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ESPN, which laid off 100 people this week, has a multitude of problems, but the basic one is this: It pays too much for content and costs too much for consumers.
That didn't used to matter because, thanks to the way the cable industry "bundled" channels, cable customers were forced to pay for it even if they never watched it. Now, however, as the cable bundle slowly disintegrates, it matters a lot.
[...] But it's a pipe dream to think that ESPN will ever make the kind of profits ($6.4 billion in 2014) that it once did, for two reasons. First, as is the case with so many other industries, the internet has both shined a light on the flaws of the cable model and exploited them. What was the main flaw of the cable model? It was that consumers had to pay for channels they never watched.
And now they don't.
It turns out that there were lots of people, including sports fans, who resented having to pay for the most expensive channel in the bundle. The popularity of streaming led to "cord cutting," but it also caused cable companies to begin offering less expensive "skinny bundles," some of which don't include ESPN.
(Score: 1, Insightful) by Anonymous Coward on Tuesday May 02 2017, @05:12PM (2 children)
For the purposes of this line of inquiry, let's assume that tax breaks do not constitute a subsidy (they do imo but I don't want to get bogged down in crap).
Any big business moving into a certain area will have some community benefits. I'm sure the new Chick-Fil-A down the road from me has some community benefits. The two year old Costco on the other side of town has some community benefits.
What makes stadiums a special class of business that they deserve any public subsidy?
Does the public also subsidize amusement parks like Six Flags or Cedar Point? (Honestly don't know and too lazy to look it up.)
Should the public subsidize big amusements parks like those if they do?
What is the difference between (Stadiums and big amusement parks if those are subsidized too) and (Chick-Fil-A and Costco)? Scale? Do the profits for the private ownership not scale as well?
(Score: 0) by Anonymous Coward on Tuesday May 02 2017, @07:46PM
The difference is that some people are batshit crazy about sports. Subsidizing it with taxpayer money is one of those "ends justifying the means" things if it brings sports to the undeserving masses. The fact that it is a big handout to a business that produces nothing of value but entertainment is lost on them.
(Score: 2) by AthanasiusKircher on Wednesday May 03 2017, @03:38PM
What is the difference between (Stadiums and big amusement parks if those are subsidized too) and (Chick-Fil-A and Costco)?
For one thing, branding. Cities, states, and even countries are frequently trying to attract people (tourists, businesses, etc.) by what makes them unique. Having a Chick-Fil-A or Costco doesn't make your city unique. Having a sports team creates an identity, same as having some sort of monuments or historical sites or whatever (which frequently get tax breaks if not outright support for maintenance and upkeep).
And I do not doubt that even some chains are able to score some local tax advantages or other businesses from local governments if they come to town. I seem to remember a South Park episode all about everyone trying to prove the town was "good enough" to get a Whole Foods. There's certainly a segment of the American population that views having a Whole Foods in a city as some sort of accomplishment or status symbol that makes the city more desirable.
Anyhow, I'm NOT necessarily arguing in favor of governmental subsidies for any of these things (sports or other businesses). But there can be a logic for encouraging local businesses in branding your town or even helping areas within a town/city. For example, many cities in the past couple decades have attempted "revitalization" efforts for their downtown areas. In doing so, they often subsidize demolition and new construction and may even give breaks to businesses or whatever that want to move in there for a while. When successful, such things often benefit lots of people: businesses get revenue, crime goes down, people get more options and a pleasant place to walk around and shop/eat/whatever.
Stadiums are not a "special class of business," but sports franchises definitely play into city identities, just as many other potential business opportunities do.