A thread about ESPN/Disney and the future of College Football broadcasting

[Buzzilla]

This is a drum I've been beating for a while now and think it deserves it's own stand alone thread as it appears there are going to be more and more related stories emerging as it all evolves. It is my opinion, and has been for some time, that the entirety of sports TV rights, particularly college football, is in an unsustainable bubble. This is made all the more unsustainable with companies like ESPN and parent company Disney that have lead the way in blowing these bubbles bigger and bigger.

Both ESPN and Disney have major business problems right now as indicated by large scale lay offs, stock declines, massive losses in streaming, movies and other content and a host of various other legal, political and social battles seemingly outside of its core business.

A good place to start the thread is with the growing smoke around Disney spinning off ESPN:
"Disney could soon sell its TV assets as Iger says business 'may not be core' to the company"
https://www.cnbc.com/amp/2023/07/13/disney-ceo-iger-opens-door-to-unloading-tv-assets.html

As the Disney Titanic continues taking on more and more water, it appears ESPN is going to be thrown overboard sooner than later. Should be REAL interesting to see how all of this effects college football, current broadcast rights contracts and the future of the broadcast rights $$$ gravy train.

Stay tuned.

 

[TechRush]

Maybe this is how the ACC is finally ded. Contract broken leading to grant of rights agreement void and all chaos breaks loose.

 

[GTCrew4b]

The Big Ten leadership was so smart.

 

[thegtstunner08]

Maybe this is how the ACC is finally ded. Contract broken leading to grant of rights agreement void and all chaos breaks loose.

I say let the chips fall. Someone who has money and loves the game will save it.

 

[THWUGA]

I say let the chips fall. Someone who has money and loves the game will save it.

They're called SEC fans, who rabbidly buy stadium seats and donate to the athletic associations and NIL funds. And B1G leaders, who foresaw a way to control their own destiny by creating their own broadcast network. The chips have already fallen, the "game" is fine -- and the B1G and SEC are left standing on the same level while the rest of us are the conference fka The Big East.

 

[andrew]

Live sports has increased in value due to a shift in the way people consume entertainment. Literally the only commercials I watch on my TV these days are sports, and the share of people who are just like me is getting higher -- even my computer illiterate grandmother cut the cord recently thanks to her smart TV. So not only do I think the insanely high broadcast rights are justifiable, I think they will continue to grow.

What will change is who is securing those rights. Disney as a company is bloated and ESPN is a family of networks and personalities stuck in a time that is passing them by. So it doesn't surprise me that Disney is having layoffs, and it won't surprise me when they have to give up some of their broadcasting contracts. But that doesn't mean that live sports overall is a bubble.

Look at NFL Sunday Ticket. It was a cornerstone of DirectTV for decades. They paid exorbitant fees to keep it with them. But this year they stopped -- was it because the bubble popped and the high fee wasn't worth it anymore? No. It's beause the value was even higher than what DirectTV was able to get out of it, and YouTube came along and outbid them for it.

The gravy train is steaming ahead just fine. Yes, some companies (and teams/conferences) will be losers as money shifts around, but overall there's no indication that the money is going away any time soon.

 

[GT98]

So not only do I think the insanely high broadcast rights are justifiable, I think they will continue to grow.

What will change is who is securing those rights

This.

If ESPN "blows up" from no longer being part of Disney, it won't affect the SEC/Big 10 that much. Those two teams can likely form their own made for TV super league (that someone will bid on) and maybe change out a few teams (schools). I think that real "losers" in the case of a massive ESPN restructuring/less operating budget is conferences like the ACC/Big 12/Pac 12 and lower as there will be much less money assuredly from whomever will be broadcasting those games.

 

[Buzzilla]

Live sports has increased in value due to a shift in the way people consume entertainment. Literally the only commercials I watch on my TV these days are sports, and the share of people who are just like me is getting higher -- even my computer illiterate grandmother cut the cord recently thanks to her smart TV. So not only do I think the insanely high broadcast rights are justifiable, I think they will continue to grow.

