TV Sports-Rights Spending Seen Topping $150 Billion Over Decade

  • Disney will spend about $56 billion, including NBA contract
  • Drop in pay-TV subscribers and flat ratings may curb revenue

Media companies will spend at least $150 billion over the next decade on sports rights even as weakening demand for cable-TV threatens the revenue streams needed to pay to broadcast those games.

Walt Disney Co., which owns ESPN and ABC, is committed to spending about $56 billion through 2024 including the contract it renewed with the National Basketball Association last fall, according to data compiled by Bloomberg Intelligence.

21st Century Fox is expected to pay $48.6 billion on contracts with organizations such as the National Football League and Major League Baseball that run through the next decade. Comcast Corp., which has the rights to the Olympics through 2032, will spend at least $24.4 billion on sports; Timer Warner Inc. will shell out more than $21 billion over the next decade; and CBS Corp. will spend $10.2 billion over that time, according to Bloomberg Intelligence.

Live sporting events are a major reason why people still pay for cable, so media companies vie against each other for rights to air athletic events. Sports traditionally have boosted ratings that advertisers covet and helped to raise the fees paid by pay-TV operators such as Comcast or DirecTV to carry channels.

Still, sports haven’t protected TV networks from a drop in subscribers. At the same time, TV ratings are “flatlining across all sports,” Barclays Plc analyst Kannan Venkateshwar said this month in a note to clients. For example, ratings for regular season NBA games have dropped in each of the past four years, according to Nielsen data.

While sports networks generate higher advertising dollars because their content is seen live, they could also be more exposed if people continue dropping pay-TV subscriptions and watch TV online. Many sports-focused networks generate the majority of their revenues from fees based on how many people sign up for cable and satellite TV packages. In the most recent quarter, however, pay-TV services posted their biggest-ever drop in customers, according to SNL Kagan.