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The Rising Costs of Sports Programming

Have you ever found yourself flipping through channels, then suddenly emotionally invested in a televised poker game? You’re not alone. American’s have been watching A LOT of sports television–and that doesn’t just mean football. From the NFL, NHL, MLB, NBA, and the PGA to poker, soccer, rugby, volleyball and more Americans love to watch sports programming! According to the LA Times, Americans have watched 41 billion collective hours watching television last year alone. That’s a ton of television. A lot of that time was spent watching sports, and the sports companies know it.

Companies like DISH Network, DirecTV, Comcast and more have been forced to write bigger and bigger checks to the sports companies each and every year. The data is undeniable: live-sports television is one of the most valuable commodities around these days. According to Barclay’s Capital, sports programming brings in close to $30 billion a year in revenue for television companies. That’s a lot of fiscal pressure that they’re able to wield.

Sports programs are the crux of what is keeping subscription based video-on-demand services from completely dominating the market. While companies like Netflix and Hulu continue to produce award-winning original content, their access to live-sports is extremely limited; and for many American’s that’s a deal breaker. While the subscription based video-on-demand services may eventually be the go-to television services, for now, sports networks still hold a trump card.

According to the LA Times, sports now make up about 40% of the programming costs paid by satellite and cable TV operators. Consumers are expressing increasing distaste for the ever-rising cost of pay-TV and sports programming is the clear culprit. While SVOD services are constantly touting a significantly cheaper alternative, they don’t offer comparable sports programming.

However, that may change. For the sports companies, the more players in the game, the more exorbitant the amount of fees they can charge. We may see SVOD services enter into the sports contracts world in the not too distant future, and that could spell big trouble for cable companies.

One only has to look at the history of the situation to gain a glimpse into how this will all play out. Before the time of cable, broadcast reigned supreme, then cable came for the reigns and now, in 2016, digital programming is on the hunt. We can already see it happening in the market today with deals like CBS’ NFL streaming contract and Twitter streaming Thursday Night Football games. Over time, sports media will begin to move into the digital television market,

It’s difficult to predict what the television landscape will look like in a decade, but it’s a safe bet to assume that live-sports programming will still be on top. No matter what team you’re rooting for, you are unlikely to find their next game on Netflix. Until that changes, everyone can expect to watch their cable bills continue to rise.



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