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AAC and ESPN Exclusive Negotiating Window?
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quo vadis Offline
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Post: #1
AAC and ESPN Exclusive Negotiating Window?
IIRC, the AAC and ESPN are now in the exclusive negotiating window for renewing their media deal. I think that window opened February 1st and lasts for 30 days.

Anyone with insider knowledge have word on how its going? This upcoming media deal has been speculated about almost from the day the current one was signed back in 2012.
(This post was last modified: 02-06-2019 01:58 PM by quo vadis.)
02-06-2019 01:57 PM
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Attackcoog Online
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RE: AAC and ESPN Exclusive Negotiating Window?
Honestly---its not much different from the last 6 years. If at any time in the last 6 years ESPN wanted to engage with the AAC on a new deal--they could have. During that same time, the AAC could ONLY approach ESPN about purchasing its TV rights from 2020 onward. Yes, this is the specific period stated in the contract---but I wouldnt expect ESPN to place their best offer on the table until the very end of the month---and even then---ESPN may choose to see what their real competition is before doing so.

However, for ESPN, waiting is potentially much more risky this time around since the potential buyers all know the ratings track record of the inventory in question. If ESPN lets it go to the open market--my guess is will cost them more than they want to pay to get the entire package back. So...right now...they need to decide if they really want all of it. If they do---then they really need to put a hard to resist offer on the table before the end of the current exclusive negotiating period. If they do not want all of the AAC content--then they can afford to let it get to the open market without much risk that getting what they need at a reasonable cost will hurt financially. In other words, while they may pay more per game in a competetive bidding situation, its likely that buying only half the AAC inventory on the open market will be cheaper than the cost of buying it all during the exclusive marketing period. The downside for ESPN of taking that route is they will probably not get an unfettered choice of the top games.
(This post was last modified: 02-06-2019 02:25 PM by Attackcoog.)
02-06-2019 02:18 PM
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RE: AAC and ESPN Exclusive Negotiating Window?
It will be interesting to see other networks' potential interest in the package. At the right value, any network could make a play for it. However, one of the great advantages for the AAC has been to have their games on ESPN (which has been a huge benefit to programs like ECU, Tulane, UCF, Memphis, SMU and Houston for the newly created exposure from C-USA). There is little doubt that ratings on ESPN would equate to the same ratings on another network, so there is that to consider.

The wildcard is NBC, IMO. If NBC gets an XFL package (and who knows when their deal gets announced), it shows that they are interested in more football content (to go along with their ND content). I doubt that CBS would be interested, and I don't think Turner is the answer for the AAC either. I cannot see Fox making a play, but who knows.

There is no doubt that the league is in better position now than seven years ago. Acquiring Navy for football and Wichita State for non-football were two very underrated expansion moves last go-around. However, the league still lacks a true power program to anchor itself, and is saddled by the perceived dead weight at the bottom of the conference.

If I had to guess, I would say that the AAC resigns with ESPN for a majority of its content package for $6 million per school per year, along with the outsource of other content for about a million or so more. I think the AAC could get more with a GOR, but none of the top programs would want to handcuff themselves to that (and the bottom programs would carry resentment within the league).
(This post was last modified: 02-06-2019 02:37 PM by GoldenWarrior11.)
02-06-2019 02:37 PM
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quo vadis Offline
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RE: AAC and ESPN Exclusive Negotiating Window?
(02-06-2019 02:18 PM)Attackcoog Wrote:  Honestly---its not much different from the last 6 years. If at any time in the last 6 years ESPN wanted to engage with the AAC on a new deal--they could have. During that same time, the AAC could ONLY approach ESPN about purchasing its TV rights from 2020 onward. Yes, this is the specific period stated in the contract---but I wouldnt expect ESPN to place their best offer on the table until the very end of the month---and even then---ESPN may choose to see what their real competition is before doing so.

However, for ESPN, waiting is potentially much more risky this time around since the potential buyers all know the ratings track record of the inventory in question. If ESPN lets it go to the open market--my guess is will cost them more than they want to pay to get the entire package back. So...right now...they need to decide if they really want all of it. If they do---then they really need to put a hard to resist offer on the table before the end of the current exclusive negotiating period. If they do not want all of the AAC content--then they can afford to let it get to the open market without much risk that getting what they need at a reasonable cost will hurt financially. In other words, while they may pay more per game in a competetive bidding situation, its likely that buying only half the AAC inventory on the open market will be cheaper than the cost of buying it all during the exclusive marketing period. The downside for ESPN of taking that route is they will probably not get an unfettered choice of the top games.

