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Twelve Ways Sports Networks Will Adapt To Evolving Marketplace--SBJ
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Attackcoog Offline
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Post: #11
RE: Twelve Ways Sports Networks Will Adapt To Evolving Marketplace--SBJ
(11-07-2017 04:49 PM)arkstfan Wrote:  
(11-07-2017 03:35 PM)Attackcoog Wrote:  
(11-07-2017 03:16 PM)arkstfan Wrote:  
(11-07-2017 11:56 AM)Attackcoog Wrote:  
(11-07-2017 11:29 AM)Frank the Tank Wrote:  The one thing that sports will always have as an advantage over virtually every other form of entertainment is that people watch them live, which means they are long going to be the most desirable type of programming for advertisers. There's also long-term predictability where you can be reasonably certain that people will still watch the NFL/NBA/MLB/P5 in 10 years, whereas even the most popular scripted TV shows eventually run out of steam. Those factors inherently raise the price of sports.

Also, ESPN and other sports networks may need to change their distribution models. However, I'm always perplexed by the arguments that they've paid too much for the NFL/NBA/etc. Those long-term sports contracts might be expensive on paper, but they're also the only things that will keep ESPN and other sports networks *alive* compared to every other cable network. If you really want to see dead sports networks, it will be if Amazon/Google/Netflix/Apple get exclusive NFL and other marquee sports rights. A lot of observers are "undervaluing the value" of keeping those rights out of the hands of those tech companies for the foreseeable future. In essence, there are a lot of short-term expenses with these sports contracts, but that's really the other way that they can survive in the long-term. I'll never understand the thinking that sports networks can survive by showing less sports. That's foolish short-term stock price thinking in a world where content will always be king. The only thing that costs more for ESPN than the NFL is the cost of *not* having the NFL.


Ive said it multiple times. The biggest threat to ESPN as a major power in broadcasting is not cord cutting. The biggest threat to ESPN is that sports leagues will eventually decide to retain their broadcast rights and use a direct to consumer streaming model to maximize profits. That would set ESPN back abut 30 years to a time when they had nothing but Sportscenter and Lumberjack competitions. ESPN will pay to aggressively fight to retain those rights packages in anyway they can because without those live sports rights, ESPN doesnt survive.

I don't think the major properties are going to be terribly inclined to go into the broadcast business for their most valuable content.

If they do they get all the gain but they assume all the risk.

Much easier to sit back and let the four OTA networks, FS1, ESPN, and maybe other players like Amazon, Google, Apple, Facebook, Twitter, Netflix bid against each other and assume the risk.

What level of risk really exists? Almost every school already self produces content for olympic sports. If you control productions costs, you control the level of risk. That said, few groups of administrators are more risk averse than university presidents. So, you could be right.

The risk that the ad or subscriber market does not reach or stay at projections. Better to have ESPN on the hook for $25 million per school for the next ten years than make $35 million on your own now and $10 million eight years from now.

Of course, if the projections are that far off, ESPN probably is probably bankrupt and no longer paying you. There is always risk. Frankly, I think the real risk with the direct to consumer model is long term. With the direct to consumer model, you probably aren't churning out new t-shirt fans at the same rate as you might if the school was on free TV all the time. If you're in a conference with few cable TV windows as it is---that may not make much difference at all. If you are a P5 school with tons of high exposure windows---it probably makes a huge difference.
(This post was last modified: 11-07-2017 05:48 PM by Attackcoog.)
11-07-2017 05:42 PM
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orangefan Offline
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Post: #12
RE: Twelve Ways Sports Networks Will Adapt To Evolving Marketplace--SBJ
(11-07-2017 05:42 PM)Attackcoog Wrote:  
(11-07-2017 04:49 PM)arkstfan Wrote:  
(11-07-2017 03:35 PM)Attackcoog Wrote:  
(11-07-2017 03:16 PM)arkstfan Wrote:  
(11-07-2017 11:56 AM)Attackcoog Wrote:  Ive said it multiple times. The biggest threat to ESPN as a major power in broadcasting is not cord cutting. The biggest threat to ESPN is that sports leagues will eventually decide to retain their broadcast rights and use a direct to consumer streaming model to maximize profits. That would set ESPN back abut 30 years to a time when they had nothing but Sportscenter and Lumberjack competitions. ESPN will pay to aggressively fight to retain those rights packages in anyway they can because without those live sports rights, ESPN doesnt survive.

