Hello There, Guest! (LoginRegister)

Post Reply 
Article: ESPN's two critical mistakes
Author Message
TerryD Online
Hall of Famer
*

Posts: 14,881
Joined: Feb 2006
Reputation: 898
I Root For: Notre Dame
Location: Grayson Highlands
Post: #1
Article: ESPN's two critical mistakes
"
ESPN is losing subscribers.
ESPN is paying an obscene amount of money for sports.
ESPN is losing subscribers because of a critical mistake it made in 2012 when it was negotiating carriage deals with cable companies like Comcast, Cablevision, and Cox.

According to Ourand, ESPN was negotiating for a $6-per-subscriber fee from the cable companies. To secure that high of a fee, ESPN had to be flexible on its "penetration benchmark levels," or the number of homes that cable companies guarantee ESPN will be in.

At the time, ESPN was guaranteed to be in 90% of cable subscribers' homes. To get $6 per subscriber, ESPN lowered that threshold to 80%.

When ESPN lowered the standard, it allowed cable companies to start introducing new cable packages that excluded ESPN. People are signing up for those cable packages, leading to ESPN's losing 8.5 million subscribers over the past four and half years, according to Ourand citing Nielsen estimates.

This falls in line with the numbers we collected recently. After three decades of growth, ESPN's place in the American home is slipping.

At the same time ESPN started losing subscribers, it started paying massive fees for sports.
ESPN is paying $1.9 billion annually to air "Monday Night Football." That's $800 million more than the next closest competitor. Ourand says people are skeptical there was even another bidder within $500 million of that number.

After overpaying for the NFL, ESPN overpaid for the NBA, tripling its rate. It also doubled its rate for MLB rights.

A former employee said, "It’s been a total mismanagement of rights fees, starting with the NFL renewal ... We overpaid significantly when it did not need to be that way, and it set the template to overpay for MLB and the NBA."

That's why ESPN is cutting "to the bone."




"http://www.businessinsider.com/espn-mistakes-led-to-layoffs-2015-10
10-27-2015 10:41 AM
Visit this user's website Find all posts by this user Quote this message in a reply
Advertisement


stever20 Online
Legend
*

Posts: 46,240
Joined: Nov 2011
Reputation: 725
I Root For: Sports
Location:
Post: #2
RE: Article: ESPN's two critical mistakes
I think the rights part are in large part to fight off FS1. Definitely with the NBA, and almost certainly the NFL as well.
10-27-2015 10:44 AM
Find all posts by this user Quote this message in a reply
TerryD Online
Hall of Famer
*

Posts: 14,881
Joined: Feb 2006
Reputation: 898
I Root For: Notre Dame
Location: Grayson Highlands
Post: #3
RE: Article: ESPN's two critical mistakes
Was that a Pyrrhic Victory for ESPN, fighting off FS1?
10-27-2015 10:46 AM
Visit this user's website Find all posts by this user Quote this message in a reply
Nebraskafan Offline
Banned

Posts: 1,342
Joined: Jul 2015
I Root For: Nebreaska
Location:
Post: #4
RE: Article: ESPN's two critical mistakes
Yes, ESPN has made several mistakes the last few years. One of their latest mistakes was "partnering" with the SEC to form another ESPN channel (dumb people don't realize the SEC Network is just another ESPN Channel and they own it...lol....but, but our school gets x dollars a year from it..lol).

ESPN has to answer to Disney now and Disney will keep telling ESPN to keep cutting money and they will not allow ESPN to overpay for rights again.

Heck, would not surprise me if ESPN loses a lot of the B1G football content to NBC/CBS and FOX.

Not only does ESPN pay far too much money for Monday Nigh Football, they pay Gruden $6M a year just to sit up in the booth and blaber.

