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"Sports networks squeezed by rising costs and fewer subscribers"
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Gamenole Offline
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Post: #1
"Sports networks squeezed by rising costs and fewer subscribers"
This is likely to have an effect on future conference realignment -

https://www.axios.com/2022/05/10/sports-...er-viewers
05-10-2022 09:07 AM
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CitrusUCF Offline
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Post: #2
RE: "Sports networks squeezed by rising costs and fewer subscribers"
Interesting that Turner has grown their revenue while losing subscribers. I’d see that as confirmation that they will be players in the upcoming conference TV contracts.
05-10-2022 09:12 AM
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Yosef181 Offline
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RE: "Sports networks squeezed by rising costs and fewer subscribers"
The only reason to have cable/satellite anymore is for live sports. If it weren't a requirement where I rent, I wouldn't have it.
05-10-2022 09:18 AM
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quo vadis Offline
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RE: "Sports networks squeezed by rising costs and fewer subscribers"
(05-10-2022 09:18 AM)Yosef181 Wrote:  The only reason to have cable/satellite anymore is for live sports. If it weren't a requirement where I rent, I wouldn't have it.

I have a heavy cable bill, about $210 a month (which includes my internet service), and yeah, much of what I watch is live sports, but I have shopped around and don't see how streaming alone could save me much money.

IIRC, there was a time maybe 6-7 years ago, when streaming was new and streamers were offering awesome deals, where you could "cut the cord" and save a lot. But as with everything, markets converge, and streaming prices have risen, while cable channels have responded by making their channels available via streaming, not just tethered to the home TVs.

So my solution has been "both". I have the cable package, and also pay about $30 a month on top of that for the Disney Bundle and Netflix. I also get Peacock for "free" as part of my cable deal.
(This post was last modified: 05-10-2022 05:21 PM by quo vadis.)
05-10-2022 09:46 AM
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Scoochpooch1 Offline
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Post: #5
RE: "Sports networks squeezed by rising costs and fewer subscribers"
(05-10-2022 09:46 AM)quo vadis Wrote:  
(05-10-2022 09:18 AM)Yosef181 Wrote:  The only reason to have cable/satellite anymore is for live sports. If it weren't a requirement where I rent, I wouldn't have it.

I have a heavy cable bill, about $210 a month (which includes my internet service), and yeah, much of what I watch is live sports, but I have shopped around and don't see how streaming alone could save me much money.

IIRC, there was a time maybe 6-7 years ago, when streaming was new and streamers were offering awesome deals, where you could "cut the cord" and save a lot. But as with everything, markets converge, and streaming prices have risen, while cable channels have responded by making their channels available via streaming, not just tethered to the home TVs.

So my solution has been "both". I have the cable package, and also pay about $30 a month on top of the for the Disney Bundle and Netflix. I also get Peacock for "free" as part of my cable deal.

Mind sharing your costs?
Live Streamer for sports can be grabbed at $35-$65.
Internet of $50.
That's almost $100/month in savings.
05-10-2022 09:49 AM
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Frank the Tank Online
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Post: #6
RE: "Sports networks squeezed by rising costs and fewer subscribers"
(05-10-2022 09:18 AM)Yosef181 Wrote:  The only reason to have cable/satellite anymore is for live sports. If it weren't a requirement where I rent, I wouldn't have it.

That's sort of the Catch-22 that these networks are all in right now.

The biggest reason why people are dropping cable/satellite is due to cost, which is disproportionately driven by networks with live sports.

Yet, simultaneously, the biggest reason why people *keep* cable/satellite is for live sports.

It's similar to the "TINA" ("There is no alternative") concept in investing. That is, people may continue to invest in and drive up the prices of superficially suboptimal assets because all of the other alternatives are seen to be even worse. The stock market over the past year is a classic example. It was pretty widely known that stocks by the middle of 2021 were generally historically overvalued by many metrics like P/E ratio. Yet, the problem was that bond prices and other investments (whether super-conservative like money market accounts or super-risky like Bitcoin) were performing so poorly combined with inflation that it drove people to keep piling into the stock market. When you're essentially losing money with "safe" investments due to various factors (e.g. inflation, rising interest rates, etc.), it means that you have a TINA situation where you need to invest in assets that you may know well are overpriced in the current environment (e.g. stocks and real estate). Even now with how the stock market has performed poorly in 2022 (especially this past week), it's still tough for investors to switch because bonds and other alternative investments simply don't look better by comparison.

That's essentially where TV networks are with respect to sports rights. Sports rights are going up and up and up to levels where they're eating into the profits of those TV networks. However, the problem is that very little else outside of sports is drawing live audiences on TV anymore, which means they're in a TINA situation. In essence, for a TV network today, the only thing worse than having to pay for live sports is not having live sports.
(This post was last modified: 05-10-2022 09:58 AM by Frank the Tank.)
05-10-2022 09:55 AM
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DoubleRSU Offline
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Post: #7
RE: "Sports networks squeezed by rising costs and fewer subscribers"
(05-10-2022 09:49 AM)Scoochpooch1 Wrote:  
(05-10-2022 09:46 AM)quo vadis Wrote:  
(05-10-2022 09:18 AM)Yosef181 Wrote:  The only reason to have cable/satellite anymore is for live sports. If it weren't a requirement where I rent, I wouldn't have it.

