The Sports TV Bubble Shows Signs of Weakness

The foundation of Rupert Murdoch’s empire — at least the television part of it — was professional sports. In 1992, three years after launching his European satellite TV company, Sky Television, Murdoch bought the broadcast rights to a newly formed soccer conference, England’s Premier League. He paid 304 million pounds ($398 million), which was considered an outrageous sum at the time, but was ultimately a bargain. The Premier League became the most glamorous soccer league in the world, causing sports fans to sign up for Sky by the millions.

Two years later, Murdoch shocked the American sports world by outbidding CBS for the broadcast rights to the National Football League. The Fox network was eight years old, but still seeking credibility among viewers. The $1.58 billion it paid for the four-year deal gave it that credibility. Once again, the cognoscenti gasped at the price Murdoch paid. Once again, it turned out to be a bargain.