June 10, 2024

Why Watching Live Sports is So Expensive

Ever wondered why live sports subscriptions are so expensive? Read on to find out! By: Kritchanon Tan Kian Wei

As streaming TV continues to grow, the old days of cable TV are long gone for most people, except for those who prefer to watch the news, as well as sports fans. With the cost of watching live sports slowly but surely going up, one might begin to wonder why watching live sports is so expensive.

While inflation may be one of the first things to come to mind, and that is indeed part of the reason why costs are going up, there are more reasons why live sports are getting more expensive.

As mentioned earlier, today cable TV is mostly kept alive by those who continue to watch live sports and news. On top of selling channel bundles that included access to channels that subscribers may not want, in 2013, ESPN introduced a “carriage fee” of US$5.54/month, meaning that all cable TV users were helping to lower costs for live sports, even if they don’t watch live sporting events to begin with. However, as more and more people began to cut the cord, this fee has gone up, and the money lost by people cutting the cord has to be made up for somewhere, hence the rising costs for sports fans, who have shown to companies that they are willing to pay the high prices to watch their favourite teams live. 

Additionally, because streaming services have a less profitable business model than cable TV, not to mention the competitiveness of the industry due to the presence of so many streaming services, companies have less incentive to lower prices for live sports, which have proven to be extremely profitable, with 9 of the top 10 most-watched broadcasts in the US being the Super Bowl.

On top of this, deals between broadcasters and sports leagues are very expensive. The National Football League (NFL), for example, finalised in 2021, an 11-year media rights deal worth a total of over US$100 billion in 2021 that sees broadcasters like ViacomCBS, Fox, Comcast and Disney all pay over US$2 billion per year for 11 years for broadcast rights. Meanwhile, for events like the FIFA World Cup, broadcasting rights are sold via bidding, further driving costs upward.

With such high operating costs that cannot be “subsidised” by non-sports fans, and with sports fans willing to pay high prices to catch the latest and greatest games live, it’s no surprise that the cost of watching live sports have gone up over the years. So, unless some unprecedented factor changes up the industry, it looks like costly live sports subscriptions are here to stay, for better or for worse.

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