I don't think the major properties are going to be terribly inclined to go into the broadcast business for their most valuable content.

If they do they get all the gain but they assume all the risk.

Much easier to sit back and let the four OTA networks, FS1, ESPN, and maybe other players like Amazon, Google, Apple, Facebook, Twitter, Netflix bid against each other and assume the risk.

What level of risk really exists? Almost every school already self produces content for olympic sports. If you control productions costs, you control the level of risk. That said, few groups of administrators are more risk averse than university presidents. So, you could be right.

The risk that the ad or subscriber market does not reach or stay at projections. Better to have ESPN on the hook for $25 million per school for the next ten years than make $35 million on your own now and $10 million eight years from now.

Of course, if the projections are that far off, ESPN probably is probably bankrupt and no longer paying you. There is always risk. Frankly, I think the real risk with the direct to consumer model is long term. With the direct to consumer model, you probably aren't churning out new t-shirt fans at the same rate as you might if the school was on free TV all the time. If you're in a conference with few cable TV windows as it is---that may not make much difference at all. If you are a P5 school with tons of high exposure windows---it probably makes a huge difference.

Despite all of the handwringing, ESPN remains wildly profitable. For 9 monthsa ended June, 2017 Disney’s cable networks division made $4 billion in profits on $12 billion in revenues. https://ditm-twdc-us.storage.googleapis....rnings.pdf FY2017 earnings to be released this Thursday. It’s problem is that the seemingly neverending annual growth in profits that it had been providing to Disney did end and ESPN has entered the maturity phase of its business life cycle. It has plenty of money to pay its rights fee commitments.
(This post was last modified: 11-08-2017 09:50 AM by orangefan.)
11-07-2017 06:11 PM
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ColKurtz Offline
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Post: #13
RE: Twelve Ways Sports Networks Will Adapt To Evolving Marketplace--SBJ
(11-07-2017 03:35 PM)Attackcoog Wrote:  What level of risk really exists? Almost every school already self produces content for olympic sports. If you control productions costs, you control the level of risk. That said, few groups of administrators are more risk averse than university presidents. So, you could be right.

I think the biggest risk here is balkanization. If I'm a cord cutter paying $20-30/month for Netflix, maybe that much again for Disnyflix, how much more am I going to spend for sports? If each conference is going direct to consumer, how many comference subscriptions am I going to sign up for. Most college football fans I know are fans of college football as a whole, not just the conference their team is in. You may end up pricing yourself out of even diehard fans. If the cost of a couple of movie/tv streaming services, plus 5 conference packages, NFL(?), ends up costing me $120/month, why is that better than getting everything one cable bill? Great for people who don't watch sports, but I see revenue tanking at least for some conferences (looking at you Pac12).
11-07-2017 09:53 PM
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Attackcoog Offline
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Post: #14
RE: Twelve Ways Sports Networks Will Adapt To Evolving Marketplace--SBJ
(11-07-2017 09:53 PM)ColKurtz Wrote:  
(11-07-2017 03:35 PM)Attackcoog Wrote:  What level of risk really exists? Almost every school already self produces content for olympic sports. If you control productions costs, you control the level of risk. That said, few groups of administrators are more risk averse than university presidents. So, you could be right.

I think the biggest risk here is balkanization. If I'm a cord cutter paying $20-30/month for Netflix, maybe that much again for Disnyflix, how much more am I going to spend for sports? If each conference is going direct to consumer, how many comference subscriptions am I going to sign up for. Most college football fans I know are fans of college football as a whole, not just the conference their team is in. You may end up pricing yourself out of even diehard fans. If the cost of a couple of movie/tv streaming services, plus 5 conference packages, NFL(?), ends up costing me $120/month, why is that better than getting everything one cable bill? Great for people who don't watch sports, but I see revenue tanking at least for some conferences (looking at you Pac12).