I have a heavy cable bill, about $210 a month (which includes my internet service), and yeah, much of what I watch is live sports, but I have shopped around and don't see how streaming alone could save me much money.

IIRC, there was a time maybe 6-7 years ago, when streaming was new and streamers were offering awesome deals, where you could "cut the cord" and save a lot. But as with everything, markets converge, and streaming prices have risen, while cable channels have responded by making their channels available via streaming, not just tethered to the home TVs.

So my solution has been "both". I have the cable package, and also pay about $30 a month on top of the for the Disney Bundle and Netflix. I also get Peacock for "free" as part of my cable deal.

Mind sharing your costs?
Live Streamer for sports can be grabbed at $35-$65.
Internet of $50.
That's almost $100/month in savings.

A lot depends on what sports you watch and how many people you live with. I would love $50 a month internet. I don’t think that’s a typical cost though anymore.
05-10-2022 10:49 AM
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nodak651 Offline
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Post: #8
RE: "Sports networks squeezed by rising costs and fewer subscribers"
(05-10-2022 09:55 AM)Frank the Tank Wrote:  
(05-10-2022 09:18 AM)Yosef181 Wrote:  The only reason to have cable/satellite anymore is for live sports. If it weren't a requirement where I rent, I wouldn't have it.

That's sort of the Catch-22 that these networks are all in right now.

The biggest reason why people are dropping cable/satellite is due to cost, which is disproportionately driven by networks with live sports.

Yet, simultaneously, the biggest reason why people *keep* cable/satellite is for live sports.

It's similar to the "TINA" ("There is no alternative") concept in investing. That is, people may continue to invest in and drive up the prices of superficially suboptimal assets because all of the other alternatives are seen to be even worse. The stock market over the past year is a classic example. It was pretty widely known that stocks by the middle of 2021 were generally historically overvalued by many metrics like P/E ratio. Yet, the problem was that bond prices and other investments (whether super-conservative like money market accounts or super-risky like Bitcoin) were performing so poorly combined with inflation that it drove people to keep piling into the stock market. When you're essentially losing money with "safe" investments due to various factors (e.g. inflation, rising interest rates, etc.), it means that you have a TINA situation where you need to invest in assets that you may know well are overpriced in the current environment (e.g. stocks and real estate). Even now with how the stock market has performed poorly in 2022 (especially this past week), it's still tough for investors to switch because bonds and other alternative investments simply don't look better by comparison.

That's essentially where TV networks are with respect to sports rights. Sports rights are going up and up and up to levels where they're eating into the profits of those TV networks. However, the problem is that very little else outside of sports is drawing live audiences on TV anymore, which means they're in a TINA situation. In essence, for a TV network today, the only thing worse than having to pay for live sports is not having live sports.

Is there a point where leagues like CUSA, Sun Belt, MAC, or potentially even CAA/MVFC/BigSky start to finally get some decent money or air time, simply due to budgeting reasons? Asking because the payouts some of the p5 conferences are getting just seem unsustainable. Is there any point where networks decide to cut costs a little bit? For instance, bottom rung p5 games don't really mean anything, and a sold out Washington Grizzly Stadium in Montana vs a rival in a meaningful game could probably be more exciting and visually appealing to a casual fan. FCS games can occasionally get ok tv ratings, but look at the amount of advertising other games get in comparison as well (none). With a bit of advertising, I could see something like a weekly FCS game of the week do ok, especially if sandwiched between a couple bigger games, and the networks could get the rights for essentially free, which would help with bottom line. Just as an example. I'm not saying this is something that should be done or that it would be worthwhile currently, but with the rising rights costs, you would think that non P5 programs would start to benefit more than they currently are, no?
05-10-2022 11:16 AM
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Big 12 fan too Offline
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Post: #9
RE: "Sports networks squeezed by rising costs and fewer subscribers"
(05-10-2022 09:55 AM)Frank the Tank Wrote:  
(05-10-2022 09:18 AM)Yosef181 Wrote:  The only reason to have cable/satellite anymore is for live sports. If it weren't a requirement where I rent, I wouldn't have it.

That's essentially where TV networks are with respect to sports rights. Sports rights are going up and up and up to levels where they're eating into the profits of those TV networks. However, the problem is that very little else outside of sports is drawing live audiences on TV anymore, which means they're in a TINA situation. In essence, for a TV network today, the only thing worse than having to pay for live sports is not having live sports.

Bringing this back to realignment, why are sports rights going up? Demand increasing from sports being the last appointment television inventory, with very little supply changes. It’s the central principle to that Navigate projections in which all P5s climb.
05-10-2022 11:22 AM
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nodak651 Offline
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Post: #10
RE: "Sports networks squeezed by rising costs and fewer subscribers"
(05-10-2022 11:22 AM)Big 12 fan too Wrote:  
(05-10-2022 09:55 AM)Frank the Tank Wrote:  
(05-10-2022 09:18 AM)Yosef181 Wrote:  The only reason to have cable/satellite anymore is for live sports. If it weren't a requirement where I rent, I wouldn't have it.