Well, the bolded part is one reason why this 30-day period is different from the past 6 years - once it is over with, the AAC can field offers from other networks.

Another reason is Aresco's stance. Six years ago, Aresco basically rode out the 30 day exclusive ESPN period by demanding a huge contract that he knew ESPN wouldn't bite on. He was eager to go to market, thinking it would be a huge win for the Big East (we know how that turned out).

But so far, I have gotten the sense from his public comments that this time around, Aresco would like to re-sign with ESPN. He's not seeking to blow them off like he was in 2012, so again, that suggests that this 30-day window is the time when something might happen.

Bottom line: Given that Aresco wants an ESPN deal, and given that as you say, ESPN runs risks if it doesn't sign the AAC during this window, if a deal is NOT signed during this time, that bodes poorly for the AAC getting a high-end deal.
(This post was last modified: 02-06-2019 02:59 PM by quo vadis.)
02-06-2019 02:57 PM
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Wedge Offline
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RE: AAC and ESPN Exclusive Negotiating Window?
(02-06-2019 02:57 PM)quo vadis Wrote:  Bottom line: Given that Aresco wants an ESPN deal, and given that as you say, ESPN runs risks if it doesn't sign the AAC during this window, if a deal is NOT signed during this time, that bodes poorly for the AAC getting a high-end deal.

Maybe, maybe not. It's pretty standard for a league to demand "make us an offer we can't refuse" money during an exclusive window and for the network to say, nah, we'll just see what the market says.

Only reason for the AAC to take whatever they can get during the exclusive window is to avoid forcing membership to choose, on the open market, between a lower ESPN offer and a higher offer from a less desirable outlet that provides poorer exposure. Which is fine, if that's how it plays out. It's a perfectly reasonable business decision to conclude that being on ESPN is worth passing up the possibility of more TV dollars from a provider that will deliver fewer viewers.
02-06-2019 03:25 PM
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Eldonabe Offline
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RE: AAC and ESPN Exclusive Negotiating Window?
What if ESPN could care less and the AAC is just a filler..... it kind of is just a filler now considering how much prime time exposure you get. $6m seems like the absolute best possible off you will end up with which means everything has to fall right..... not seeing it.


Unfortunately for this conference, UConn is still one of the 4 or 5 attractive properties (even with dog$chit football), and $6M may not be enough to keep them specifically..... That would not bode well for the AAC.
02-06-2019 03:50 PM
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Hokie Mark Offline
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Post: #7
RE: AAC and ESPN Exclusive Negotiating Window?
Whoever does NOT get the SEC tier 1 (between CBS and ESPN) will want the AAC content, IMO. Whoever does get the SEC tier 1 won't have a lot of room (unless CBS decides to greatly expand it's college football).

Fox seems to be going for fewer events but with higher ratings - that's not a reason for them to pursue the AAC.

CBSSN might be interested in more AAC - but would the AAC be interested in them?
02-06-2019 04:22 PM
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CliftonAve Online
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RE: AAC and ESPN Exclusive Negotiating Window?
(02-06-2019 04:22 PM)Hokie Mark Wrote:  Whoever does NOT get the SEC tier 1 (between CBS and ESPN) will want the AAC content, IMO. Whoever does get the SEC tier 1 won't have a lot of room (unless CBS decides to greatly expand it's college football).

Fox seems to be going for fewer events but with higher ratings - that's not a reason for them to pursue the AAC.

CBSSN might be interested in more AAC - but would the AAC be interested in them?

If the money was right, CBSSN gets moved to the basic tier of cable, and implement streaming I'd be ok with it. CBSSN covers the AAC pretty well. They don't spend the whole game talking about Zion Williamson, Alabama football, Clemson, the P5, Lebron, etc.
02-06-2019 04:26 PM
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usffan Offline
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RE: AAC and ESPN Exclusive Negotiating Window?
There are way too many moving parts for this to be as simple as people are making it out to be. Remember, the AAC has a deal with CBS as well that allows some of their live events (including, but not exclusive to, football and basketball). Plus, I'm sure there are discussions about numbers of games required to be carried on the air instead of on ESPN+ (and the compensation that goes with that, since ESPN is trying to build that platform). Furthermore, there's the sublicensing issue - what compensation could/should the conference expect if/when ESPN looks to sublicense rights to certain games to other outlets?

In 2012, there was a thought that NBC was trying to become a player in what was perceived to be the value of airing live sports. We now know that NBC really never got into that game, and Fox has only entered it in a limited capacity, since FS1 never really became a true ESPN competitor. Nobody really expects that to be the case in 2019.

