Sports Could Save the TV Business—or Destroy It

Without live sports, the TV business could fall apart; and because of live sports, the TV business could fall apart.

Confused? Ha, well, blame the bundle, perhaps the most successful and most misunderstood business model in entertainment.

Networks have recognized that sports has unique social currency in live viewing, and they've stormed the marketplace in the last few years, throwing egregious sums of money in exchange for exclusive deals. Those costs are trickling up. As Patrick Hruby explained, "big time sports are taking a minimum of $84.90" out of each family's budget even if they don't care about sports. This amounts to a "sport tax" on families forced to pay for something they don't watch. Cable companies sensing this backlash are starting to resist new sports networks. There is even chatter about what would happen if sports existed on a separate "tier" that untied the Gordian Knot of TV. Households will decide for themselves if the cost of their cable package is worth the price ($73 a month, on average). But before we cheer the death of the cable bundle and the end of the sport tax, consider what might die along with it.