That's essentially where TV networks are with respect to sports rights. Sports rights are going up and up and up to levels where they're eating into the profits of those TV networks. However, the problem is that very little else outside of sports is drawing live audiences on TV anymore, which means they're in a TINA situation. In essence, for a TV network today, the only thing worse than having to pay for live sports is not having live sports.

Bringing this back to realignment, why are sports rights going up? Demand increasing from sports being the last appointment television inventory, with very little supply changes. It’s the central principle to that Navigate projections in which all P5s climb.

With this being the case, why is a network like Stadium (formerly fox college sports) not on linear TV? Fox College Sports was on linear tv for a long time, but now when live sports are more important than ever, its predecessor isn't?
05-10-2022 11:45 AM
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Frank the Tank Online
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RE: "Sports networks squeezed by rising costs and fewer subscribers"
(05-10-2022 11:16 AM)nodak651 Wrote:  
(05-10-2022 09:55 AM)Frank the Tank Wrote:  
(05-10-2022 09:18 AM)Yosef181 Wrote:  The only reason to have cable/satellite anymore is for live sports. If it weren't a requirement where I rent, I wouldn't have it.

That's sort of the Catch-22 that these networks are all in right now.

The biggest reason why people are dropping cable/satellite is due to cost, which is disproportionately driven by networks with live sports.

Yet, simultaneously, the biggest reason why people *keep* cable/satellite is for live sports.

It's similar to the "TINA" ("There is no alternative") concept in investing. That is, people may continue to invest in and drive up the prices of superficially suboptimal assets because all of the other alternatives are seen to be even worse. The stock market over the past year is a classic example. It was pretty widely known that stocks by the middle of 2021 were generally historically overvalued by many metrics like P/E ratio. Yet, the problem was that bond prices and other investments (whether super-conservative like money market accounts or super-risky like Bitcoin) were performing so poorly combined with inflation that it drove people to keep piling into the stock market. When you're essentially losing money with "safe" investments due to various factors (e.g. inflation, rising interest rates, etc.), it means that you have a TINA situation where you need to invest in assets that you may know well are overpriced in the current environment (e.g. stocks and real estate). Even now with how the stock market has performed poorly in 2022 (especially this past week), it's still tough for investors to switch because bonds and other alternative investments simply don't look better by comparison.

That's essentially where TV networks are with respect to sports rights. Sports rights are going up and up and up to levels where they're eating into the profits of those TV networks. However, the problem is that very little else outside of sports is drawing live audiences on TV anymore, which means they're in a TINA situation. In essence, for a TV network today, the only thing worse than having to pay for live sports is not having live sports.

Is there a point where leagues like CUSA, Sun Belt, MAC, or potentially even CAA/MVFC/BigSky start to finally get some decent money or air time, simply due to budgeting reasons? Asking because the payouts some of the p5 conferences are getting just seem unsustainable. Is there any point where networks decide to cut costs a little bit? For instance, bottom rung p5 games don't really mean anything, and a sold out Washington Grizzly Stadium in Montana vs a rival in a meaningful game could probably be more exciting and visually appealing to a casual fan. FCS games can occasionally get ok tv ratings, but look at the amount of advertising other games get in comparison as well (none). With a bit of advertising, I could see something like a weekly FCS game of the week do ok, especially if sandwiched between a couple bigger games, and the networks could get the rights for essentially free, which would help with bottom line. Just as an example. I'm not saying this is something that should be done or that it would be worthwhile currently, but with the rising rights costs, you would think that non P5 programs would start to benefit more than they currently are, no?

Unfortunately for the G5, FCS and non-name brand schools, I believe that it's the opposite.

The first thing to note is that it's faulty to believe that the P5 rights fees are unsustainable. In fact, the reality is that P5 rights fees are still *relatively* undervalued when compared to their high ratings, particularly when you compare their ratings to the NBA and MLB. (The NFL is an entirely different category.) What you're seeing now is that the TV networks are realizing this and the P5 rights are really getting to levels where they should have been all along.

Further to this point, the networks and their parents/siblings in the entertainment industry in general aren't cutting costs for the top marquee brands. If anything, the investments in the top marquee brands are higher than ever: see the budgets for movies and TV shows related to Marvel/Star Wars/DC Comics and other blockbuster brands along with the top sports rights such as the NFL, NBA, MLB and, yes, the P5. No one is cutting costs for the top brands because those are the entire drivers for entertainment companies and their respective TV networks and movie studios. The *relative* value of P5 football compared to other forms of entertainment is honestly higher than ever, which is what is driving their rights fees higher.

On the flip side, the entertainment industry fills out the rest of their schedules with cheap content that receive a good ROI. It's why TV networks are inundated with reality shows and movie studios love inexpensive horror movies.

What's getting absolutely cut, though, is everything in between those two extremes. All of those mid-budget Oscar-bait movies of the 1990s (e.g. Good Will Hunting, Shawshank Redemption, etc.) are effectively gone. Those are now low-budget movies that are really intended to be content for streamers like Netflix and Apple if they ever get made at all. It's a similar thing on TV, too, with the mass reduction in actual scripted content that isn't tied to existing IP.