What will change is who is securing those rights. Disney as a company is bloated and ESPN is a family of networks and personalities stuck in a time that is passing them by. So it doesn't surprise me that Disney is having layoffs, and it won't surprise me when they have to give up some of their broadcasting contracts. But that doesn't mean that live sports overall is a bubble.

Look at NFL Sunday Ticket. It was a cornerstone of DirectTV for decades. They paid exorbitant fees to keep it with them. But this year they stopped -- was it because the bubble popped and the high fee wasn't worth it anymore? No. It's beause the value was even higher than what DirectTV was able to get out of it, and YouTube came along and outbid them for it.

The gravy train is steaming ahead just fine. Yes, some companies (and teams/conferences) will be losers as money shifts around, but overall there's no indication that the money is going away any time soon.

Good discussion and you have a well thought out response though we certainly disagree. FWIW, I think YouTube is the obvious destination for all streaming. They have all the necessary resources for being a platform for literally any media content including live streaming sports. I've been a big consumer of YouTube for many years though my preferences are for small content creators that are unique and utilizing their talents independently.

My thoughts are that if YouTube/Google is the platform of last and best resort, and I think it is and will only get stronger, then how much leverage do "premium" content creators, such as the NFL or NCAA sports actually have going forward especially as non-premium content options are growing exponentially?

I think there are going to be only a few platforms left standing when all is done. Amazon is working hard and investing heavily. Apple appears willing to throw money at it. Netflix is a player and could broaden into live event streaming.

Disney is still a player but given that they appear to be heading away from sports content what does that actually say of the profitability at the prices they've had to pay for the rights? It doesn't look good. The long term profitability of "premium content" streaming is becoming more and more suspect.

Youtube/Google can afford to lose money on the NFL in an effort to grow and broaden its viewership reach. DirecTV can't. It will be interesting to see how much YouTube TV begins charging for premium content, how much people are actually willing to pay and what overall viewership growth/decline rates will be going forward.

Additionally with the gates mostly open to anyone that wants to make video content and can afford a camera and a computer, the ocean of content viewing options is going to continue diluting the value of "premium" content including traditional professional and amateur sports. This is only going to get worse especially given the much lower levels of interest of younger demographics in watching traditional sports.

The gravy train is definitely on shaky rails and the Disney/ESPN situation should be a warning to everyone else. There may be other large scale players as mentioned above that are willing to pay the price to grow their market share but I expect they will begin to run into the same issues Disney/ESPN are now experiencing.

 

[GTCrew4b]

Live sports has increased in value due to a shift in the way people consume entertainment. Literally the only commercials I watch on my TV these days are sports, and the share of people who are just like me is getting higher -- even my computer illiterate grandmother cut the cord recently thanks to her smart TV. So not only do I think the insanely high broadcast rights are justifiable, I think they will continue to grow.

What will change is who is securing those rights. Disney as a company is bloated and ESPN is a family of networks and personalities stuck in a time that is passing them by. So it doesn't surprise me that Disney is having layoffs, and it won't surprise me when they have to give up some of their broadcasting contracts. But that doesn't mean that live sports overall is a bubble.

Look at NFL Sunday Ticket. It was a cornerstone of DirectTV for decades. They paid exorbitant fees to keep it with them. But this year they stopped -- was it because the bubble popped and the high fee wasn't worth it anymore? No. It's beause the value was even higher than what DirectTV was able to get out of it, and YouTube came along and outbid them for it.

The gravy train is steaming ahead just fine. Yes, some companies (and teams/conferences) will be losers as money shifts around, but overall there's no indication that the money is going away any time soon.

I dunno. I think we may be a generation away from it. Boomers and Gen X still consume sports en masse but millenials and younger simply don’t.

 

[andrew]

Good discussion and you have a well thought out response though we certainly disagree. FWIW, I think YouTube is the obvious destination for all streaming. They have all the necessary resources for being a platform for literally any media content including live streaming sports. I've been a big consumer of YouTube for many years though my preferences are for small content creators that are unique and utilizing their talents independently.

