along the same league lines as the LCS, again with as many games as Fox wants, potentially up to and including (as is reportedly planned this year) every one of its LCS games, on Fox Sports 1, except for two games surrendered to MLB Network, while TBS reduces its Sunday afternoon commitment to the later half of the season. Both entities also paid double what they were before, despite TBS’ reduced commitment.


The biggest leagues and conferences may be salivating at having multiple competitors groveling at their feet for the valuable programming they represent, but smaller leagues, conferences, and events may benefit even more. With multiple ESPN networks, plus Fox Sports 1, NBCSN, and CBS Sports Network, there’s a lot of time in the day that needs to be filled. All these channels are desperate for programming, and that’s very good news for entities that might otherwise be completely ignored.

This is especially the case for CBS Sports Network, which is substantially weaker than the others, and which has signed contracts with the likes of Major League Lacrosse, the National Lacrosse League, the Arena Football League, and the last, abortive season of the UFL. After George Mason’s magical run to the Final Four and other NCAA Tournament success, the CAA managed to secure a substantial number of games on NBCSN, only to lose many of their best teams to the Atlantic 10, which also had a deal with NBCSN; NBCSN also has agreements with the likes of the Canadian Football League.

However, no sport may have benefitted more from the rise of cable sports networks than soccer, whose rise in the American sports landscape has been intertwined with the rise of digital cable, especially the Fox Soccer Channel, which launched in 1997 as Fox Sports World. For its entire existence through its closure last summer, Fox Soccer was the home to England’s Premier League, and as such was instrumental in spiking its rise in popularity. By the end, the Premier League was joined by games from Italy and occasionally France, as well as Europe’s biggest club competition, the UEFA Champions League, while GolTV, a significantly smaller operation launched in 2003, carried games from Spain and Germany, and sublicensed some of the former to ESPN.

Then Al Jazeera, the outfit best known as the news operation that aired Osama bin Laden’s tapes, stepped in, spiriting away the Spanish, Italian, and French leagues to create a network in beIN Sport that cable operators would have to carry, decimating GolTV and taking away a significant part of Fox Soccer’s depth. Fox Soccer, in many ways, became a victim of its own wild success; it built up the Premier League so much stateside that NBC swept the league away with a new deal that made it featured programming for NBCSN. Combined with also losing its MLS inventory to NBC, it made Fox Soccer’s conversion to the entertainment channel FXX inevitable, even with the Champions League set to be joined by World Cup soccer and other FIFA competitions. But starting next year Fox will take the German Bundesliga away from GolTV, leaving them with mostly South American leagues and potentially setting up the Bundesliga as the second-most popular European league in the states with most other leagues on the much-smaller beIN Sport.


Television has long had an impact on the biggest sports, but with sports increasingly becoming more important as programming for cable networks than in their own right, nearly every one has contorted itself to extract more money out of its partners, even in ways the fans may not like but will watch anyway. Such was the case when the NCAA considered expanding the basketball tournament to 96 teams during its 2010 renegotiations, as well as when baseball introduced its new wild-card games – in both cases motivated at least in part by a desire to increase inventory to sell to television networks. No doubt the evolution of the BCS to the new College Football Playoff was motivated as much by the desire to extract more money out of a TV partner as by the outrage surrounding the BCS system. And of course we’ve already seen how TV money has fueled conference realignment in college sports. Even smaller sports have been affected: Oracle head Larry Ellison signed an agreement to show the 2013 America’s Cup on NBCSN and designed a fast-yet-dangerous boat to make the race more TV-friendly, earning criticism and pricing almost all potential competitors out of the race.