Unfortunately, non-brand name football (which is essentially the G5 and FCS) likely falls into that middle category. While the rights fees might be low, they also still have fixed level production costs and don't draw in large ratings compared to, say, a network-owned reality show that could also conceivably be shown multiple times and/or sent to a streaming service (optimally also owned by that same network).

Now, you could have some exceptions, particularly if there's a 12-team playoff and there ends up being value for, say, a G5 game that has a material impact on the playoff race. We've seen that to some extent in the CFP and BCS era with some AAC and Boise State games. However, the Big 12 backfilling really put a dent into the volume of non-P5 games that will likely have national interest based on brand names themselves.

From an entertainment company perspective, the highest and best use of non-P5 football games would be to fill out streaming services like ESPN+. These are serving niche (as opposed to mass market) audiences that make a lot more sense as streaming properties.

When we say "sports rights fees" are rising, what we really mean is that "sports rights fees for marquee properties" are rising, which would definitely include the P5. It doesn't mean that ALL sports rights fees are going up.
(This post was last modified: 05-10-2022 12:27 PM by Frank the Tank.)
05-10-2022 12:25 PM
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Post: #12
RE: "Sports networks squeezed by rising costs and fewer subscribers"
(05-10-2022 12:25 PM)Frank the Tank Wrote:  
(05-10-2022 11:16 AM)nodak651 Wrote:  
(05-10-2022 09:55 AM)Frank the Tank Wrote:  
(05-10-2022 09:18 AM)Yosef181 Wrote:  The only reason to have cable/satellite anymore is for live sports. If it weren't a requirement where I rent, I wouldn't have it.

That's sort of the Catch-22 that these networks are all in right now.

The biggest reason why people are dropping cable/satellite is due to cost, which is disproportionately driven by networks with live sports.

Yet, simultaneously, the biggest reason why people *keep* cable/satellite is for live sports.

It's similar to the "TINA" ("There is no alternative") concept in investing. That is, people may continue to invest in and drive up the prices of superficially suboptimal assets because all of the other alternatives are seen to be even worse. The stock market over the past year is a classic example. It was pretty widely known that stocks by the middle of 2021 were generally historically overvalued by many metrics like P/E ratio. Yet, the problem was that bond prices and other investments (whether super-conservative like money market accounts or super-risky like Bitcoin) were performing so poorly combined with inflation that it drove people to keep piling into the stock market. When you're essentially losing money with "safe" investments due to various factors (e.g. inflation, rising interest rates, etc.), it means that you have a TINA situation where you need to invest in assets that you may know well are overpriced in the current environment (e.g. stocks and real estate). Even now with how the stock market has performed poorly in 2022 (especially this past week), it's still tough for investors to switch because bonds and other alternative investments simply don't look better by comparison.

That's essentially where TV networks are with respect to sports rights. Sports rights are going up and up and up to levels where they're eating into the profits of those TV networks. However, the problem is that very little else outside of sports is drawing live audiences on TV anymore, which means they're in a TINA situation. In essence, for a TV network today, the only thing worse than having to pay for live sports is not having live sports.

Is there a point where leagues like CUSA, Sun Belt, MAC, or potentially even CAA/MVFC/BigSky start to finally get some decent money or air time, simply due to budgeting reasons? Asking because the payouts some of the p5 conferences are getting just seem unsustainable. Is there any point where networks decide to cut costs a little bit? For instance, bottom rung p5 games don't really mean anything, and a sold out Washington Grizzly Stadium in Montana vs a rival in a meaningful game could probably be more exciting and visually appealing to a casual fan. FCS games can occasionally get ok tv ratings, but look at the amount of advertising other games get in comparison as well (none). With a bit of advertising, I could see something like a weekly FCS game of the week do ok, especially if sandwiched between a couple bigger games, and the networks could get the rights for essentially free, which would help with bottom line. Just as an example. I'm not saying this is something that should be done or that it would be worthwhile currently, but with the rising rights costs, you would think that non P5 programs would start to benefit more than they currently are, no?

Unfortunately for the G5, FCS and non-name brand schools, I believe that it's the opposite.

The first thing to note is that it's faulty to believe that the P5 rights fees are unsustainable. In fact, the reality is that P5 rights fees are still *relatively* undervalued when compared to their high ratings, particularly when you compare their ratings to the NBA and MLB. (The NFL is an entirely different category.) What you're seeing now is that the TV networks are realizing this and the P5 rights are really getting to levels where they should have been all along.

Further to this point, the networks and their parents/siblings in the entertainment industry in general aren't cutting costs for the top marquee brands. If anything, the investments in the top marquee brands are higher than ever: see the budgets for movies and TV shows related to Marvel/Star Wars/DC Comics and other blockbuster brands along with the top sports rights such as the NFL, NBA, MLB and, yes, the P5. No one is cutting costs for the top brands because those are the entire drivers for entertainment companies and their respective TV networks and movie studios. The *relative* value of P5 football compared to other forms of entertainment is honestly higher than ever, which is what is driving their rights fees higher.

On the flip side, the entertainment industry fills out the rest of their schedules with cheap content that receive a good ROI. It's why TV networks are inundated with reality shows and movie studios love inexpensive horror movies.