ESPN is making the same mistakes that other companies have done in the past that ended up either going out of business or having to make major cuts. ESPN will likely go down as a company that has to make major cuts.
10-27-2015 10:49 AM
Find all posts by this user Quote this message in a reply
Hokie Mark Offline
Hall of Famer
*

Posts: 23,727
Joined: Sep 2011
Reputation: 1392
I Root For: VT, ACC teams
Location: Greensboro, NC
Post: #5
RE: Article: ESPN's two critical mistakes
Whether it was a bad decision to trade higher rates for fewer customers or not depends on how much they were getting before. If I sold lunch plates for $4.50 and I found I could raise the price to $6.00 while only losing 10% of my customers, I might do that (issues of greed aside).

The REAL mistake ESPN made, IMO, is trying to monopolize sports by overpaying for TV rights. This is especially true in the case of college sports, which don't get the ratings like pro sports do. It's one thing to have enough programming to fill your day, but you have to pay MUCH more to prevent the other guys from getting enough... maybe they paid TOO MUCH?
10-27-2015 10:52 AM
Visit this user's website Find all posts by this user Quote this message in a reply
Hokie Mark Offline
Hall of Famer
*

Posts: 23,727
Joined: Sep 2011
Reputation: 1392
I Root For: VT, ACC teams
Location: Greensboro, NC
Post: #6
RE: Article: ESPN's two critical mistakes
(10-27-2015 10:46 AM)TerryD Wrote:  Was that a Pyrrhic Victory for ESPN, fighting off FS1?

BINGO.
10-27-2015 10:54 AM
Visit this user's website Find all posts by this user Quote this message in a reply
Advertisement


domer1978 Offline
All American
*

Posts: 3,469
Joined: Sep 2012
Reputation: 367
I Root For: Notre Dame/Chaos
Location: California/Georgia
Post: #7
RE: Article: ESPN's two critical mistakes
[Image: Shed+a+Tear.jpg]
10-27-2015 10:55 AM
Find all posts by this user Quote this message in a reply
MWC Tex Offline
Heisman
*

Posts: 7,850
Joined: Aug 2012
Reputation: 179
I Root For: MW
Location: TX
Post: #8
RE: Article: ESPN's two critical mistakes
(10-27-2015 10:44 AM)stever20 Wrote:  I think the rights part are in large part to fight off FS1. Definitely with the NBA, and almost certainly the NFL as well.

And perhaps by 'trying' to do that they'll make FS1 even more stronger as the subscribers keeping dwindles down putting more pressure financially on ESPN to where they may have to sell the games to other competitors to keep afloat and they start paying those rights that escalate in the contracts.
10-27-2015 11:02 AM
Find all posts by this user Quote this message in a reply
SeaBlue Offline
1st String
*

Posts: 1,190
Joined: Mar 2013
Reputation: 43
I Root For: Michigan
Location: Indy
Post: #9
RE: Article: ESPN's two critical mistakes
I don't know what you guys are complaining about here.

In 5 years we'll probably be paying $6 pay-per-game.

ESPN is the best thing that could have happened for sports fans. Splitting the market won't help.
10-27-2015 11:05 AM
Find all posts by this user Quote this message in a reply
stever20 Online
Legend
*

Posts: 46,240
Joined: Nov 2011
Reputation: 725
I Root For: Sports
Location:
Post: #10
RE: Article: ESPN's two critical mistakes
(10-27-2015 11:02 AM)MWC Tex Wrote:  
(10-27-2015 10:44 AM)stever20 Wrote:  I think the rights part are in large part to fight off FS1. Definitely with the NBA, and almost certainly the NFL as well.

And perhaps by 'trying' to do that they'll make FS1 even more stronger as the subscribers keeping dwindles down putting more pressure financially on ESPN to where they may have to sell the games to other competitors to keep afloat and they start paying those rights that escalate in the contracts.

The thing is- ESPN is still making money. It's just not as much money as Disney is wanting.

