The per-household subscription fees ESPN charges cable systems amounts to “a tax on every American household,” Liberty Media Corp. CEO Greg Maffei said Monday at an investor conference sponsored by UBS AG in New York City. ESPN charges are the highest of any cable channel, according to SNL Kagan, which estimates those per-subscriber fees have jumped 42% since 2006 to $4.69. By comparison average cable channel fees were up 24% for that period to 26 cents a month. The problem isn’t just ESPN, Maffei said later, because regional networks such as Fox Sports also contribute to the overall escalation of fees networks pay to carry events. NFL, for example, is negotiating contracts that could raise broadcast networks’ fees by 60% to about $3.2 billion a year, the Wall Street Journal noted. Some executives think it might be better to position expensive sports channels such as ESPN on a separate tier that would allow uninterested subscribers to opt out and lower their bills. Otherwise, rising sports rights fees could lead many consumers to drop services. MTV Networks and Nickelodeon owner Viacom Inc.’s CEO Philippe Dauman also singled out ESPN as a significant factor in higher costs because it is “double the cost of all our networks combined.” Even though they still resist the idea of a la carte packaging, media exec are beginning to see the merits of selling smaller, cheaper programming bundles as a way to lure or retain cost-wary consumers.
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