Nothing shows the power of TV money to shape a sport, however, quite like the NFL. Forget the introduction of the Red Zone channel or the recent move to 4:25 ET starts for its late-afternoon doubleheaders. Consider that the NFL (and to a lesser degree, football as a whole) has come under fire in recent years over the issue of concussions and player safety more generally – yet the league has expanded its Thursday-night slate to a full season, meaning every team will have to play after only three days’ rest once a season, and continues to toy with the idea of expanding the regular season to 18 games, meaning more wear and tear on players’ bodies. But two more games means collecting another pound of flesh from the TV partners, and an expanded Thursday night slate means the possibility of selling some of it to a cable outlet – possibly one like Fox Sports 1 or NBCSN that would fall over itself to get the valuable programming of the NFL, even if the quality of play on Thursday nights has tended to be poor.

But when the NFL finally did sell part of the Thursday night package earlier this year, they made clear that whoever got the package would simulcast games on NFL Network, and that they were primarily looking to do business with a broadcast partner, not a cable network. The NFL didn’t like how the Thursday night games were lagging behind the other packages in viewership; by putting games on the largest possible platform, the league hoped make Thursday more of a destination night for football, thus increasing the value of the package for a longer-term deal. Audience size still matters, even for the almighty NFL, and broadcast television still provides the largest audiences. How much of the relatively weak Thursday night audiences are due to NFL Network’s still-relatively-limited distribution, how much due to some of the weaker teams the NFL’s rules require to play on Thursday night (the NFL has made clear it sees CBS’ part of the Thursday package as on par with NBC’s Sunday package), and how much due to the poor play that comes with only three days off, are all things the league will find out as the package plays out later this year. The requirement to simulcast games on NFL Network suggests that the NFL may still be leaving open the possibility of keeping games there without selling any at all over the long term.

Tomorrow: How the bubble may already be bursting and what the future might hold for sports and television in general.

The Nexus of Television and Sports in Transition, Part I: The Worldwide Leader in Profits

Situated on US 6 about 20 miles southwest of Hartford, the town of Bristol, Connecticut, was one of the early New England industrial towns. Incorporated in 1785, a few years after the end of the American Revolution, its economy took off as it became known as a clock-making town, eventually becoming home to the American Clock and Watch Museum, and later became known as the “Bell City” for its role as a center of doorbell production. As you approach the town from New York along quaint two-lane Route 6, the 19th-century style of architecture New England is so famous for gives way to forests and then a large reservoir, until you cross a railroad track and begin seeing rows of strip malls and small houses on your left, nothing to distract you too much from the Connecticut foliage and fields. Approaching from Hartford on Route 6 in the other direction, the four-lane highway slows down and shrinks to two, then as soon as you hit the line you’re slammed with gas stations and car dealerships as the road widens again through modern suburbia. Approaching from Providence and other southeastern points (or even Hartford) on Route 72, the expressway seemingly isolated from all civilization comes to an end just short of the town line, but the road continues as a four-lane divided parkway, avoiding the Forestville area and continuing not to engage with the surrounding, though visible, community until after it passes Malones Pond, beyond which it speeds past apartment buildings and incongruous houses.

Approaching from New Haven, which is almost due south of Bristol, Google Maps recommends taking Interstate 91 to Meriden, then turning onto I-691. As I-691 approaches its west end, a single lane splits off to form an on-ramp to eastbound I-84, leaving the other two lanes to continue west. A sign welcomes you to Bristol’s neighbor Southington before the ramp even reaches I-84, and scenic vistas speed by along the long ramp as various roads pass underneath; by the time you finally reach I-84 only the single-lane nature of the ramp tips you off that you weren’t on it already. The freeway remains fairly straight but abruptly turns left as you hit Exit 30, then swings right and remains relatively straight again, but prepares to curve to the right as you take Exit 31 to route 229. As the off-ramp rises to meet the road, a collection of signs on the left informs you what awaits in Bristol if you turn that way, none of them mentioning the most salient feature of this road into Bristol. After the initial spurt of gas stations and a turn-off to a Target near the I-84 interchange, Route 229 settles down past some relatively nondescript houses and other businesses; though initially a four-lane highway, the southbound side soon shrinks to a single lane as the highway becomes lined mostly with trees, eventually opening up to more houses and a few churches, which, punctuated with occasional spurts of businesses, remains the general character of the highway for some time.