Also, ESPN could if they did have to sell stuff control who they sell to.
10-27-2015 11:06 AM
Find all posts by this user Quote this message in a reply
mike012779 Offline
Special Teams
*

Posts: 598
Joined: Dec 2013
Reputation: 12
I Root For: Uconn
Location:
Post: #11
RE: Article: ESPN's two critical mistakes
I am sure ESPN is still making billions of dollars.. however instead of 8 billion a year they are making 5 billion a year. Which is a concern obviously. if you aren't making more money....your failing. Either way they are going to need to dump some sports contracts as they will cost more and more.
10-27-2015 11:06 AM
Find all posts by this user Quote this message in a reply
Advertisement


stever20 Online
Legend
*

Posts: 46,240
Joined: Nov 2011
Reputation: 725
I Root For: Sports
Location:
Post: #12
RE: Article: ESPN's two critical mistakes
(10-27-2015 11:05 AM)SeaBlue Wrote:  I don't know what you guys are complaining about here.

In 5 years we'll probably be paying $6 pay-per-game.

ESPN is the best thing that could have happened for sports fans. Splitting the market won't help.

It's the idiots that want to cut their nose off to spite their face.
10-27-2015 11:07 AM
Find all posts by this user Quote this message in a reply
DavidSt Offline
Hall of Famer
*

Posts: 23,011
Joined: Dec 2013
Reputation: 732
I Root For: ATU, P7
Location:
Post: #13
RE: Article: ESPN's two critical mistakes
Longhorns Network also a complete failure as well.
10-27-2015 11:08 AM
Visit this user's website Find all posts by this user Quote this message in a reply
TerryD Online
Hall of Famer
*

Posts: 14,881
Joined: Feb 2006
Reputation: 898
I Root For: Notre Dame
Location: Grayson Highlands
Post: #14
RE: Article: ESPN's two critical mistakes
(10-27-2015 11:05 AM)SeaBlue Wrote:  I don't know what you guys are complaining about here.

In 5 years we'll probably be paying $6 pay-per-game.

ESPN is the best thing that could have happened for sports fans. Splitting the market won't help.


I only watch one game per week anyway. :)

Death to ESPN!
10-27-2015 11:10 AM
Visit this user's website Find all posts by this user Quote this message in a reply
Wedge Offline
Moderator
*

Posts: 19,862
Joined: May 2010
Reputation: 964
I Root For: California
Location: IV, V, VI, IX
Post: #15
RE: Article: ESPN's two critical mistakes
(10-27-2015 10:52 AM)Hokie Mark Wrote:  The REAL mistake ESPN made, IMO, is trying to monopolize sports by overpaying for TV rights. This is especially true in the case of college sports, which don't get the ratings like pro sports do.

Their overpayment is much more severe for pro sports. ESPN's latest eight-year deal with the NFL pays the NFL an average of $1.9 billion/year for 18 games plus draft coverage and a bunch of studio shows where they get to flash the NFL logo. In the new NBA deal, ESPN and Turner will be paying the NBA an average of $2.6 billion/year. What ESPN is paying for NFL and NBA is absurd compared to the previous contracts for each (which might themselves have been overpriced).

Every outlet is overpaying for NFL, though. The sports execs at each network get feelings of impotence when they fear their company might get shut out in the next round of NFL contracts, so basically they're grossly overpaying for an eight-year supply of Viagra.
10-27-2015 11:19 AM
Find all posts by this user Quote this message in a reply
TodgeRodge Offline
All American
*

Posts: 4,930
Joined: Jun 2010
Reputation: 264
I Root For: Todge
Location: Westlake
Post: #16
RE: Article: ESPN's two critical mistakes
the SECn is a basic example of ESPN not understanding there are 24 hours in a day, football games take about 3.5 hours and there are only so many football fans out there