My thoughts are that if YouTube/Google is the platform of last and best resort, and I think it is and will only get stronger, then how much leverage do "premium" content creators, such as the NFL or NCAA sports actually have going forward especially as non-premium content options are growing exponentially?

I think there are going to be only a few platforms left standing when all is done. Amazon is working hard and investing heavily. Apple appears willing to throw money at it. Netflix is a player and could broaden into live event streaming.

Disney is still a player but given that they appear to be heading away from sports content what does that actually say of the profitability at the prices they've had to pay for the rights? It doesn't look good. The long term profitability of "premium content" streaming is becoming more and more suspect.

Youtube/Google can afford to lose money on the NFL in an effort to grow and broaden its viewership reach. DirecTV can't. It will be interesting to see how much YouTube TV begins charging for premium content, how much people are actually willing to pay and what overall viewership growth/decline rates will be going forward.

Additionally with the gates mostly open to anyone that wants to make video content and can afford a camera and a computer, the ocean of content viewing options is going to continue diluting the value of "premium" content including traditional professional and amateur sports. This is only going to get worse especially given the much lower levels of interest of younger demographics in watching traditional sports.

The gravy train is definitely on shaky rails and the Disney/ESPN situation should be a warning to everyone else. There may be other large scale players as mentioned above that are willing to pay the price to grow their market share but I expect they will begin to run into the same issues Disney/ESPN are now experiencing.

Responses to random parts:

• I disagree that YouTube/Google is the platform of last resort. You named three others; add in Sling, Fubo, etc. Not all of them are likely to survive, but enough of them will to leave a healthy, competitive market that gives sports leagues money. Even if you have only three major players, that's plenty for the price to get bid up.
  
  
• To me, the fact that Disney and DirectTV moving away from sports content doesn't say that sports content is not worth it at that price, it says that the market has shifted and those companies are no longer able to unlock the full value of sports content. YouTube and other streaming services are, because people want (and are willing to pay for) the type of a la carte streaming that older media companies aren't structured to support.
  
  
• The younger demographics' interest is a good point, and the same that @GTCrew4b brought up. I know that has been a huge concern with MLB and NASCAR. But is it really true for sports overall? I think NFL is as popular as ever with younger generations, and the NBA is killing it with social media interation. NASCAR is down but F1 is growing worldwide. I'm not convinced that younger generations aren't interested in sports, but rather that they are only interested in certain sports that cater to their interests (another thing that hurts ESPN's world-of-sports model.)

 

[GTCrew4b]

Expanded sports gambling has helped prop up sports interest in the younger generation but in general I don’t necessarily see the same rabid interest we did before. That being said sports memorabilia market is exploding as Gen X gets to their retirement ages…it is hard to say for sure what’s happening but it certainly feels as though sports is not as big a deal as it used to be.

 

[WracerX]

I think sports are reaping what they have sown. They priced people out of the stadiums, so they lost a generation of kids. It’s not that people are staying home because the experience is better. People are staying home because they can’t afford to attend games. No more little Johnny going to the stadium with dad. Now dad is at home but Johnny is on his phone in another room. There is no connection with the team.

Is the experience better at home? Yes, but they have lost the once a season trip down to the park to take it all in. And without that, kids aren’t interested in watching at home.

 

[Buzzilla]

Responses to random parts:

• I disagree that YouTube/Google is the platform of last resort. You named three others; add in Sling, Fubo, etc. Not all of them are likely to survive, but enough of them will to leave a healthy, competitive market that gives sports leagues money. Even if you have only three major players, that's plenty for the price to get bid up.
  
  
• To me, the fact that Disney and DirectTV moving away from sports content doesn't say that sports content is not worth it at that price, it says that the market has shifted and those companies are no longer able to unlock the full value of sports content. YouTube and other streaming services are, because people want (and are willing to pay for) the type of a la carte streaming that older media companies aren't structured to support.
  
