I hope this brings in Amazon and Google streaming capabilities into play.
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Yesterday on 740 the host was talking about how ESPN had made insane contracts to lock up the NFL, NBA, P5 college FB, the college FB Bowls/Championship, etc. These contract cannot be broken (PER HIM). Then there is the revenue loss from cord cutters. So ESPN has billions committed for product while no longer getting enough revenue to pay for it.
The host on the radio compared ESPN to AOL. Remember them, one of the original giants of the internet. ESPN is the giant in sports media that is soon going to be gone (bankruptcy because they cannot pay for the product) or less likely, acquired by a competitor after Disney lets them go. (Why one would do this when they can wait for bankruptcy and create new less expensive contracts for product?)
ESPN created the P5 and created the college bowl fiasco where you have the best bowls locked in to the P5’s and all the rest bowls are given to the worst P5 teams and the G5’s. Now ESPN has locked up most bowls and P5 and many G5 conference regular season games into pay TV, they now cannot change these games to free TV due to contracts with cable/dish providers. They are losing audience while not being able to expand audience.
What will happen next? You still have two major players.
Advertisers wanting to sell their product to a specific sports audience.
Then you have the sportswear manufacturers like NIKE, Adidas, Under Armour, etc. who have invested billions of dollars in contracts with P5’s and will need to have them in the media. I suspect these companies will get involved in supporting new avenues of broadcast media while protecting the P5’s that they have heavily invested in.
ESPN can die like AOL and will not be missed. FOX, CBSS, etc. will not be able to buy out the existing ESPN contract as is. There will be a restructuring and a loss of revenue for many P5’s. The Marquee P5 teams will be okay but will find themselves being more controlled by the sportswear mfgs. The G5’s will actually not see a drastic change in revenue because they have been living outside of the ESPN/Media inflated contracts. Those in the worst shape will be the bad P5 programs who might be replaced by superior G5’s.
Get your popcorn, it payback time.
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@Buyercoog It reminds me when Microsoft ruled the entire planet. Now the iPhone ALONE makes 3x the money that all of Microsoft does.
You adapt or die. ESPN has too much influence, ruined college football, got in bed with the NCAA and delegitimized them, and over leveraged themselves. Hopefully this will level the playing field again.
Only problem is, it’s going to directly hurt football programs.
I look at this more like what the music industry had to deal with when Napster and other torrent sites came online. Many predicted the downfall of the big corporate music entities and predicted that artists would lose money hand over fist. However, that didn’t really happen as the same corporations are around, artists are still making money, and the industry evolved with the only real change being the delivery method.
Maybe ESPN dies or falters, but more likely they evolve once they are able to and still dominate the sports landscape. Disney/ESPN has been sniffing around the MLB.TV model and will begin airing MLB Network shows on ESPN and could eventually start airing more non-ESPN programming on their channels to fill their cable inventory as they transition to a more streamlined streaming model.
They may also start going to announcers being off-site more as they were testing with college basketball this past year. It allows them to reduce their employees while still covering the same amount of sports. Announcers don’t usually bring in viewers, the game itself does. Another option may be teaming with the Universities or teams and using their announcers or on-field reporters; could be something to watch in the next contracts.
The ESPN model was a bloated, disorganized mess. Too many voices and not enough substance. Look at NFL Gameday with their 5 analysts, 2 rumor followers, 8 on-site reporters, and who knows how many behind-the-scenes staff. All that got them 3rd or 4th in the ratings for NFL pregame shows. Throwing more money at that model is just stupid, eventually just airing NFL network’s show would probably save them a ton. Hell, ESPN should just go back to the old Sportscenter model of 2 guys sitting at a desk and giving recaps while showing highlights and then showing live sports. My point is, don’t read too much into these cuts.
As far as the P5 model, no one in the industry seems to be too worried about sports rights fees. B1G just signed a monstrous contract with Fox and ESPN this past year where they basically dictated the terms. Even the PAC12 doesn’t seem too worried about their upcoming negotiations. There will always be a market for live sports; it’s one of the few remaining mass-market entertainment choices where advertisers can target a specific type of audience: males between 18-60 with disposable income. Until the public gets tired of sports, owners of that inventory will never hurt for money.
Now, hopefully, that will result in a bigger payoff for the AAC in a few years.
Anyone know if Sam Kahn made it through the cuts? I like that guy.
Sam survived the cuts.
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Sam >>>Joseph.
It would be cool if one of the folks laid off said to hell with being nice, I’m going to burn some bridges along the way and blast ESPN in my final tweet. It might help them get a new job more quickly (or perhaps not).
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happy to hear that.
ESPN just needs to follow the model used by other entities that can possibly be hurt cable cutting. Stream their own content like HBO, Starz and other companies are doing without it being tied to a cable subscription.
They can’t. It is written into a lot of the contracts they have with different leagues and sports. They had no foresight.
Agree, live sports particularly football is what dictates where this is going. You now have three distinctive sports: football, basketball and soccer.
Football pro or College will remain at the top until something drastic happens. Gambling/fixing killed boxing. There is also the issue of safety.
Basketball: both pro and college and with growing international markets is a plus for media rights.
Soccer: demographics show that it is on a major upswing. Just compare the value of an MLS franchise in 1996 to what it is today. It already has passed the NHL but will soon be head to head with baseball.
Baseball? Huge loss in minority interests and younger audience not only viewing but also playing/participating. Games are way too long. Just think of the cost to broadcast 3 to 4 hours.
Golf? Tiger took away a major share of the viewing audience. I read that networks have lost over 50% to 90% of viewership since he has been sidelined. Again, a round of golf is way too long. Just as recently as 2015 per the USGA over 1,400 courses needed to close nationwide to establish just an even balance ratio between new and lost players.
As much as people want to blame cord-cutting, that is definitely another factor is the insane money ESPN has burned in bad investments. LHN is a factor, the price they paid for the NBA and MLB packages is a factor. Even without the cord-cutting, ESPN was going to be in trouble, the cord cutting has made the problem much worse. ESPN has talked about monetizing ESPN3, offering it to people who do not have cable for a monthly fee. While that will help, they have to get the broadcast rights under control.
ESPN is not going out of business. The niche channels that don’t have Disney backing that are getting hurt by cord-cutting are the ones that I really feel for. They are losing subscribers at the same rate as ESPN.
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And the worry for the American:
There is nothing in there about whether they would spend less on non-P5 conferences, but CUSA’s last contract is a warning sign.
The American needs to look beyond ESPN for TV contracts. Possibly look into a contract with NBC. Only thing NBC has is Notre Dame and they could possibly lose Notre Dame when their contract expires in 2025.
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Ah, the NBC great white whale. They lowballed the AAC even greater than ESPN did when the conference formed.
NBC is the one that basically locked the American into their current contract. NBC decided to way-underbid the contract which allowed ESPN to match the terms. I’m not sure they’ll be the ones to help us out this time either.
It would make sense for a network that needed content to try to take a flier on the conference and try to build them up as a P6. Problem is that the American needs exposure and no one does it better than ESPN.
All of these moves direct contract talks in one direction. espn and Fox bidding big and probably more than ever on the P5’s and the rest G5’s will suffer as a consequence. In another word this could be called consolidation.
Aresco is going to have to be creative. Nobody is going to give the American anything close to P5 money, and in light of the subscriber losses, I’d actually be surprised if we were even offered the same money we get now.