Yeah. I think it could potentially be horrible for fans--especially if the direct to consumer model goes down to school level.
(This post was last modified: 11-08-2017 12:13 AM by Attackcoog.)
11-08-2017 12:11 AM
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Post: #15
RE: Twelve Ways Sports Networks Will Adapt To Evolving Marketplace--SBJ
(11-07-2017 05:42 PM)Attackcoog Wrote:  
(11-07-2017 04:49 PM)arkstfan Wrote:  
(11-07-2017 03:35 PM)Attackcoog Wrote:  
(11-07-2017 03:16 PM)arkstfan Wrote:  
(11-07-2017 11:56 AM)Attackcoog Wrote:  Ive said it multiple times. The biggest threat to ESPN as a major power in broadcasting is not cord cutting. The biggest threat to ESPN is that sports leagues will eventually decide to retain their broadcast rights and use a direct to consumer streaming model to maximize profits. That would set ESPN back abut 30 years to a time when they had nothing but Sportscenter and Lumberjack competitions. ESPN will pay to aggressively fight to retain those rights packages in anyway they can because without those live sports rights, ESPN doesnt survive.

I don't think the major properties are going to be terribly inclined to go into the broadcast business for their most valuable content.

If they do they get all the gain but they assume all the risk.

Much easier to sit back and let the four OTA networks, FS1, ESPN, and maybe other players like Amazon, Google, Apple, Facebook, Twitter, Netflix bid against each other and assume the risk.

What level of risk really exists? Almost every school already self produces content for olympic sports. If you control productions costs, you control the level of risk. That said, few groups of administrators are more risk averse than university presidents. So, you could be right.

The risk that the ad or subscriber market does not reach or stay at projections. Better to have ESPN on the hook for $25 million per school for the next ten years than make $35 million on your own now and $10 million eight years from now.

Of course, if the projections are that far off, ESPN probably is probably bankrupt and no longer paying you. There is always risk. Frankly, I think the real risk with the direct to consumer model is long term. With the direct to consumer model, you probably aren't churning out new t-shirt fans at the same rate as you might if the school was on free TV all the time. If you're in a conference with few cable TV windows as it is---that may not make much difference at all. If you are a P5 school with tons of high exposure windows---it probably makes a huge difference.

If ESPN is bankrupt and can't pay that means Disney can't pay. If liquidation of the Disney assets can't get you paid, you have far bigger problems than getting paid by your TV licensee.
11-08-2017 09:33 AM
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Post: #16
RE: Twelve Ways Sports Networks Will Adapt To Evolving Marketplace--SBJ
(11-07-2017 09:53 PM)ColKurtz Wrote:  
(11-07-2017 03:35 PM)Attackcoog Wrote:  What level of risk really exists? Almost every school already self produces content for olympic sports. If you control productions costs, you control the level of risk. That said, few groups of administrators are more risk averse than university presidents. So, you could be right.

I think the biggest risk here is balkanization. If I'm a cord cutter paying $20-30/month for Netflix, maybe that much again for Disnyflix, how much more am I going to spend for sports? If each conference is going direct to consumer, how many comference subscriptions am I going to sign up for. Most college football fans I know are fans of college football as a whole, not just the conference their team is in. You may end up pricing yourself out of even diehard fans. If the cost of a couple of movie/tv streaming services, plus 5 conference packages, NFL(?), ends up costing me $120/month, why is that better than getting everything one cable bill? Great for people who don't watch sports, but I see revenue tanking at least for some conferences (looking at you Pac12).

Right now you have schools like Arkansas State and Georgia Southern (and there are three more in the Sun Belt I cannot recall, Louisiana Lafayette and App I think are on the list, maybe Ga State as well) who have purchased the production equipment required and consider getting added events distributed by ESPN3 to be a marketing expense. They will produce some men's and women's basketball games, volleyball, soccer, baseball and softball games that aren't carried by the league deal and distribute on ESPN3 directly.

If sports distribution takes the Balkans model and you pay by conference or school those schools are going to go sell a few ads to mitigate costs and someone whether it is ESPN3, Twitter, Facebook, Google, Snapchat, Amazon, Hulu, Netflix or whatever remains of Yahoo! will redistribute and either insert ads or do layover ads.