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02-06-2019 04:52 PM
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CougarRed Offline
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RE: AAC and ESPN Exclusive Negotiating Window?
All I know is that Houston now spends $4M a year on a football coach. I don't think that happens unless the school presidents have been told we're getting a fat raise for our TV rights.
02-06-2019 05:09 PM
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RE: AAC and ESPN Exclusive Negotiating Window?
(02-06-2019 05:09 PM)CougarRed Wrote:  All I know is that Houston now spends $4M a year on a football coach. I don't think that happens unless the school presidents have been told we're getting a fat raise for our TV rights.

Or they pulled a UCONN and assumed things would turn out better than they actually do.
02-06-2019 05:16 PM
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RE: AAC and ESPN Exclusive Negotiating Window?
There are no guarantees in this world. If ESPN doesn't come up with the money the AAC wants, there are a number of new platforms now available. The AAC may have to think outside the box.
02-06-2019 05:21 PM
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RE: AAC and ESPN Exclusive Negotiating Window?
I think they are worth at least 8M/school.

I think NBC would be an excellent partner for T1 and has the capacity to air 2 games a week on network tv which is ideal exposure.

Don't sleep on Fox. They have very little presence in the Southeast but adding the AAC would change that.
02-06-2019 05:26 PM
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RE: AAC and ESPN Exclusive Negotiating Window?
(02-06-2019 04:26 PM)CliftonAve Wrote:  
(02-06-2019 04:22 PM)Hokie Mark Wrote:  Whoever does NOT get the SEC tier 1 (between CBS and ESPN) will want the AAC content, IMO. Whoever does get the SEC tier 1 won't have a lot of room (unless CBS decides to greatly expand it's college football).

Fox seems to be going for fewer events but with higher ratings - that's not a reason for them to pursue the AAC.

CBSSN might be interested in more AAC - but would the AAC be interested in them?

If the money was right, CBSSN gets moved to the basic tier of cable, and implement streaming I'd be ok with it. CBSSN covers the AAC pretty well. They don't spend the whole game talking about Zion Williamson, Alabama football, Clemson, the P5, Lebron, etc.


CBSSN's basketball recap show is top notch. Seth Davis is a little annoying, but the entire show does what ESPN used to do way back in the day ... and that is show highlights of the games, break down the strengths and weaknesses of the teams playing them, and forecast what seed they are fighting for in the big dance. They give great coverage to the non-P5 conferences too. I loved that part of the show.

How refreshing. A half hour, sometimes an hour, of nothing but sports talk.

If they have a college football show that does the same thing, I'd be all over that channel.

There's room for these other full time sports networks to eat into the ESPN following. The further ESPN gets from covering actual sports, the bigger the opening for them all.
02-06-2019 05:49 PM
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quo vadis Offline
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RE: AAC and ESPN Exclusive Negotiating Window?
(02-06-2019 03:25 PM)Wedge Wrote:  
(02-06-2019 02:57 PM)quo vadis Wrote:  Bottom line: Given that Aresco wants an ESPN deal, and given that as you say, ESPN runs risks if it doesn't sign the AAC during this window, if a deal is NOT signed during this time, that bodes poorly for the AAC getting a high-end deal.

Maybe, maybe not. It's pretty standard for a league to demand "make us an offer we can't refuse" money during an exclusive window and for the network to say, nah, we'll just see what the market says.

Only reason for the AAC to take whatever they can get during the exclusive window is to avoid forcing membership to choose, on the open market, between a lower ESPN offer and a higher offer from a less desirable outlet that provides poorer exposure. Which is fine, if that's how it plays out. It's a perfectly reasonable business decision to conclude that being on ESPN is worth passing up the possibility of more TV dollars from a provider that will deliver fewer viewers.

I am basing my claim on the particular circumstances. Aresco seems to want an ESPN deal. So if ESPN comes in with a *reasonable* offer, Aresco is likely to take it. He's not going to demand pie in the sky.

So it then stands to reason that if a deal isn't signed this month, it's probably (not surely, but probably) because ESPN made an offer that was significantly lower than what Aresco expected.

Which wouldn't bode well for what the AAC will ultimately sign for.
02-06-2019 06:56 PM
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Attackcoog Online
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RE: AAC and ESPN Exclusive Negotiating Window?
(02-06-2019 06:56 PM)quo vadis Wrote:  
(02-06-2019 03:25 PM)Wedge Wrote:  
(02-06-2019 02:57 PM)quo vadis Wrote:  Bottom line: Given that Aresco wants an ESPN deal, and given that as you say, ESPN runs risks if it doesn't sign the AAC during this window, if a deal is NOT signed during this time, that bodes poorly for the AAC getting a high-end deal.