What's getting absolutely cut, though, is everything in between those two extremes. All of those mid-budget Oscar-bait movies of the 1990s (e.g. Good Will Hunting, Shawshank Redemption, etc.) are effectively gone. Those are now low-budget movies that are really intended to be content for streamers like Netflix and Apple if they ever get made at all. It's a similar thing on TV, too, with the mass reduction in actual scripted content that isn't tied to existing IP.

Unfortunately, non-brand name football (which is essentially the G5 and FCS) likely falls into that middle category. While the rights fees might be low, they also still have fixed level production costs and don't draw in large ratings compared to, say, a network-owned reality show that could also conceivably be shown multiple times and/or sent to a streaming service (optimally also owned by that same network).

Now, you could have some exceptions, particularly if there's a 12-team playoff and there ends up being value for, say, a G5 game that has a material impact on the playoff race. We've seen that to some extent in the CFP and BCS era with some AAC and Boise State games. However, the Big 12 backfilling really put a dent into the volume of non-P5 games that will likely have national interest based on brand names themselves.

From an entertainment company perspective, the highest and best use of non-P5 football games would be to fill out streaming services like ESPN+. These are serving niche (as opposed to mass market) audiences that make a lot more sense as streaming properties.

It's wealth consolidation. The money is getting increased for those that provide big ratings or can bring a big fanbase over that will spend money. Contrarily, if you are a smaller product with a less populous or broad fanbase, the small piece of the pie you used to get is shrinking.

Haves are growing in wealth
Have nots are growing in number
05-10-2022 12:31 PM
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johnbragg Offline
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Post: #13
RE: "Sports networks squeezed by rising costs and fewer subscribers"
(05-10-2022 11:45 AM)nodak651 Wrote:  
(05-10-2022 11:22 AM)Big 12 fan too Wrote:  
(05-10-2022 09:55 AM)Frank the Tank Wrote:  
(05-10-2022 09:18 AM)Yosef181 Wrote:  The only reason to have cable/satellite anymore is for live sports. If it weren't a requirement where I rent, I wouldn't have it.

That's essentially where TV networks are with respect to sports rights. Sports rights are going up and up and up to levels where they're eating into the profits of those TV networks. However, the problem is that very little else outside of sports is drawing live audiences on TV anymore, which means they're in a TINA situation. In essence, for a TV network today, the only thing worse than having to pay for live sports is not having live sports.

Bringing this back to realignment, why are sports rights going up? Demand increasing from sports being the last appointment television inventory, with very little supply changes. It’s the central principle to that Navigate projections in which all P5s climb.

With this being the case, why is a network like Stadium (formerly fox college sports) not on linear TV? Fox College Sports was on linear tv for a long time, but now when live sports are more important than ever, its predecessor isn't?

Depends on exactly what you mean by "linear TV". If you mean broadcast TV, Stadium *is* broadcast TV. It's on your local CW or MyNetwork TV or completely independent station.

Why isn't Stadium linear cable? Because the reason that Stadium exists is that Sinclair could buy up programming really cheap to put on their local TV stations, and maybe sell to other similar stations around the country for peanuts.
05-10-2022 12:37 PM
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AztecEmpire Offline
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Post: #14
RE: "Sports networks squeezed by rising costs and fewer subscribers"
(05-10-2022 12:31 PM)solohawks Wrote:  
(05-10-2022 12:25 PM)Frank the Tank Wrote:  
(05-10-2022 11:16 AM)nodak651 Wrote:  
(05-10-2022 09:55 AM)Frank the Tank Wrote:  
(05-10-2022 09:18 AM)Yosef181 Wrote:  The only reason to have cable/satellite anymore is for live sports. If it weren't a requirement where I rent, I wouldn't have it.

That's sort of the Catch-22 that these networks are all in right now.

The biggest reason why people are dropping cable/satellite is due to cost, which is disproportionately driven by networks with live sports.

Yet, simultaneously, the biggest reason why people *keep* cable/satellite is for live sports.

It's similar to the "TINA" ("There is no alternative") concept in investing. That is, people may continue to invest in and drive up the prices of superficially suboptimal assets because all of the other alternatives are seen to be even worse. The stock market over the past year is a classic example. It was pretty widely known that stocks by the middle of 2021 were generally historically overvalued by many metrics like P/E ratio. Yet, the problem was that bond prices and other investments (whether super-conservative like money market accounts or super-risky like Bitcoin) were performing so poorly combined with inflation that it drove people to keep piling into the stock market. When you're essentially losing money with "safe" investments due to various factors (e.g. inflation, rising interest rates, etc.), it means that you have a TINA situation where you need to invest in assets that you may know well are overpriced in the current environment (e.g. stocks and real estate). Even now with how the stock market has performed poorly in 2022 (especially this past week), it's still tough for investors to switch because bonds and other alternative investments simply don't look better by comparison.

That's essentially where TV networks are with respect to sports rights. Sports rights are going up and up and up to levels where they're eating into the profits of those TV networks. However, the problem is that very little else outside of sports is drawing live audiences on TV anymore, which means they're in a TINA situation. In essence, for a TV network today, the only thing worse than having to pay for live sports is not having live sports.

