Corporatism and the Media (Part One)

Corporatism and the Media

Inside Television 587
Publication Date: 1-20-12
By: Hubert O’Hearn


Radio, as a mass market phenomenon and television as similar essentially began their mass market lives in or about 1918 0r 1945 respectively. From there and until at least the late 1980s when cable TV started to dominate the broadcast version, radio and television were broadcast (a key term) free to anyone who had the necessary hardware and knew which direction to aim the antenna.

Let us flash forward shall we, in Mr. Peabody’s Wayback Machine for those with a cultural memory long enough to get the reference? Here we are in 2012 , where in the US  ESPN has just passed the 100 million home threshold. Put another way, 100 million home snow pay an average of $4.68 per month for the privilege of watching ESPN, whether they want to or not. So, the dominant sports network gets about half a billion per month  or 6 billion a year in revenue, before it has produced a moment’s worth of programming. Nice work if you can get it.

So, as John Prine sang, just what is the hole in the arm where all the money goes? For starters, ESPN has anted up  - for the privilege of providing viewers a reason to get crawling drunk every Monday night while the Cleveland Browns and Jacksonville Jaguars stink up the field - a smooth 1.1 billion dollars per year through 2021 payable to the NFL. This in turn allows an NFL team like the New York Jets to pay Santonio Holmes $3.9 million so he can blow off receivers' meetings with Mark Sanchez.

This is not your father's Gatorade....

Now let’s ignore the re-take the network makes from commercials, as only Super Bowl ad rates  (about $400,00 per 30 second spot) are widely publicized. ESPN does not get the Super Bowl rights, only regular season. Let’s just agree to settle on the basic proposition that ESPN ain’t run by dummies and the network would not sign an agreement to which it would not make money.

Therefore, ESPN (and all other networks) charge advertisers a specified amount per 30 second spot, in order to subsidize that $1.1 billion buy...which has already been paid for by subscriber fees.

Here is the nut of it. Assmuning a cleaver-like division of responsibilities’ that average US household is not only paying their cable provider $4.68 in order to watch ESPN (and ABC and the Disney Channel among other ‘bundled ‘ properties) , but those 100 million households must also generously cough up another $11.10 each in economic activity to subsidize the NFL’s ‘costs’.

In other words, the metaphorical Joe Sixpack has ponied up about $15 per month so that he can watch something he may not want to watch. And how is that great economic engine of democracy to be sustained? Those commercials in Canada, the US or the UK will encourage economic activity based on wants rather than needs.We’re all suckers to a bright-lit ad.

We’ll be picking up in these columns how corporatism is swallowing up your paycheck. But for now... be seeing you.