And then, before you even get to the town line, you see it. Until recently, the first thing you saw was just a mass of brick buildings, only different in height from any other office park, stretching off into the distance; then the road turns left, widens back to four lanes, and hits a stoplight at a dead-end road. Then you see the massive parking lot, the humongous artifice (most of it all one building) of brick and glass, a satellite dish facing the roadway. More satellite dishes face the dead-end road you passed up, where you could see the full majesty of what lies before you. This is the headquarters of ESPN, the most powerful brand in American media, once a plucky underdog in the American sports landscape, now a seemingly unstoppable multi-billion dollar juggernaut that has become the profit engine of the Walt Disney Company, far more important to the House of Magic than Mickey Mouse. Here, in a random town in the middle of Connecticut, is the capital of the American sports universe, a place that now finds itself at the epicenter of an increasingly heated debate over the increasingly important role of sports to the cable TV industry, the many millions of dollars flowing into Bristol and from there to leagues and conferences across America and the world and its starting point in the pockets of cable TV consumers, and even the future of the television business itself. Read More »

Is Aereo Legal? Should It Be?

(Disclaimer: I am not a lawyer, and I could very easily be talking out of my ass here. Take everything you read here with a grain of salt.)

The Supreme Court is set to decide, at least in part, the fate of Aereo; plaintiffs’ amicus briefs were due Monday, Aereo will present its opening argument by March 26 with amicus briefs in their favor due by April 2, and oral arguments will begin on my birthday, April 22. For those not familiar with it, Aereo is the service that has set up tons of tiny antennas and rents each one out to each of its customers. Customers can view free, over-the-air TV from their personal antenna over the Internet on whatever Internet-connected device they wish, and record said over-the-air TV on Aereo’s cloud DVR. Aereo claims that it is merely helping people access the free, over-the-air TV they’re entitled to, but if you think the foregoing description sounds like an unnecessary technological kludge, you’d be right. Broadcasters have been suing Aereo in any court they can, convinced that Aereo is getting away with not having to pay retransmission-consent fees cable operators are subject to, and fearful that cable operators might decide to do the same thing to get away from retransmission consent fees themselves.

That this is the issue is important, because the issue being presented to the Supreme Court is the notion that Aereo is engaging in a “public performance” in violation of copyright law. And as kludgey as the foregoing description is, it would be ridiculous to argue that it is based on it; Aereo isn’t engaging in any sort of “public performance” beyond what broadcasters are already doing with their free over-the-air signals, and any notion that what people do with their personal DVR service constitutes any sort of “public performance” is ludicrous, not to mention contradictory to past court decisions. In fact, it’s been argued that a decision against Aereo on this count could set a dangerous precedent that could preclude other technologies such as Slingbox.

Let’s be clear here. Aereo is clearly trying to take advantage of a loophole in the retransmission consent (not copyright) rules, and if it keeps winning in the courts Congress is going to have to step in, if only because it could render the retransmission consent regime unenforceable. Given that Congress is likely to close the loophole on which Aereo rests anyway, the Supreme Court doesn’t need to step in in order to kill Aereo. As such, it should avoid a decision that results in any sort of unintended consequences just to kill Aereo. The Supreme Court could rule on whether or not the loophole Aereo claims to have found exists, but it’s not its place to legislate it out of existence.

Broadcasters have argued that an earlier court decision in favor of Cablevision’s cloud DVR service doesn’t apply here, because Cablevision paid for the copyrighted content. But what about someone with an over-the-air antenna hooked up to a Slingbox? What has that person done to “pay for the copyrighted content”? Nothing, at least not to the broadcasters. Yet it’s obvious that such a situation is fully legal and within the intent of the law: Congress has mandated that television signals broadcast over-the-air be available free for anyone with an antenna to pick up, and the Betamax decision established the legality of recording content for personal use.

