Baseball has been riding a wave of big money based on big TV deals, both local and national. The deals are paid for by cable TV customers whose bills keep going up and up. There are an increasing number of voices who believe we have a bubble on our hands and that bubble is bound to burst. From Pete Kotz’s report in City Pages last week:
Today, the average TV bill rests at $86 per month, about half of which pays for sports programming. That’s more than double a decade ago. So it’s no coincidence that the cable and satellite industries have been jettisoning customers for nine years straight.
The new round of deals promises to hasten these unpleasant trends. “I can’t tell you what will be the trigger,” says Matthew Polka, president of the American Cable Association. “But I am certain that at some point in the very near future, that balloon will burst.”
And when it does, baseball will take the brunt of the explosion.
One has to be at least tad skeptical of this particular report given that it begins with what I feel is a fundamental misunderstanding of baseball’s relationship to television (i.e. national TV ratings are close to meaningless as a gauge for the health of televised baseball), but the nut of the article — cable bills can’t possibly keep going up at the rate they are to pay for all of these rights deals — seems pretty intuitive.
Indeed, as recent (and not-so-recent) history has shown us, no market spirals forever upward. There will be ruts at best, crashes at worst, and the balloons always pop eventually.
Baseball had best have a contingency plan in the event it happens to it as well.