Three reasons why ceiling for rights fees is nowhere in sight

Network and league executives privately say that we are still nowhere close to a rights ceiling, and they believe rights fees will continue to climb for the foreseeable future.

Taking a look at the TV market as a whole, it’s difficult to argue with them. Even with rights fees now in the billions of dollars, sports is nowhere near as risky as entertainment programming. A quick look at the current TV season shows why. Broadcasters invested in 98 scripted series this season, 70 percent of which will never make the air, according to AdWeek magazine. Even if a series finds a home on a TV network, it has an awful success rate. When CBS canceled “The Job” after two episodes last week, it brought the number of new series canceled this season to 10. That is not the kind of environment where people want to invest. Sports, on the other hand, is relatively stable, even after a year where the biggest leagues saw viewership drops. Much has been made of the new national sports networks — CBS Sports Network, Fox Sports 1 and NBC Sports Network — that are bidding up rights. But the most competition these days is at the local level. Fox Sports, Comcast, DirecTV and Time Warner Cable own multiple RSNs. Teams are continuing to look into setting up their own networks. The competition to pick up local rights is increasing, which means media deals at the local level will continue to escalate at a big clip. Finally, cable operators and satellite companies increase prices every year, and consumers keep coming back.