Think of it as a weak defense spoiling the efforts of a brilliant prime time offense. The cost of sports rights is so high―all sports, including the college level―that it overpowers the benefit of promoting a broadcast network's schedule, concludes a new report by Morgan Stanley media analyst Richard Bilotti. He contends the networks are wasting hundreds of millions of dollars each year licensing professional- and college-sports rights and that network claims that sports pays hidden benefits by improving a network's overall demographics, or as a promotions carrier for prime time, don't change the bottom line. Losses from sports overwhelm the games' potential value for promotion, the report finds, eating up 40% to 50% of the profits that networks generate from their prime time schedules and losing $500 million to $600 million a year. Sports "are no longer acceptable as a promotional platform for the rest of the schedule," Bilotti said in an interview. "When you put the two together"―prime time programming profits and sports losses―"you have a virtually unprofitable industry."
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