Is there a point where leagues like CUSA, Sun Belt, MAC, or potentially even CAA/MVFC/BigSky start to finally get some decent money or air time, simply due to budgeting reasons? Asking because the payouts some of the p5 conferences are getting just seem unsustainable. Is there any point where networks decide to cut costs a little bit? For instance, bottom rung p5 games don't really mean anything, and a sold out Washington Grizzly Stadium in Montana vs a rival in a meaningful game could probably be more exciting and visually appealing to a casual fan. FCS games can occasionally get ok tv ratings, but look at the amount of advertising other games get in comparison as well (none). With a bit of advertising, I could see something like a weekly FCS game of the week do ok, especially if sandwiched between a couple bigger games, and the networks could get the rights for essentially free, which would help with bottom line. Just as an example. I'm not saying this is something that should be done or that it would be worthwhile currently, but with the rising rights costs, you would think that non P5 programs would start to benefit more than they currently are, no?

Unfortunately for the G5, FCS and non-name brand schools, I believe that it's the opposite.

The first thing to note is that it's faulty to believe that the P5 rights fees are unsustainable. In fact, the reality is that P5 rights fees are still *relatively* undervalued when compared to their high ratings, particularly when you compare their ratings to the NBA and MLB. (The NFL is an entirely different category.) What you're seeing now is that the TV networks are realizing this and the P5 rights are really getting to levels where they should have been all along.

Further to this point, the networks and their parents/siblings in the entertainment industry in general aren't cutting costs for the top marquee brands. If anything, the investments in the top marquee brands are higher than ever: see the budgets for movies and TV shows related to Marvel/Star Wars/DC Comics and other blockbuster brands along with the top sports rights such as the NFL, NBA, MLB and, yes, the P5. No one is cutting costs for the top brands because those are the entire drivers for entertainment companies and their respective TV networks and movie studios. The *relative* value of P5 football compared to other forms of entertainment is honestly higher than ever, which is what is driving their rights fees higher.

On the flip side, the entertainment industry fills out the rest of their schedules with cheap content that receive a good ROI. It's why TV networks are inundated with reality shows and movie studios love inexpensive horror movies.

What's getting absolutely cut, though, is everything in between those two extremes. All of those mid-budget Oscar-bait movies of the 1990s (e.g. Good Will Hunting, Shawshank Redemption, etc.) are effectively gone. Those are now low-budget movies that are really intended to be content for streamers like Netflix and Apple if they ever get made at all. It's a similar thing on TV, too, with the mass reduction in actual scripted content that isn't tied to existing IP.

Unfortunately, non-brand name football (which is essentially the G5 and FCS) likely falls into that middle category. While the rights fees might be low, they also still have fixed level production costs and don't draw in large ratings compared to, say, a network-owned reality show that could also conceivably be shown multiple times and/or sent to a streaming service (optimally also owned by that same network).

Now, you could have some exceptions, particularly if there's a 12-team playoff and there ends up being value for, say, a G5 game that has a material impact on the playoff race. We've seen that to some extent in the CFP and BCS era with some AAC and Boise State games. However, the Big 12 backfilling really put a dent into the volume of non-P5 games that will likely have national interest based on brand names themselves.

From an entertainment company perspective, the highest and best use of non-P5 football games would be to fill out streaming services like ESPN+. These are serving niche (as opposed to mass market) audiences that make a lot more sense as streaming properties.

It's wealth consolidation. The money is getting increased for those that provide big ratings or can bring a big fanbase over that will spend money. Contrarily, if you are a smaller product with a less populous or broad fanbase, the small piece of the pie you used to get is shrinking.

Haves are growing in wealth
Have nots are growing in number

On one hand, what you and Frank the Tank are saying makes sense...on another, I can't think of a single TV rights deal in D1 FBS that isn't increasing each round unless a conference is decimated with change and FCS callups.

It would seem that the truth is relative and that all live sports rights fees are probably going up because live content has real value but that the increases are more pronounced the closer you get to the top of the market.

If you view conferences like a corp, and poaching like M&A, you could say top-flight CFB has a competition problem created by the industry's own behavior, thereby driving up premiums for top conferences.
(This post was last modified: 05-10-2022 12:55 PM by AztecEmpire.)
05-10-2022 12:53 PM
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CardinalJim Offline
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Post: #15
RE: "Sports networks squeezed by rising costs and fewer subscribers"
(05-10-2022 09:46 AM)quo vadis Wrote:  
(05-10-2022 09:18 AM)Yosef181 Wrote:  The only reason to have cable/satellite anymore is for live sports. If it weren't a requirement where I rent, I wouldn't have it.

I have a heavy cable bill, about $210 a month (which includes my internet service), and yeah, much of what I watch is live sports, but I have shopped around and don't see how streaming alone could save me much money.

IIRC, there was a time maybe 6-7 years ago, when streaming was new and streamers were offering awesome deals, where you could "cut the cord" and save a lot. But as with everything, markets converge, and streaming prices have risen, while cable channels have responded by making their channels available via streaming, not just tethered to the home TVs.

So my solution has been "both". I have the cable package, and also pay about $30 a month on top of the for the Disney Bundle and Netflix. I also get Peacock for "free" as part of my cable deal.

