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,Bill Sayer

Cash rules everything around media: Sports Bar TV

By - Last modified: May 25, 2012 at 9:26 AM

If you go to a sports bar this Saturday night, there’s a better-than-average chance that there’s going to be a cover charge. Not because it’s Memorial Day weekend, or it’s the NBA playoffs. It’s because there’s UFC on this weekend, and that bar is (or should be) being charged thousands if they’re showing the fight.

Last week I talked about sports TV ratings and how they’re relatively low compared to conventional programming. In an effort to still show their events and get their share of TV revenue, many sports turn to pay per view. You’ve probably seen or purchased pay per view movies or even a fight, but how does that work for sports bars?

UFC advertises a price of around $60 for its events. This is for residential viewers. Establishments such as bars and restaurants, broadcasting the event to a larger, unpaying audience, are charged hundreds or thousands of dollars, depending on the size of the venue.

Of course, establishments will try to circumvent the fees. In 2010, the Plaza Mexico Bar & Grill in Laredo, Texas, paid the regular residential cable PPV fee for UFC 113 instead of the $1,100 cost for commercial viewings. UFC’s PPV partner sued the bar and won $32,500 in damages.

How did UFC know? It has a network of its own auditors who look for places illegally showing its events. Here’s a great story of one of those auditors, from Businessweek.

This is much more common than I expected. The Businessweek story claims thousands of these lawsuits have been filed, some with the help of venues that pay commercial fees reporting other establishments. UFC says that, since 2006, it has collected $4.7 million in settlements from commercial pirates.

It’s nearby, too. Here’s a post from an Allentown-area law firm describing a significant increase in local claims.

Perhaps the best-known sports pay per view is DirecTV’s NFL Sunday Ticket. This package, like many others at DirecTV, is based on the fire code occupancy of the restaurant: 201-350 people costs $6,425 for the season; 351-500 people jumps to $9,180. And that’s just the maximum fire code capacity of the place, not the number of guests you have or are there to watch the NFL.

Here’s DirecTV’s site with details about the costs for all of its sports PPV packages. Bars and restaurants also have higher monthly fees for non-PPV sports networks like FSN, Comcast SportsNet and the Big 10 Network. ESPN HD will run you a flat fee of $58 per month.

Let’s say I want to open a new sports bar with a maximum capacity of 250 people – about your typical Arooga’s size. For every channel I’d want, plus the PPV packages for the Big 4 sports, the bill comes to $18,000 per year before any PPV action. There were 17 UFC PPV events in 2011.

It’s not just PPV providers that want every piece of the action. This week came word that the NBC Sports TV network has told the NY Rangers and NJ Devils that they can’t hold public viewing parties during away games in this NHL playoff series. Apparently NBC Sports decided that it needed those fans watching the game at home, so they can count in the ratings. All 10,000 of them.

Bill Sayer is a financial analyst in the insurance industry and holds a degree in economics. A native of Upstate New York, Bill enjoys watching college football, the NFL, NHL and Premier League soccer from his home in Palmyra. Have a suggestion, link or question?

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