A further thought on the SEC. Their deal with CBS expires after the 2023-24 season, and currently pays only $55 million per year. Given the dramatic rise in rights fees since is was negotiated in 2008, the SEC is going to see a major jump when that packages comes up for bid. While it is only a 15 game package (eleven 3:30 games, one prime time game, one noon game, one Black Friday game, and the CCG), its value could be in the same range as the B1G's recent deal with FOX ($240 million/year) or ESPN ($190 million). While those packages include more games (25) plus basketball, it is clear that a handful of football games account for a large part of the value. FOX paid $50 million more than ESPN just for the CCG and one football game of its choice (since it will go first in the selection of weekends on which it will be first selection of games). At $190 million/year, the SEC would get a $10 million per school bump.

(02-08-2017 01:56 PM)nzmorange Wrote:  It proves that Sling was able to charge me more for content that I do want.

If the carriage fee for ESPN remains the same, and the fee for channel X (that you don't watch) goes up, causing your Sling bill to increase, that proves you are being charged, even more, for content you don't watch.

(02-08-2017 02:17 PM)orangefan Wrote:  A further thought on the SEC. Their deal with CBS expires after the 2023-24 season, and currently pays only $55 million per year. Given the dramatic rise in rights fees since is was negotiated in 2008, the SEC is going to see a major jump when that packages comes up for bid. While it is only a 15 game package (eleven 3:30 games, one prime time game, one noon game, one Black Friday game, and the CCG), its value could be in the same range as the B1G's recent deal with FOX ($240 million/year) or ESPN ($190 million). While those packages include more games (25) plus basketball, it is clear that a handful of football games account for a large part of the value. FOX paid $50 million more than ESPN just for the CCG and one football game of its choice (since it will go first in the selection of weekends on which it will be first selection of games). At $190 million/year, the SEC would get a $10 million per school bump.

With the Big 12, the Tier I package only went from $60 to $100 million while the Tier II went from $20 to $100 million when they renewed.

Clearly the SEC will be in for a big increase in the CBS contract, but probably not as much as you think. Its the miscellaneous games that have dramatically increased in value.

(02-05-2017 04:27 PM)UTEPDallas Wrote:  As an outsider, I wish the ACC well on its network but the way things are now, I don't think it will be a success in the short and long term. I could be wrong but current trends are on my side. There's two things against the ACC when the networks debuts in 2019:

-It's already behind the B1G, SEC and Pac-12 in starting a network. It'll be behind the Big Ten Network by at least 10 years. That's an eternity in tv years. Yes, ESPN will be in charge just like with the SEC Network but the ACC is not the SEC no matter how good Clemson and Florida State are. They have great basketball inventory, I'll give them that. The ACC is the only P5 league that lacks complete control of its geographic area except for Virginia and North Carolina, otherwise it's surrounded by the SEC, B1G and pro sports which is tough competition if you want to capture a casual fan in your region to watch your games. The only football game I can think of that can get attention is Clemson vs Florida State and I find it hard to believe it'll be on the ACC Network especially if both are ranked in the top 10 (hello ABC or ESPN). It'll be mostly Pitt vs BC, Wake vs Ga Tech, Louisville vs Syracuse, etc. Good luck with that.

-If the mighty Pac-12 is struggling with its network and we're taking here about a league that has complete control of the entire West Coast, two time zones and killed its geographic competitor, the MWC in the last realignment, what makes people think the ACC will do any better even with the full support of ESPN? The ACC and the Pac-12 have similar fan bases that are dependent on one or two football schools to be relevant and both lack the passionate fans the SEC, B1G and even the Big XII have. I would even say the ACC is in a worse footing because unlike the Pac-12 which is mostly flagship and land grant schools, the ACC is private/semi private/urban school heavy and once again, it's surrounded by two giants, the SEC and B1G and some of its smaller members are in pro sports towns such as Pittsburgh, Boston, Atlanta and Miami. Like I wrote at the beginning, I wish the ACC well and good luck with that network. Two and half years is still a long time and if there's one thing we've seen the last 10 years is how fast the tv landscape is changing.

1. It's no surprise that the PAC Network is struggling. One of the first negative comments you see about the ACC involves pro sports popularity in ACC markets. The reality is pro sports are just as popular in west coast markets as they are in the east.

