Networks pay billions to broadcast sports. How do they recoup those costs? Especially knowing all the expenses they have with hosts camera crew etc
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Television is an advertising medium first and an entertainment medium second. Everything you see on TV is there because it’s paid for via ad revenue, cable access fees, or a combination of both.
They make money through selling advertisements during the broadcast , and companies like espn also charges a subscription fee for the app or they charge the cable service providers
you know those commercials they play between the games? those cost money. The companies will pay the TV networks to run the ads who in turn create programs for those ads to run on which is why metrics like how many viewers watch your show was important and things like Nielsen rating systems which tracked what certain families watched in order to determine those metrics existed.
A simple one word answer is “advertising”.
Look at one of the top athletic events in the world to see this: the SuperBowl.
Unless you’re really disconnected, you’re going to know that SuperBowl ads are HIGHLY ANTICIPATED. People want to watch them, often people that don’t even care about American Football.
And those ads, when done well, and cleverly, generate billions of dollars (yes, billions, not millions), BILLIONS of dollars in sales for the companies that have the products they feature.
Because so, so, so many people watch sports, or just don’t care about sports but get exposed to the ad because their partner watches them, or their kids are interested, or…
on and on and on.
And (important) it’s absolute best to watch a sport event **LIVE** if you can’t be there in person.
TV channels sell advertising for big sports events because lots and lots of people get exposed to that advertising, more than any other venue.
So sports deals fuel the pathway to all that amazing cash that comes from selling advertising time.
The broadcast crews are pretty much a known cost, and are a fraction of the broadcast rights. Sure there’s some variability, but not that much, and those costs still don’t amount to much compared to what they have to pay the leagues. And when they do have to incur greater costs, it’s usually because they’re airing more games (like playoff series that last for more than the minimum number of games), and when they air more games, they sell more advertising. Speaking of advertising, that’s how they recoup money and make a profit – they sell commercial time, and sports broadcasts tend to command a premium. The audience is dependable, year in and year out, and the demographics are well known. Advertisers tailor their commercials to these audiences, typically with great results – results they are willing to pay for.
In additions to ads, cable networks (ESPN, TNT, Regional Sport Networks) make money from fees charged to cable or satellite providers to carry their network. Everyone with a cable package is paying ESPN whether they watch it or not. That ads up.
All those commercials they run during sporting events. They can sell those commercial spots for top dollar because they’re highly targeted to specific audiences (hence all the ads for trucks, beer, home improvement); fans watch sports live, so they can’t fast-forward through them like a recorded show on DVR.
They sell advertising rights, not just in media, but also for things like, “the official ________ of the NFL on FOX”.
Then there is product placement. Look at English Football, when they interview a Manager in front of that wall of logos. All of those companies pay a premium to be on that space.
Have you ever watched one of those pesky things called a commercial?
Do you think companies just get to air those for free?
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