Malone: Split sports nets from cable lineup

It’s time to break up the bundle. Cable pioneer John Malone warned that the runaway cost of sports programming poses a threat to the pay-TV industry.

Malone, who recently jumped back into the cable business with the $16 billion purchase of Virgin Media, said rising cable bills may be reaching the breaking point for consumers. He said it’s time for sports channels to be moved to a separate tier, allowing customers to decide whether to pay for them. “The sports guys may face reality that you may need to segregate your market like everyone else,” he said in an interview with CNBC. As cable and satellite-TV companies start to lose customers to Web-based viewing alternatives such as Netflix and Hulu, Malone predicted that sports programmers would shoulder the blame. “Some of the economics will be reflected back on the sports guys,” he said. The cost of sports programming continues to skyrocket, driven in part by advertiser demand for TiVo-proof programming. Cable and satellite-TV providers that agree to pay sports leagues big increases end up passing these costs on to their customers.