As a former Orange County resident, who still has season tickets to SC, I can say the only game in LA is the Lakers. College football, aside from the SC/UCLA, is an afterthought in Southern California. Ironically you never see the fact Washington shares Seattle with the Seahawks or Stanford and Cal are both in San Francisco suburbs.

2. The ACC hasn't begun to monetize its position in its markets. ACC teams have won two of the last 4 national titles in football, two of the last 3 national titles in basketball, two of the last 4 national titles in baseball and one of the last 2 titles in soccer. Fans will watch winners. ESPN will bundle the SEC and ACC networks across the Nation. ESPN has already begun positioning SEC/ACC programs for rivalry week. ESPN will use the SEC to improve ACC football and The ACC to improve SEC basketball.

3. ACC programs are growing. Louisville, for example, shares the state with SEC Kentucky. Our football stadium is being expanded a 2nd time and when finished will be larger in Kentucky's. We have more season ticket holders than Kentucky. We just raised 47 million in 12 months to pay for the expansion. Basketball is popular in The Bluegrass State but so is football and baseball. Louisville is the Number #1 college basketball market in the country and the #11 college football market in the country (ahead of every market in the PAC, and every market in The Big 12 except OKC.)

Contrary to the popular opinion here The ACC is doing well. Well enough that ESPN told The Big 12 no to a network then partnered with The ACC for the next 20 years.
CJ

CardinalJim,

I'm not saying the ACC is not doing well, all I'm saying is it will be a tough battle considering how fast the tv landscape is changing and except for two states, all of its institutions are surrounded by SEC, B1G and pro sports teams.

Unlike the Pac-12 schools that are in sports towns, the ACC schools that are in the same situation are not only in the shadow of their pro sports teams, they're in the shadow of their big state school competitors as well. You can't really compare Pitt with Washington, Colorado with B.C. or Georgia Tech with Arizona State. The only two markets that are similar are LA and Miami which offer multiple entertainment options so their schools will struggle attendance wise unless they have a run for the NC.

And of course, a thread is not complete without the predictable jab at the Big XII by a Louisville fan lol. Shocked, shocked I am. But in all seriousness, good luck with that network. Two and a half years is an eternity for television years.

(02-08-2017 02:54 PM)MplsBison Wrote:  

(02-08-2017 01:56 PM)nzmorange Wrote:  It proves that Sling was able to charge me more for content that I do want.

If the carriage fee for ESPN remains the same, and the fee for channel X (that you don't watch) goes up, causing your Sling bill to increase, that proves you are being charged, even more, for content you don't watch.

Nope. I'm being charged more for content that I value. That's all I'm paying for, as is any other rational human. As soon as the cost exceeds the benefit, I'm out.

In your example, you're failing to ask why the carriage rates went up. The cable co isn't going to pay the network for the heck of it. Instead, there was an elasticity study that concluded that the inclusion of that channel allowed the cable to go up rates without losing enough customers to erase the gains from the higher rates. That study took my demographic into account, and the carriage rate was adjusted accordingly (no extra money is coming from guys like me). And, when the channels that I care about set their carriage rates, the networks and the cable companies conducted similar elasticity studies which took my demographic into account, and the number was adjusted upwards (there was extra money from guys like me).

The carriage rates are just weighted averages. Channels are bundled together because it allows networks to effectively charge variable rates for channels, despite a constant price. But nobody is paying for something that they don't want.

(02-08-2017 09:14 PM)nzmorange Wrote:  As soon as the cost exceeds the benefit, I'm out.

Exactly proving I'm correct: they can keep inching up how much they charge you for content you don't watch, and you'll keep paying it.

(02-08-2017 09:28 PM)MplsBison Wrote:  

(02-08-2017 09:14 PM)nzmorange Wrote:  As soon as the cost exceeds the benefit, I'm out.

Exactly proving I'm correct: they can keep inching up how much they charge you for content you don't watch, and you'll keep paying it.

Bison would you and Orange take it to the PM. Your argument is totally tangential to the OP and is taking up pages in between conversations others are trying to have. I would caution you in this regard with a couple of other threads as well.

