With the extension of nine years that Disney (NYSE:DIS)  and Time Warner’s (NYSE:TWX) have signed and agreed for their ESPN and Turner Sports to keep NBA on ABC, ESPN and TNT, The New York Times reported the deal to total around $24 billion. This makes around $2.67 billion each year for the companies.

Analysts were shocked by the heavy price tag with the deal as it costs companies around $930 each year. This may be bad news for sports junkies as cable bills will run high.

It’s obvious how much money TNT and ESPN along with other media networks make. ESPN generates content either internally or purchases it from other sources. Hence its costs are from partnership agreements or the creation of original content.

The two media networks in turn gain revenue from cable providers broadcasting their shows who in turn make revenue from advertising. The amount of revenue that Time Warner (NYSE:TWX) and Disney (NYSE:DIS) made in the previous fiscal year was 49% and 49.2% respectively.

Cable customers have to pay nearly $1.44 and $6.04 per month for TNT and ESPN respectively according to SNL Kagan, the research firm. The current deal included 52% paid by Disney (NYSE:DIS) and the remaining 48% paid by TNT. To keep gross margins whole, Disney (NYSE:DIS) will have to increase the affiliate fees up to around 7.1%. On the other hand TNT will have to go up by nearly 9.6%. Keeping all this in mind with a dollar basis, there will be an increase of nearly $0.43 as well as $0.14 each month. Another alternative for this can be $0.57 per month.

These costs usually were passed on to cable providers who in turn increase the rates that they provided to customers. However, cable providers are trying to avoid this now. This is the new trend with pay TV that makes consumers pay nothing for TV. The use of Netflix (NASDAQ:NFLX) and Hulu has increased from 4.5% in U.S. households in the year 2010 to around 6.5% today which is about a 60% increase.

Still, Pay TV isn’t doing too well however, as it reported a subscriber drop the first time last year. The industry is most likely to underperform unless and until it doesn’t offer consumers the option to decrease channels they do not want to watch. The current NBA deal is one good example referring to how the business of pay-TV is unsustainable. Customers aren’t happy and neither are they are looking for ways to fulfill their craving of good TV in the busy hectic lifestyles they lead.

Cable is definitely going away but in order to profit from it, cable if grabbing the $2.2 trillion. As cable declines, companies will surely benefit. Three companies are going to take the lead as this happens: Google (NASDAQ:GOOGL), Apple (NASDAQ:AAPL) and Netflix (NASDAQ:NFLX). Now all we have to do is to wait and see how the market reacts to these cable providers (as if we don’t already know).

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