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Twelve Ways Sports Networks Will Adapt To Evolving Marketplace--SBJ
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Attackcoog Offline
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Twelve Ways Sports Networks Will Adapt To Evolving Marketplace--SBJ
Two articles from the Sports Business Journal on how sports networks will respond to the evolving marketplace and a piece that does a good job of explaining that the sky probably isnt falling for sports rights fees.

https://static1.squarespace.com/static/5...rticle.pdf

https://static1.squarespace.com/static/5...061217.pdf
(This post was last modified: 11-07-2017 06:11 PM by Attackcoog.)
11-06-2017 08:30 PM
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RE: Twelve Ways Sports Networks Will Adapt To Evolving Marketplace--SBJ
Interesting perspective.
Also interesting is that Disney is trying to buy all of Fox except the news, sports, local TV stations, and OTA Fox Network.

Looks like they are trying to stockpile content and content creation in advance of launching their online product.
11-06-2017 11:58 PM
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orangefan Offline
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RE: Twelve Ways Sports Networks Will Adapt To Evolving Marketplace--SBJ
His point about reducing production costs is demonstrated well by ESPN's deal with the ACC on the launch of the ACC Network. Each school will be constructing an $8-10 million production studio. This will allow the ACC Network and other ESPN networks to produce games and other shows from the schools without sending a portable production studio or any other equipment. These facilities are being funded by the school athletic departments and are a major part of the conference's capital contribution to the ACC Network with a total cost of $120 million+.
11-07-2017 08:42 AM
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Frank the Tank Offline
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RE: Twelve Ways Sports Networks Will Adapt To Evolving Marketplace--SBJ
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.
11-07-2017 11:29 AM
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Attackcoog Offline
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RE: Twelve Ways Sports Networks Will Adapt To Evolving Marketplace--SBJ
(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.
(This post was last modified: 11-07-2017 11:59 AM by Attackcoog.)
11-07-2017 11:56 AM
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orangefan Offline
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RE: Twelve Ways Sports Networks Will Adapt To Evolving Marketplace--SBJ
(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.

The advantage that ESPN has to combat this risk is that is already has the agreements in place with cable and satellite companies to collect the cost of the rights fees for the NFL, NBA and MLB. They have just demonstrated their leverage again in recent negotiations with Altice, whose predecessor Cablevision was notoriously one of the most difficult cable systems to deal with. It would be a huge risk for any of these leagues to walk away from a revenue stream that ESPN has already negotiated in hopes of doing better.
(This post was last modified: 11-07-2017 12:18 PM by orangefan.)
11-07-2017 12:17 PM
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Attackcoog Offline
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RE: Twelve Ways Sports Networks Will Adapt To Evolving Marketplace--SBJ
(11-07-2017 12:17 PM)orangefan 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.

The advantage that ESPN has to combat this risk is that is already has the agreements in place with cable and satellite companies to collect the cost of the rights fees for the NFL, NBA and MLB. They have just demonstrated their leverage again in recent negotiations with Altice, whose predecessor Cablevision was notoriously one of the most difficult cable systems to deal with. It would be a huge risk for any of these leagues to walk away from a revenue stream that ESPN has already negotiated in hopes of doing better.

For now the current P5 deals with networks is the better path. However, understand---the direct to consumer model avoids dealing with cable carriers completely. You dont need them. So having deals with cable companies isnt necessary. In fact, with the direct to consumer model, you may find that the cable companies might come knocking on YOUR door.

As for the the direct to consumer model---self production is already happening at lower levels at very low costs. As the ability to produce good looking streams with relatively low cost equipment/facilities/staffing increases, the lure of a direct to consumer model will increase. This will be accelerated if the rights fees broadcasters seek to pay less for leagues in the future. It may be that the threat of the direct to consumer model is what leagues will use to keep rights fee's high. Its like having a competing bidder in your back pocket in every negotiation.

Here is whats interesting. I could see G5 conferences being more likely to use the direct to consumer model as they are pretty much low balled by broadcasters. Thier far more likely to come out ahead that way. P5 conferences would be the least likely to use it anytime soon because they receive lucrative deals from the networks. However, if the P5 eventually see enough extra profit in going to the direct to consumer model--then the G5 would probably STOP using the direct to consumer model as they would finally be in a position to receive legitimate market value deals from the networks who would be in dire need of live FBS programming.
(This post was last modified: 11-07-2017 12:55 PM by Attackcoog.)
11-07-2017 12:40 PM
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Post: #8
RE: Twelve Ways Sports Networks Will Adapt To Evolving Marketplace--SBJ
(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.
11-07-2017 03:16 PM
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Attackcoog Offline
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Post: #9
RE: Twelve Ways Sports Networks Will Adapt To Evolving Marketplace--SBJ
(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.
11-07-2017 03:35 PM
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Post: #10
RE: Twelve Ways Sports Networks Will Adapt To Evolving Marketplace--SBJ
(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.
11-07-2017 04:49 PM
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