ESPN basically paid big bucks for the lowest value content mainly to put that content on a network to compete with their own networks and content they already pay big bucks for

if you look at CBS they pay X dollars for the "SEC game of the week" and for the SEC CCG and the only concession that CBS ever gave to the SEC for adding MU and A&M (and I really don't think they needed to do it, but they were laughing at ESPN paying big bucks to compete mainly with themselves) was to agree to let a SEC game be televised at the same time as the SEC game of the week

prior to that change the SEC could not have a game on any other channel at the same time as the SEC game of the week and Neal Pilson the former head of CBS sports had ALWAYS said that there was no "lookin" that would result in big noew dollars from CBS (or anyone else) for adding MU and A&M and he had even gone further and stated that A&M did not bring a ton of new value

and he was clearly correct on the "look in" because CBS has not paid a dime more on their contract and when the SECn came out all the major cable MSOs stated that just because A&M was in Texas that did not mean they would pay "in market rates" for the SECn in Texas

Clearly CBS sports has better management and even with Fox they were pretty selective on how the did things they have mainly a lot of "content" to fill their new channels, but it was ESPN that had the first tier rights for the Big 12 and Fox with more of the "content" although fox did renegotiate to get some better choices when the Big 12 redid their deal with ESPN and Fox after adding TCU and WVU and before the ESPN first tier deal came due

Fox also has more "content" in the PAC 12 deal Vs being the "first tier" partner and Fox has the Big 10 BTN 51% while ESPN has the "first tier" games as well

ESPN pays more money per game with the possible exception of CBS and the SEC and with that CBS has a single game, they have no other network of their own competing for casual "football viewers" while ESPN is paying big money for a lot of "first tier" content and then putting it on many of their own networks to compete with themselves and in the case of the ACC and SEC they are paying a lot of money for 3rd tier content and putting it on networks to compete with themselves

and at the end of the day since there are only about 14 hours out of a day when you can expect TV viewers to tune in and watch football on any single channel you can show 4 games per day in those 14 hours per channel.....and at this point I think ESPN has content that they can't even get on all of their networks they simply paid a pretty large price to keep others from getting it

even if you use the time zones that is about 18 hours in a day (with either east or west coast well out of even decent viewing hours) so that would be about 5 games per channel per day

so they have the Big 10, ACC, Big 12 and PAC 12 "first tier" along with all tiers of the ACC and the SECn

so even if you start an ACC game at 11am east coast......run it to 2:30pm east coast, start a Big 10 game at 2:30pm east coast and run it until 6pm east coast and start a Big 12 game at 6pm east coast and run it to 9:30pm east coast and then start a PAC 12 game at 9:30pm east coast that will end at 1am east coast and 3.5 hours per game is probably a bit aggressive (and we can already see results of that this season with games starting on ESPN News and ESPN U while another game finishes on ESPN or II)

and that there is showing 1 game per conference on one channel and they have a hell of a lot more games per conference to show than that

so then you get into "regional coverage" and sure that works, but still that is just fewer viewers you ever have a chance for to watch that game.....then you have ESPN II, ABC, and The Ocho and the SECn

and as you start cutting all of that into "regional coverage" (do you really even cut up the SECn into "regional coverage"?) I suppose you COULD do that if the SEC team in those games is playing a PAC 12 team or a MWC team and it is a SEC home game and thus you might put the game on in the area where the home team is and where a strong alumni base is and then put it on in the MWC or PAC 12 region and then do the same with another SECn game......but again you are slicing your total viewers thinner and thinner for that game and you still have several other channels with content you paid for showing against that

ESPN simply "out smarted" themselves and they did not look at simple factors like competing against themselves and the value of each game relative to the market they would show that game in
10-27-2015 11:33 AM
Find all posts by this user Quote this message in a reply
Advertisement


GTTiger Offline
Bench Warmer
*

Posts: 207
Joined: May 2013
Reputation: 21
I Root For: GT and Clemson
Location:
Post: #17
RE: Article: ESPN's two critical mistakes
Isn't the SEC network by all accounts making a profit?