If you are making less from TV than you make for buy game or a well attended home game, TV is not really a revenue stream, it's a marketing venture.

They may never draw much of an audience but they will be part of the free component of sports telecasts.
11-08-2017 09:46 AM
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Post: #17
RE: Twelve Ways Sports Networks Will Adapt To Evolving Marketplace--SBJ
(11-08-2017 09:46 AM)arkstfan Wrote:  
(11-07-2017 09:53 PM)ColKurtz Wrote:  
(11-07-2017 03:35 PM)Attackcoog Wrote:  What level of risk really exists? Almost every school already self produces content for olympic sports. If you control productions costs, you control the level of risk. That said, few groups of administrators are more risk averse than university presidents. So, you could be right.

I think the biggest risk here is balkanization. If I'm a cord cutter paying $20-30/month for Netflix, maybe that much again for Disnyflix, how much more am I going to spend for sports? If each conference is going direct to consumer, how many comference subscriptions am I going to sign up for. Most college football fans I know are fans of college football as a whole, not just the conference their team is in. You may end up pricing yourself out of even diehard fans. If the cost of a couple of movie/tv streaming services, plus 5 conference packages, NFL(?), ends up costing me $120/month, why is that better than getting everything one cable bill? Great for people who don't watch sports, but I see revenue tanking at least for some conferences (looking at you Pac12).

Right now you have schools like Arkansas State and Georgia Southern (and there are three more in the Sun Belt I cannot recall, Louisiana Lafayette and App I think are on the list, maybe Ga State as well) who have purchased the production equipment required and consider getting added events distributed by ESPN3 to be a marketing expense. They will produce some men's and women's basketball games, volleyball, soccer, baseball and softball games that aren't carried by the league deal and distribute on ESPN3 directly.

If sports distribution takes the Balkans model and you pay by conference or school those schools are going to go sell a few ads to mitigate costs and someone whether it is ESPN3, Twitter, Facebook, Google, Snapchat, Amazon, Hulu, Netflix or whatever remains of Yahoo! will redistribute and either insert ads or do layover ads.

If you are making less from TV than you make for buy game or a well attended home game, TV is not really a revenue stream, it's a marketing venture.

They may never draw much of an audience but they will be part of the free component of sports telecasts.

How is the production value on those conference games done in house? Several of the Valley schools on ESPN3 productions are unwatchable, just horrible that I just would rather listen to the radio broadcast.
11-08-2017 10:59 AM
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arkstfan Away
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Post: #18
RE: Twelve Ways Sports Networks Will Adapt To Evolving Marketplace--SBJ
(11-08-2017 10:59 AM)MissouriStateBears Wrote:  
(11-08-2017 09:46 AM)arkstfan Wrote:  
(11-07-2017 09:53 PM)ColKurtz Wrote:  
(11-07-2017 03:35 PM)Attackcoog Wrote:  What level of risk really exists? Almost every school already self produces content for olympic sports. If you control productions costs, you control the level of risk. That said, few groups of administrators are more risk averse than university presidents. So, you could be right.

I think the biggest risk here is balkanization. If I'm a cord cutter paying $20-30/month for Netflix, maybe that much again for Disnyflix, how much more am I going to spend for sports? If each conference is going direct to consumer, how many comference subscriptions am I going to sign up for. Most college football fans I know are fans of college football as a whole, not just the conference their team is in. You may end up pricing yourself out of even diehard fans. If the cost of a couple of movie/tv streaming services, plus 5 conference packages, NFL(?), ends up costing me $120/month, why is that better than getting everything one cable bill? Great for people who don't watch sports, but I see revenue tanking at least for some conferences (looking at you Pac12).

Right now you have schools like Arkansas State and Georgia Southern (and there are three more in the Sun Belt I cannot recall, Louisiana Lafayette and App I think are on the list, maybe Ga State as well) who have purchased the production equipment required and consider getting added events distributed by ESPN3 to be a marketing expense. They will produce some men's and women's basketball games, volleyball, soccer, baseball and softball games that aren't carried by the league deal and distribute on ESPN3 directly.