JR

(02-08-2017 08:38 PM)UTEPDallas Wrote:  CardinalJim,

I'm not saying the ACC is not doing well, all I'm saying is it will be a tough battle considering how fast the tv landscape is changing and except for two states, all of its institutions are surrounded by SEC, B1G and pro sports teams.

Unlike the Pac-12 schools that are in sports towns, the ACC schools that are in the same situation are not only in the shadow of their pro sports teams, they're in the shadow of their big state school competitors as well. You can't really compare Pitt with Washington, Colorado with B.C. or Georgia Tech with Arizona State. The only two markets that are similar are LA and Miami which offer multiple entertainment options so their schools will struggle attendance wise unless they have a run for the NC.

And of course, a thread is not complete without the predictable jab at the Big XII by a Louisville fan lol. Shocked, shocked I am. But in all seriousness, good luck with that network. Two and a half years is an eternity for television years.

Good post... +3
The jab at the Big 12 is henceforth required of all Louisville fans...lol
Besides we only have a few more years and the Big 12 will be gone. We have to do it while we still can ...lol
CJ

(02-08-2017 08:38 PM)UTEPDallas Wrote:  CardinalJim,

I'm not saying the ACC is not doing well, all I'm saying is it will be a tough battle considering how fast the tv landscape is changing and except for two states, all of its institutions are surrounded by SEC, B1G and pro sports teams.

Unlike the Pac-12 schools that are in sports towns, the ACC schools that are in the same situation are not only in the shadow of their pro sports teams, they're in the shadow of their big state school competitors as well. You can't really compare Pitt with Washington, Colorado with B.C. or Georgia Tech with Arizona State. The only two markets that are similar are LA and Miami which offer multiple entertainment options so their schools will struggle attendance wise unless they have a run for the NC.

And of course, a thread is not complete without the predictable jab at the Big XII by a Louisville fan lol. Shocked, shocked I am. But in all seriousness, good luck with that network. Two and a half years is an eternity for television years.

Excellent points.

(02-08-2017 08:38 PM)UTEPDallas Wrote:  CardinalJim,

I'm not saying the ACC is not doing well, all I'm saying is it will be a tough battle considering how fast the tv landscape is changing and except for two states, all of its institutions are surrounded by SEC, B1G and pro sports teams.

Unlike the Pac-12 schools that are in sports towns, the ACC schools that are in the same situation are not only in the shadow of their pro sports teams, they're in the shadow of their big state school competitors as well. You can't really compare Pitt with Washington, Colorado with B.C. or Georgia Tech with Arizona State.

Pitt works, but I don't agree with AZ St and definitely don't agree with BC.

AZ St is not in the shadow of the U of AZ. Particularly since ASU is right in the population center, while UA is off in a secondary city.

BC ... there are no shadows. Nor does BC cast a shadow. The situation simply isn't applicable in places like Boston or NYC.

(02-08-2017 01:26 PM)nzmorange Wrote:  

(02-08-2017 12:38 PM)MplsBison Wrote:  

(02-07-2017 11:02 PM)nzmorange Wrote:  Yes, my bundle includes channels that I've never watched for any appreciable length of time, but I don't pay for them.

...

In no part of that process is anybody paying for anything that they don't want.

By definition, you are being charged for content you don't want. You are paying for content you don't use.

There is no combination of words you can type to bypass this. Sorry

(02-07-2017 11:02 PM)nzmorange Wrote:  people are randomly willing to pay random amounts of money for things that they don't want

This silly red herring doesn't disprove anything.

It's just you being absurd, in an attempt to distract from the discussion.

No, it's not. There are zero dollars that are flowing into anyone's pocket based on making someone buy something that they don't want. No matter how badly you want to believe in systematic irrationality, you won't put your money where your mouth is. And honestly, I don't blame you. Your position is precarious, which is why you have yet to offer an explaination of how it would work. Instead, you lob random, half-baked insults at me.

Swing again, bud.

ESPN has a near monopoly position and is forcing the cable companies to take its channels at a high rate. A significant portion of the cable companies' customers don't watch sports. Most of the network costs are sports. Until recently, those customers didn't have many choices and none of them had the option of taking cable without ESPN.

So ESPN is getting money from people who don't watch it.