Maybe the ESPN overpaid for other TV rights, but I don't think the SEC network is part of the issue.
10-27-2015 11:41 AM
Find all posts by this user Quote this message in a reply
DavidSt Offline
Hall of Famer
*

Posts: 23,011
Joined: Dec 2013
Reputation: 732
I Root For: ATU, P7
Location:
Post: #18
RE: Article: ESPN's two critical mistakes
(10-27-2015 11:41 AM)GTTiger Wrote:  Isn't the SEC network by all accounts making a profit?

Maybe the ESPN overpaid for other TV rights, but I don't think the SEC network is part of the issue.

There are many people who do not want it. The ratings are not what is the ESPN sold to their advertisers. Lets say they sold it to the advertisers as how many subscribers, but the actual numbers that do watch the channel could be 1%. Why would people in Arizona want the SEC Network, and why people here in the south wants the Big 10 Network?
10-27-2015 11:46 AM
Visit this user's website Find all posts by this user Quote this message in a reply
stever20 Online
Legend
*

Posts: 46,240
Joined: Nov 2011
Reputation: 725
I Root For: Sports
Location:
Post: #19
RE: Article: ESPN's two critical mistakes
(10-27-2015 11:46 AM)DavidSt Wrote:  
(10-27-2015 11:41 AM)GTTiger Wrote:  Isn't the SEC network by all accounts making a profit?

Maybe the ESPN overpaid for other TV rights, but I don't think the SEC network is part of the issue.

There are many people who do not want it. The ratings are not what is the ESPN sold to their advertisers. Lets say they sold it to the advertisers as how many subscribers, but the actual numbers that do watch the channel could be 1%. Why would people in Arizona want the SEC Network, and why people here in the south wants the Big 10 Network?

Do you have ANY proof to the ratings not being what ESPN sold to the advertisers at all, or is more of your junk?
10-27-2015 11:54 AM
Find all posts by this user Quote this message in a reply
DavidSt Offline
Hall of Famer
*

Posts: 23,011
Joined: Dec 2013
Reputation: 732
I Root For: ATU, P7
Location:
Post: #20
RE: Article: ESPN's two critical mistakes
(10-27-2015 11:54 AM)stever20 Wrote:  
(10-27-2015 11:46 AM)DavidSt Wrote:  
(10-27-2015 11:41 AM)GTTiger Wrote:  Isn't the SEC network by all accounts making a profit?

Maybe the ESPN overpaid for other TV rights, but I don't think the SEC network is part of the issue.

There are many people who do not want it. The ratings are not what is the ESPN sold to their advertisers. Lets say they sold it to the advertisers as how many subscribers, but the actual numbers that do watch the channel could be 1%. Why would people in Arizona want the SEC Network, and why people here in the south wants the Big 10 Network?

Do you have ANY proof to the ratings not being what ESPN sold to the advertisers at all, or is more of your junk?


Remember the articles that ESPN was gloating about how many subscribers that they have for their networks? They never mentioned about ratings. ESPN said they are making money off on subscribers, and not how many actually watch those Networks.
10-27-2015 11:59 AM
Visit this user's website Find all posts by this user Quote this message in a reply
Post Reply 




User(s) browsing this thread: 1 Guest(s)


Copyright © 2002-2024 Collegiate Sports Nation Bulletin Board System (CSNbbs), All Rights Reserved.
CSNbbs is an independent fan site and is in no way affiliated to the NCAA or any of the schools and conferences it represents.
This site monetizes links. FTC Disclosure.
We allow third-party companies to serve ads and/or collect certain anonymous information when you visit our web site. These companies may use non-personally identifiable information (e.g., click stream information, browser type, time and date, subject of advertisements clicked or scrolled over) during your visits to this and other Web sites in order to provide advertisements about goods and services likely to be of greater interest to you. These companies typically use a cookie or third party web beacon to collect this information. To learn more about this behavioral advertising practice or to opt-out of this type of advertising, you can visit http://www.networkadvertising.org.
Powered By MyBB, © 2002-2024 MyBB Group.