To close the loophole on which Aereo rests, Congress would need to figure out what differentiates the above situation from what Aereo is doing. One way it could do so is by noting that Aereo is charging for access to free over-the-air TV. In other words, Aereo is making money off of broadcasters’ free over-the-air signals, and so is bound to kick some money back to them. If Aereo were really interested in just helping people access the free over-the-air TV they’re entitled to from their own personal antenna, they wouldn’t be charging rent for access to that antenna (which implies that Aereo, not the consumer, actually “owns” that antenna). But that has nothing to do with copyright, and if that’s not what retransmission-consent law says already, that’s not the place for the Supreme Court (or any court) to decide that it does.

What does the Comcast-Time Warner Cable merger mean for you?

It certainly doesn’t sound good when the two largest cable operators, substantially bigger than any of their non-satellite rivals (a year ago TWC had 12.2 million subscribers; even counting telco companies Verizon had only 4.7 million), announce they’re going to merge. As part of the deal, Comcast announced it would sell off systems representing 3 million subscribers to other parties, getting to 30 million and under a former 30% cap that had been thrown out by the courts. Were it not for that, the combined Comcast-Time Warner monolith would have had control over fully a third of the market, over seven times that of the next largest cable company, and nearly as big as DirecTV and Dish Network combined. But what would that actually mean?

Cable operators are natural monopolies; with the exception of a few “overbuilders” (none of which have more than a million subscribers), in most places you only have the choice of one cable operator if you don’t want to get a dish or Verizon or AT&T aren’t available. There’s basically nowhere where Comcast and Time Warner Cable were in direct competition with one another. The fear of a Comcast-TWC merger, it seems, is that such a behemoth could basically set up shop wherever it wanted and keep other cable operators from growing, but even then it’s hard to see how realistic that is. (Or maybe that Comcast could afford to rest on its laurels in terms of service, making it even more Comcrap.) Comcast’s purchase of NBCUniversal had the potential to be far more detrimental to the consumer in this light.

The image that comes to mind when it comes to horizontal integration on this scale is the former AT&T telephone monopoly, but even that was not broken up so much because of its overall reach but because of its vertical integration with AT&T’s business selling telephones and using its control of the phone network to undercut rival phone sellers. Perhaps the analogous fear is that Comcast will use its broad reach to show preferential treatment to NBCUniversal networks, crippling rival programmers by denying them access to 30% of the country or subjecting them to onerous conditions to get there, but it’s not clear that’s actually possible, certainly not as cable providers increasingly become Internet providers first and foremost – especially given the conditions Comcast agreed to as part of the NBCU deal, including abiding by net neutrality even after the courts threw the FCC rules out last month. If anything a larger Comcast (which, if it continues negotiating for Bright House Networks as TWC had, will be negotiating on behalf of 32 million subscribers) might actually lead to positive outcomes for consumers in the long term, standing up to increasing rights fees asked for by other programmers, especially ESPN – though of course Comcast’s own stake in content production might still give them an edge that results in worse outcomes for rival content providers and consumers. (Time will tell if the new Comcast’s approach to sports networks will be more like that of Comcast – which has largely avoided rocking the boat with anyone en route to a portfolio it proclaims as “your home for the most live sports”, legal wrangling with Tennis Channel excepted – or Time Warner Cable, with its high-profile showdowns with the likes of NFL Network, MSG, Viacom, and broadcast networks like CBS and Fox.)

Of course, where those fears might be well founded is in how much leeway Comcast has had even under net neutrality rules, including engaging in its own carriage disputes with bandwidth providers, throttling traffic on video sites, and imposing broadband data caps. A monolithic Comcast/TWC union could still conceivably, without restrictions imposed by Congress or the FCC or agreed to voluntarily by Comcast, create winners and losers in the Internet marketplace, to the point of being able to throttle cord-cutting for a substantial number of Americans. That underscores the importance of allowing as much video as possible to be transmitted over the air where it can lie outside of Comcast’s reach.