I’m right there with you. We have Spectrum Internet and Spectrum TV, which is a streaming service, for $140. We have Disney, Paramount, Prime and Netflix. We stream Spectrum across a Roku and use a Fire Stick for the other apps. I would ditch the Roku and just use the Firestick but the Roku remote is terrible to use.

I use a number of apps on the Kodi platform to find sports anywhere on the planet.
05-10-2022 12:56 PM
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Soobahk40050 Offline
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Post: #16
RE: "Sports networks squeezed by rising costs and fewer subscribers"
(05-10-2022 12:25 PM)Frank the Tank Wrote:  
(05-10-2022 11:16 AM)nodak651 Wrote:  
(05-10-2022 09:55 AM)Frank the Tank Wrote:  
(05-10-2022 09:18 AM)Yosef181 Wrote:  The only reason to have cable/satellite anymore is for live sports. If it weren't a requirement where I rent, I wouldn't have it.

That's sort of the Catch-22 that these networks are all in right now.

The biggest reason why people are dropping cable/satellite is due to cost, which is disproportionately driven by networks with live sports.

Yet, simultaneously, the biggest reason why people *keep* cable/satellite is for live sports.

It's similar to the "TINA" ("There is no alternative") concept in investing. That is, people may continue to invest in and drive up the prices of superficially suboptimal assets because all of the other alternatives are seen to be even worse. The stock market over the past year is a classic example. It was pretty widely known that stocks by the middle of 2021 were generally historically overvalued by many metrics like P/E ratio. Yet, the problem was that bond prices and other investments (whether super-conservative like money market accounts or super-risky like Bitcoin) were performing so poorly combined with inflation that it drove people to keep piling into the stock market. When you're essentially losing money with "safe" investments due to various factors (e.g. inflation, rising interest rates, etc.), it means that you have a TINA situation where you need to invest in assets that you may know well are overpriced in the current environment (e.g. stocks and real estate). Even now with how the stock market has performed poorly in 2022 (especially this past week), it's still tough for investors to switch because bonds and other alternative investments simply don't look better by comparison.

That's essentially where TV networks are with respect to sports rights. Sports rights are going up and up and up to levels where they're eating into the profits of those TV networks. However, the problem is that very little else outside of sports is drawing live audiences on TV anymore, which means they're in a TINA situation. In essence, for a TV network today, the only thing worse than having to pay for live sports is not having live sports.

Is there a point where leagues like CUSA, Sun Belt, MAC, or potentially even CAA/MVFC/BigSky start to finally get some decent money or air time, simply due to budgeting reasons? Asking because the payouts some of the p5 conferences are getting just seem unsustainable. Is there any point where networks decide to cut costs a little bit? For instance, bottom rung p5 games don't really mean anything, and a sold out Washington Grizzly Stadium in Montana vs a rival in a meaningful game could probably be more exciting and visually appealing to a casual fan. FCS games can occasionally get ok tv ratings, but look at the amount of advertising other games get in comparison as well (none). With a bit of advertising, I could see something like a weekly FCS game of the week do ok, especially if sandwiched between a couple bigger games, and the networks could get the rights for essentially free, which would help with bottom line. Just as an example. I'm not saying this is something that should be done or that it would be worthwhile currently, but with the rising rights costs, you would think that non P5 programs would start to benefit more than they currently are, no?

Unfortunately for the G5, FCS and non-name brand schools, I believe that it's the opposite.

The first thing to note is that it's faulty to believe that the P5 rights fees are unsustainable. In fact, the reality is that P5 rights fees are still *relatively* undervalued when compared to their high ratings, particularly when you compare their ratings to the NBA and MLB. (The NFL is an entirely different category.) What you're seeing now is that the TV networks are realizing this and the P5 rights are really getting to levels where they should have been all along.

Further to this point, the networks and their parents/siblings in the entertainment industry in general aren't cutting costs for the top marquee brands. If anything, the investments in the top marquee brands are higher than ever: see the budgets for movies and TV shows related to Marvel/Star Wars/DC Comics and other blockbuster brands along with the top sports rights such as the NFL, NBA, MLB and, yes, the P5. No one is cutting costs for the top brands because those are the entire drivers for entertainment companies and their respective TV networks and movie studios. The *relative* value of P5 football compared to other forms of entertainment is honestly higher than ever, which is what is driving their rights fees higher.

On the flip side, the entertainment industry fills out the rest of their schedules with cheap content that receive a good ROI. It's why TV networks are inundated with reality shows and movie studios love inexpensive horror movies.

What's getting absolutely cut, though, is everything in between those two extremes. All of those mid-budget Oscar-bait movies of the 1990s (e.g. Good Will Hunting, Shawshank Redemption, etc.) are effectively gone. Those are now low-budget movies that are really intended to be content for streamers like Netflix and Apple if they ever get made at all. It's a similar thing on TV, too, with the mass reduction in actual scripted content that isn't tied to existing IP.

Unfortunately, non-brand name football (which is essentially the G5 and FCS) likely falls into that middle category. While the rights fees might be low, they also still have fixed level production costs and don't draw in large ratings compared to, say, a network-owned reality show that could also conceivably be shown multiple times and/or sent to a streaming service (optimally also owned by that same network).