That will go away as options develop.

Maybe we will come full circle and end up paying for individual games like the old PPV days. Buy a monthly subscription to ESPN channels for $15 with a 2 year contract. $25 for month to month. Or $1-$10 per individual game. With $10 being CCG's, and NY6 bowls and most regular season games available to purchase for a $ or two.

Or even buying content directly from the school with no middle man.

(02-09-2017 05:29 PM)bullet Wrote:  

(02-08-2017 01:26 PM)nzmorange Wrote:  

(02-08-2017 12:38 PM)MplsBison Wrote:  

(02-07-2017 11:02 PM)nzmorange Wrote:  Yes, my bundle includes channels that I've never watched for any appreciable length of time, but I don't pay for them.

...

In no part of that process is anybody paying for anything that they don't want.

By definition, you are being charged for content you don't want. You are paying for content you don't use.

There is no combination of words you can type to bypass this. Sorry

(02-07-2017 11:02 PM)nzmorange Wrote:  people are randomly willing to pay random amounts of money for things that they don't want

This silly red herring doesn't disprove anything.

It's just you being absurd, in an attempt to distract from the discussion.

No, it's not. There are zero dollars that are flowing into anyone's pocket based on making someone buy something that they don't want. No matter how badly you want to believe in systematic irrationality, you won't put your money where your mouth is. And honestly, I don't blame you. Your position is precarious, which is why you have yet to offer an explaination of how it would work. Instead, you lob random, half-baked insults at me.

Swing again, bud.

ESPN has a near monopoly position and is forcing the cable companies to take its channels at a high rate. A significant portion of the cable companies' customers don't watch sports. Most of the network costs are sports. Until recently, those customers didn't have many choices and none of them had the option of taking cable without ESPN.

So ESPN is getting money from people who don't watch it.

That will go away as options develop.

1) ESPN can't force anybody to do anything that they don't want. There are zero guns to anybody's head, and there are zero horse heads showing up in anybody's bed. ESPN can only refuse to offer their service at a given price. Similarly, cable companies can refuse to buy access to ESPN at that price. ESPN's willingness to offer their channel(s) at a price is a factor of that price point x the number of customers willing to pay that price, w/ the minimum acceptable price being based on the their operating costs. Cable companies' willingness to purchase access ESPN is capped by how much they can raise rates for supplying ESPN x how many people will pay those rates due to ESPN (i.e. how much their revenue will increase). The difference between cable co's maximum willingness to pay (high end) and ESPN's minimum willingness to offer their product (low end) is the negotiable range. The final price in that range is determined by market power, which is where ESPN's monopoly kicks in.

2) The single bill per tier that customers see is a blended average of those those calculations. Content is bundled together because bundled products can have different elasticities than non bundled products. And, when cable companies think that the number of customers willing to buy a bundled product at a given price exceeds the number of customers who would purchase the unbundled channels at a the same combined aggregate price, content is bundled together.

3) That phenomenon exists when the price at which customers will pay for channels is determined by random chance, which evens out as channels are grouped together due to small sample size variance vs. large sample size variance.

4) The bundle, as described in #3, allows individual customers to pay varying prices for individual channels while paying the same rate for the package as a whole.

5) So, at the end of the day, customers are only paying cable companies for the products that they value (point 4), which is the basis for how much cable companies will pay TV networks (point 1). The carriage rates being based on a total customer base is just a weighted average that's used for simplification (point 2). It has no real economic impact other than it greatly reduces transaction costs for all parties involved (i.e. if there were 2 channels and 2 customers, and one customer wants 1 channel, and the other wants the other, then charging each customer $5 for each channel is the same as charging one customer $10 for one channel that they want and the other customer $10 for the one channel that they want - both scenarios end up w/ both channels getting $10).

TLDR: Everyone is rational (at least on a large scale), nobody is paying for anything that they don't want, nobody is getting any money from anybody who doesn't want to pay it, and supply and demand very much apply to TV networks.

NOTE: If you still want to discuss this topic, I'd be happy to do so in a new, dedicated thread, or I'd happy to discuss this offline.

I'd like to discuss the topic, but the mods on this board won't allow it here. I'm all for a new thread in the Sports Bar or other forum.