If sports distribution takes the Balkans model and you pay by conference or school those schools are going to go sell a few ads to mitigate costs and someone whether it is ESPN3, Twitter, Facebook, Google, Snapchat, Amazon, Hulu, Netflix or whatever remains of Yahoo! will redistribute and either insert ads or do layover ads.

If you are making less from TV than you make for buy game or a well attended home game, TV is not really a revenue stream, it's a marketing venture.

They may never draw much of an audience but they will be part of the free component of sports telecasts.

How is the production value on those conference games done in house? Several of the Valley schools on ESPN3 productions are unwatchable, just horrible that I just would rather listen to the radio broadcast.

I've only seen AState men's hoops and I'm not sure if the volleyball game I watched was part of the ESPN deal or App State did it, I suspect App did it based on quality.

The AState hoops looks like any run of the mill ESPN3 or CBS Sports Net production. Announcing, the play-by-play is homerish, color commentator better than most of the end of the bench ESPN crew but he used to work for ESPN Regional until he got tired of the travel.

The volleyball was acceptable, the director almost never showed the A-State plays celebrating winning a point, the A-State coach might not have been there for all I could tell.

The past several years, A-State's best in-house production students have been hired by ESPN to supplement the broadcast team for the Liberty Bowl so the standard is high.
11-08-2017 11:41 AM
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Attackcoog Offline
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Post: #19
RE: Twelve Ways Sports Networks Will Adapt To Evolving Marketplace--SBJ
(11-08-2017 09:33 AM)arkstfan Wrote:  
(11-07-2017 05:42 PM)Attackcoog Wrote:  
(11-07-2017 04:49 PM)arkstfan Wrote:  
(11-07-2017 03:35 PM)Attackcoog Wrote:  
(11-07-2017 03:16 PM)arkstfan Wrote:  I don't think the major properties are going to be terribly inclined to go into the broadcast business for their most valuable content.

If they do they get all the gain but they assume all the risk.

Much easier to sit back and let the four OTA networks, FS1, ESPN, and maybe other players like Amazon, Google, Apple, Facebook, Twitter, Netflix bid against each other and assume the risk.

What level of risk really exists? Almost every school already self produces content for olympic sports. If you control productions costs, you control the level of risk. That said, few groups of administrators are more risk averse than university presidents. So, you could be right.

The risk that the ad or subscriber market does not reach or stay at projections. Better to have ESPN on the hook for $25 million per school for the next ten years than make $35 million on your own now and $10 million eight years from now.

Of course, if the projections are that far off, ESPN probably is probably bankrupt and no longer paying you. There is always risk. Frankly, I think the real risk with the direct to consumer model is long term. With the direct to consumer model, you probably aren't churning out new t-shirt fans at the same rate as you might if the school was on free TV all the time. If you're in a conference with few cable TV windows as it is---that may not make much difference at all. If you are a P5 school with tons of high exposure windows---it probably makes a huge difference.

If ESPN is bankrupt and can't pay that means Disney can't pay. If liquidation of the Disney assets can't get you paid, you have far bigger problems than getting paid by your TV licensee.

Not really certain what the structure is, but I believe ESPN is likely structured as a separate corporate entity that is owned by Disney. If ESPN went bankrupt, wouldn’t it be self contained? ESPN declares bankruptcy—wouldn’t only ESPN assets be part of the bankruptcy? Frankly, I know it works that way for individuals who own corporations, I’m not exactly sure how the corporate shield works for a corporation that owns another corporation.
(This post was last modified: 11-08-2017 12:10 PM by Attackcoog.)
11-08-2017 12:06 PM
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johnbragg Offline
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Post: #20
RE: Twelve Ways Sports Networks Will Adapt To Evolving Marketplace--SBJ
(11-08-2017 12:06 PM)Attackcoog Wrote:  Not really certain what the structure is, but I believe ESPN is likely structured as a separate corporate entity that is owned by Disney. If ESPN went bankrupt, wouldn’t it be self contained? ESPN declares bankruptcy—wouldn’t only ESPN assets be part of the bankruptcy? Frankly, I know it works that way for individuals who own corporations, I’m not exactly sure how the corporate shield works for a corporation that owns another corporation.

Depends whether the contracts were with ESPN Inc or with Disney, or some subset of the Disney empire.
11-08-2017 03:07 PM
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