The television landscape is changing, and pro sports content is playing a big role.
Charter Communications, based out of the St. Louis area, took a big hit in the fourth quarter. The nation's fourth-largest cable provider reported a loss of 63 cents per share in the fourth quarter, twice the hit that analysts were predicting, according to Deadline Hollywood. Apparently, having the quarterback from a 2-14 team as a pitch man did little to boost the fortunes of an industry giant.
All kidding aside, the financial news about Charter does have a direct connection to the NFL.
Charter, a corporate partner with the Rams, hired Sam Bradford to do a little pitch work last fall, trotting out the every-man quarterback to sell the ultimate every-man (and all other demographics) product.
The lack of marketing power from a 2-14 team aside, the NFL did present something of a problem for Charter ... as it has other cable companies. They reported a $31 million increase in programming fees. Part of that increase was due to the addition of the NFL Network.
Programming costs money, especially sports programming, whose television rights continue to reach skyward. A Los Angeles times report from Dec. 2011, noted that ESPN spent $5.2 billion to fill the "mother ship" with programming last year, up from $3.5 billion in 2006.
Part of the cost jumps can be blamed on Hi-Def programming. Of course, paying $1.9 billion per year for Monday Night Football will also push programming costs up for the network everyone loves to hate. (In their defense, Gruden's make up looks like it might cost a cool million per year to hide the exposed circuit boards in his forehead).
You, dear cable subscriber, will realize those increased costs in your cable bills.
More telling about the future of the cable business is the drop in subscribers Charter reported. The drop in the last three months of 2011 was not as bad as the drop in same period for 2010, but it points to a movement away from cable subscriptions.
For years the idea of a "buffet approach" to television was discussed. It still is. However, the well-represented lobbies of content producers have repeatedly snuffed out any meaningful attempt at it, forcing providers and subscribers to pay for channels they do not want in order to get the ones they do. (The FCC is one of the most important, but feckless regulatory agencies in the US). ESPN subsidizes ABC, and all those other niche channels designed to sell people crap they used to pay for with maxed out credit cards.
But the buffet approach is coming. Disruption. All those little elements and content providers are making it possible. From legit products and services like Hulu or AppleTV to the not-so-legit online streams where we would never, ever watch sports programming.
The future of sports on television is just fine, certainly through the end of the NFL's renewed deals for broadcasting, but change is coming. The news from Charter is a good reminder of that fact.