Maybe, maybe not. It's pretty standard for a league to demand "make us an offer we can't refuse" money during an exclusive window and for the network to say, nah, we'll just see what the market says.

Only reason for the AAC to take whatever they can get during the exclusive window is to avoid forcing membership to choose, on the open market, between a lower ESPN offer and a higher offer from a less desirable outlet that provides poorer exposure. Which is fine, if that's how it plays out. It's a perfectly reasonable business decision to conclude that being on ESPN is worth passing up the possibility of more TV dollars from a provider that will deliver fewer viewers.

I am basing my claim on the particular circumstances. Aresco seems to want an ESPN deal. So if ESPN comes in with a *reasonable* offer, Aresco is likely to take it. He's not going to demand pie in the sky.

So it then stands to reason that if a deal isn't signed this month, it's probably (not surely, but probably) because ESPN made an offer that was significantly lower than what Aresco expected.

Which wouldn't bode well for what the AAC will ultimately sign for.

Depends. Aresco clearly wants some ESPN exposure. However, he also wants to keep his league together. Drag home a 3 million a year "all in" deal with ESPN and UConn is gone.

What has been largely accepted as conventional wisdom for some time is that that for the AAC to maximize its value--it will have to sell off its rights in separate bundles to different buyers. So, if a deal is NOT announced this month--all it really means is ESPN would not pay enough to make it worth going "all in" with ESPN. Frankly, I think thats the most likely scenario. ESPN doesnt NEED all of the AAC content---they just WANT it all. What ESPN really NEEDS is about 25 AAC games and enough other content for ESPN-Plus to lure AAC fans into paying for the service. There is no reason for ESPN to break the bank to get all the AAC content when a competitive 4-5 million a team offer will land the 25 game package they really need. NBC will get a 25 game package for a similar price. Basically they will share the first and second tiers with top bidder getting the preferred selection position.

The rest of the AAC content will be up for bid between CBS-Sports and ESPN-Plus. Should be good for an extra million or so a team. Thats how the AAC gets the most out of what they have to sell and ESPN still gets what they need for around half of what Aresco would like to get for the entire league. I just think this is what makes the most sense for all the parties involved. The AAC gets something close to their market value and the networks pay a reasonable price for the content they really need--without getting stuck paying for content they really dont need.

I think it may play out like it did with the Big10---but obviously on a much smaller scale. ESPN made a completely uncompetitive $150 million dollar opening bid for the first half of the Big10 rights. FOX countered with a far higher bid ($250 million) bid and won. ESPN won the second half of the Big10 with their original 150 million dollar bid---mainly because the B10 wanted some ESPN exposure. However, FOX was awarded favored selection rights. I think the AAC will play out similarly with lower dollar amounts with NBC, ESPN, CBS-Sports, and one other (maybe Amazon or Turner) as the primary players.
(This post was last modified: 02-06-2019 08:07 PM by Attackcoog.)
02-06-2019 07:49 PM
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RE: AAC and ESPN Exclusive Negotiating Window?
(02-06-2019 04:52 PM)usffan Wrote:  There are way too many moving parts for this to be as simple as people are making it out to be. Remember, the AAC has a deal with CBS as well that allows some of their live events (including, but not exclusive to, football and basketball). Plus, I'm sure there are discussions about numbers of games required to be carried on the air instead of on ESPN+ (and the compensation that goes with that, since ESPN is trying to build that platform). Furthermore, there's the sublicensing issue - what compensation could/should the conference expect if/when ESPN looks to sublicense rights to certain games to other outlets?

In 2012, there was a thought that NBC was trying to become a player in what was perceived to be the value of airing live sports. We now know that NBC really never got into that game, and Fox has only entered it in a limited capacity, since FS1 never really became a true ESPN competitor. Nobody really expects that to be the case in 2019.

USFFan

Never? Well they aren't done and no one expected them to be at ESPNs level by now. I think they are doing quite well seeing all the content they have gathered. They have taken the step as becoming a place people look for live sports.
02-06-2019 07:55 PM
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RE: AAC and ESPN Exclusive Negotiating Window?
(02-06-2019 06:56 PM)quo vadis Wrote:  
(02-06-2019 03:25 PM)Wedge Wrote:  
(02-06-2019 02:57 PM)quo vadis Wrote:  Bottom line: Given that Aresco wants an ESPN deal, and given that as you say, ESPN runs risks if it doesn't sign the AAC during this window, if a deal is NOT signed during this time, that bodes poorly for the AAC getting a high-end deal.

