The first provider to create a separate sports tier wins. These sports contracts are way out of control and now more than 50% of your cable bill is going to it.
The problem is that once they do that regular people will be paying $40 a month, and sports folks $160 which is a good thing because we should not be forced to pay.
What will come of that obviously is a two tier system where you have the all in package (like they already do for many sports), and PPV if say you want to watch one game.
This bundling has cause two very perverse issues in our society:
1. TV actors made a "living" in the 80's and commercials were 10 minutes. Now it is not unusual for a 2nd tier TV actor to make $1m per episode and commercials are hovering close to 20 min/hour. Cheap reality TV is like the 40's again with live entertainment TV...
2. Sports in general are now only for the rich. Spend a day at Yankee stadium and watch the hundreds disappear. This is being fueled by local tax breaks, local taxes forced on lodging,etc, and these TV contracts that are way out of control. Now broadcast TV is stuck also, so "free" OTA will disappear. Look at yesterday Comcast wanting to charge $25 for FREE OTA channels. Well you get QVC too
The result of this will eventually be a standoff, and the model will collapse by itself. No government interaction needed. These squabbles are just what the industry needs to piss consumers off.
Cable/Telco have already bet the farm on IPTV and internet. The margins are staggering. Sooner of later their fixed plant costs will allow them to drop cable because they will just be loosing to much money. TWC, Comcast, Cablevision big loosers here unless they figure out how to monetize their networks.
Note: This is probably 5-10 years out. The warning flares are up, this is by no means an emergency.