Now, you could have some exceptions, particularly if there's a 12-team playoff and there ends up being value for, say, a G5 game that has a material impact on the playoff race. We've seen that to some extent in the CFP and BCS era with some AAC and Boise State games. However, the Big 12 backfilling really put a dent into the volume of non-P5 games that will likely have national interest based on brand names themselves.

From an entertainment company perspective, the highest and best use of non-P5 football games would be to fill out streaming services like ESPN+. These are serving niche (as opposed to mass market) audiences that make a lot more sense as streaming properties.

When we say "sports rights fees" are rising, what we really mean is that "sports rights fees for marquee properties" are rising, which would definitely include the P5. It doesn't mean that ALL sports rights fees are going up.

So, in the entertainment industry, just like in the economy writ large, the middle class gets squeezed? That analysis makes a lot of sense. Thanks.
05-10-2022 01:09 PM
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Big 12 fan too Offline
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Post: #17
RE: "Sports networks squeezed by rising costs and fewer subscribers"
I welcomed the networks de facto serving as commissioner in their quest to make a better must-have product. With their margins declining, they need to give people more of what they want.

A top-48 P2, generally split north-south and on historical ties, is a more compelling national product. Add in some philosophical/political disagreements on college athletics facilitating the divide, and you have people picking a side.

We love hating. The vast majority of fans being polarized in a BIG vs SEC split is adding value.

A national sport by conference design, built on regional schedules and history at the division level

With this as the base, add in a “best of rest” conference/middle class to try their hand at the American dream (but in reality antitrust and to keep inventory high for networks). Even one bid to CFP is effectively more access than these 15-30 programs have now. If Baylor or Houston or UCF can win this conference and largely self-fund and recruit their backyard to being a CFP Cinderella, it’s good for the network. Cincy was fed American TV rights while not being a big hit on ratings.
(This post was last modified: 05-10-2022 01:22 PM by Big 12 fan too.)
05-10-2022 01:14 PM
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Scoochpooch1 Offline
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Post: #18
RE: "Sports networks squeezed by rising costs and fewer subscribers"
(05-10-2022 10:49 AM)DoubleRSU Wrote:  
(05-10-2022 09:49 AM)Scoochpooch1 Wrote:  
(05-10-2022 09:46 AM)quo vadis Wrote:  
(05-10-2022 09:18 AM)Yosef181 Wrote:  The only reason to have cable/satellite anymore is for live sports. If it weren't a requirement where I rent, I wouldn't have it.

I have a heavy cable bill, about $210 a month (which includes my internet service), and yeah, much of what I watch is live sports, but I have shopped around and don't see how streaming alone could save me much money.

IIRC, there was a time maybe 6-7 years ago, when streaming was new and streamers were offering awesome deals, where you could "cut the cord" and save a lot. But as with everything, markets converge, and streaming prices have risen, while cable channels have responded by making their channels available via streaming, not just tethered to the home TVs.

So my solution has been "both". I have the cable package, and also pay about $30 a month on top of the for the Disney Bundle and Netflix. I also get Peacock for "free" as part of my cable deal.

Mind sharing your costs?
Live Streamer for sports can be grabbed at $35-$65.
Internet of $50.
That's almost $100/month in savings.

A lot depends on what sports you watch and how many people you live with. I would love $50 a month internet. I don’t think that’s a typical cost though anymore.

Really? That's unfortunate. Is your area have little competition? $50 is pretty much near the max. Not saying this is your case but a lot of people want 17 Gig Internet which is entirely too much hence they overspend.
05-10-2022 01:45 PM
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GreenBison Offline
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Post: #19
RE: "Sports networks squeezed by rising costs and fewer subscribers"
(05-10-2022 09:46 AM)quo vadis Wrote:  
(05-10-2022 09:18 AM)Yosef181 Wrote:  The only reason to have cable/satellite anymore is for live sports. If it weren't a requirement where I rent, I wouldn't have it.

I have a heavy cable bill, about $210 a month (which includes my internet service), and yeah, much of what I watch is live sports, but I have shopped around and don't see how streaming alone could save me much money.

IIRC, there was a time maybe 6-7 years ago, when streaming was new and streamers were offering awesome deals, where you could "cut the cord" and save a lot. But as with everything, markets converge, and streaming prices have risen, while cable channels have responded by making their channels available via streaming, not just tethered to the home TVs.

So my solution has been "both". I have the cable package, and also pay about $30 a month on top of the for the Disney Bundle and Netflix. I also get Peacock for "free" as part of my cable deal.

OTA AntennA (free TV, networks and live sports) along with Sling TV $35 with the ESPNs.
(This post was last modified: 05-10-2022 01:58 PM by GreenBison.)
05-10-2022 01:57 PM
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Wedge Offline
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Post: #20
RE: "Sports networks squeezed by rising costs and fewer subscribers"
(05-10-2022 12:56 PM)CardinalJim Wrote:  We stream Spectrum across a Roku and use a Fire Stick for the other apps. I would ditch the Roku and just use the Firestick but the Roku remote is terrible to use.

Agree that the Roku remote is terrible. I'm tempted to abandon Roku and get an Apple TV box.
05-10-2022 02:06 PM
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