Maybe, maybe not. It's pretty standard for a league to demand "make us an offer we can't refuse" money during an exclusive window and for the network to say, nah, we'll just see what the market says.

Only reason for the AAC to take whatever they can get during the exclusive window is to avoid forcing membership to choose, on the open market, between a lower ESPN offer and a higher offer from a less desirable outlet that provides poorer exposure. Which is fine, if that's how it plays out. It's a perfectly reasonable business decision to conclude that being on ESPN is worth passing up the possibility of more TV dollars from a provider that will deliver fewer viewers.

I am basing my claim on the particular circumstances. Aresco seems to want an ESPN deal. So if ESPN comes in with a *reasonable* offer, Aresco is likely to take it. He's not going to demand pie in the sky.

So it then stands to reason that if a deal isn't signed this month, it's probably (not surely, but probably) because ESPN made an offer that was significantly lower than what Aresco expected.

Which wouldn't bode well for what the AAC will ultimately sign for.

Aresco nor any commissioner gets to okay the TV deal, they bring the offers they have received to the presidents and the presidents okay or veto the offers.
02-06-2019 07:59 PM
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RE: AAC and ESPN Exclusive Negotiating Window?
(02-06-2019 05:26 PM)Fighting Muskie Wrote:  I think they are worth at least 8M/school.

I think NBC would be an excellent partner for T1 and has the capacity to air 2 games a week on network tv which is ideal exposure.

Don't sleep on Fox. They have very little presence in the Southeast but adding the AAC would change that.

Muskie, I don't know how you calculated $8 million per school. You may be right, or they may be worth twice that. But their "worth" is not the same thing as "how much can they get paid." I suspect that you are judging the quality of the teams and the intensity of the competition. That's what college football fans will do. But TV networks care much less about those criteria than they do about selling ads and earning profits.

ESPN will examine their current advertising footprint and figure how much, or how little, the AAC content contributes to the price they can exact from major advertisers. What AAC teams could ESPN just not do without? If they didn't renew the media deal, where would that leave a void in their geographical footprint? The entire conference footprint is smothered by P5 competition. If I'm a national advertiser, the only reason I would buy AAC ads is if they came cheaply bundled with the whole national package, or if I really, really needed to be seen in Houston, Philadelphia, Orlando, etc. For ESPN, they have to ask "How much incremental revenue do we get from our ad bundle by including the AAC?" The payout to the conference will depend on that incremental revenue.

If ESPN offered the AAC half of the current payout, the only recourse the conference has is to solicit other TV networks or broker their individual games through IMG or some other middleman. Interest from other networks is almost certain to exist, just as a matter of due diligence, but how enthusiastic will it be? All bidders will know that they will be competing to sell ads against P5 content all day, every Saturday. Weekday games may enter the discussion.

The Illinois Fighting Illini took down a $51 million media payout last season. They weren't "worth" that much, but they "got paid" that much.
02-06-2019 09:15 PM
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RE: AAC and ESPN Exclusive Negotiating Window?
(02-06-2019 07:55 PM)RutgersGuy Wrote:  
(02-06-2019 04:52 PM)usffan Wrote:  There are way too many moving parts for this to be as simple as people are making it out to be. Remember, the AAC has a deal with CBS as well that allows some of their live events (including, but not exclusive to, football and basketball). Plus, I'm sure there are discussions about numbers of games required to be carried on the air instead of on ESPN+ (and the compensation that goes with that, since ESPN is trying to build that platform). Furthermore, there's the sublicensing issue - what compensation could/should the conference expect if/when ESPN looks to sublicense rights to certain games to other outlets?

In 2012, there was a thought that NBC was trying to become a player in what was perceived to be the value of airing live sports. We now know that NBC really never got into that game, and Fox has only entered it in a limited capacity, since FS1 never really became a true ESPN competitor. Nobody really expects that to be the case in 2019.

USFFan

Never? Well they aren't done and no one expected them to be at ESPNs level by now. I think they are doing quite well seeing all the content they have gathered. They have taken the step as becoming a place people look for live sports.

But it's now pretty clear they're never going to be able to do what ESPN was able to do, charge 100M subscribers $6-7-8 a month. That was the end goal, that was the reason that Murdoch was willing to see Fox lay out big money for sports properties, whether or not they were profitable propositions on their own.

So now the calculus for Fox buying sports rights is very different. (And Comcast's dreams of doing the same thing with NBC-SN are equally shot)
02-06-2019 09:16 PM
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