  
• The younger demographics' interest is a good point, and the same that @GTCrew4b brought up. I know that has been a huge concern with MLB and NASCAR. But is it really true for sports overall? I think NFL is as popular as ever with younger generations, and the NBA is killing it with social media interation. NASCAR is down but F1 is growing worldwide. I'm not convinced that younger generations aren't interested in sports, but rather that they are only interested in certain sports that cater to their interests (another thing that hurts ESPN's world-of-sports model.)

Fubo TV is not profitable. Their stock has crashed from $42/share in early 2021 to under $3/share today. They recently raised subscription fees to try and raise more revenue like others in the streaming game. This does not look to me like a company that will be bidding for the NFL. It looks to me like a company headed for bankruptcy like the owner of Bally's did recently.

Dish Network owns Sling. Their stock has crashed from $44/share in April 2021 to under $7/share today. Dish has been hemorrhaging subscribers and Sling has ben stagnate to down in subscriber counts. Dish has recently raised subscription fees last year as well. Again, Dish/Sling is not a player for the bidding up the rights for much of anything especially the NFL.

DirecTV has lost nearly half of it's subscribers since AT&T purchased it in 2015. AT&T sold a stake to an outside company but still owns 70% of DirecTV and it's streaming version. Because of the spin-off they no longer report subscriber counts, but suffice it to say they are very likely not growing. AT&T's stock has fallen from more than $32/share in 2016 to about $13/share today. DirecTV reportedly lost $500million per year on the deal for the NFL Sunday ticket. This is likely why they are no longer a player in bidding up the sports broadcast rights bubble such as the NFL.

YouTubeTV is paying another $500M per year than DirecTV did for a total of $2billion/year for 7 years. They basically outbid Disney, Apple and Amazon who were the only other contenders. I will be surprised if YouTubeTV/Google make any money on this deal. I believe their purpose is to grow subscribers to YouTubeTV and to try and set itself up as the new standard for watching "television" and streamed content. We'll see if they have any better luck than DirecTV or Disney selling these "premium" content sports packages and making a profit.

Disney/ESPN, AT&T/DirecTV and Dish/Sling all got burned or are still getting burned by these sports media rights deals and are heading in the other direction. The new players for streaming content are not traditional media companies. Google (YouTubeTV), Apple and Amazon. These are mega huge technology companies with capital to burn. They can afford to lose money on sports broadcast rights and streaming for now. We'll see for how long.

 

[WracerX]

One advantage Youtube should have is that Youtube was an easy way to share pirated content. I’m assuming they will be better at stopping.

 

[GoBees]

Everything inevitably going to al a carte, as it should.
Delivery "bundlers" will allow you build discounted groupings of programs/channels based on your individually subscribed volume.

 

[Buzzilla]

Everything inevitably going to al a carte, as it should.
Delivery "bundlers" will allow you build discounted groupings of programs/channels based on your individually subscribed volume.

I think this is true which is all the more reason I think these sports broadcast rights deals are in a HUGE bubble. When you have a fraction of the subscribers that once were the revenue drivers for satellite and cable packages AND you're paying more than ever for the content, the price for the al a carte of NFL or college sports is going to get to be brutally expensive. Couple that with declining interest from younger demographics and the proliferation of oceans of free user created content on various platforms and you've got a bubble on your hands.

 

[midatlantech]

Fubo TV is not profitable. Their stock has crashed from $42/share in early 2021 to under $3/share today. They recently raised subscription fees to try and raise more revenue like others in the streaming game. This does not look to me like a company that will be bidding for the NFL. It looks to me like a company headed for bankruptcy like the owner of Bally's did recently.

Dish Network owns Sling. Their stock has crashed from $44/share in April 2021 to under $7/share today. Dish has been hemorrhaging subscribers and Sling has ben stagnate to down in subscriber counts. Dish has recently raised subscription fees last year as well. Again, Dish/Sling is not a player for the bidding up the rights for much of anything especially the NFL.

DirecTV has lost nearly half of it's subscribers since AT&T purchased it in 2015. AT&T sold a stake to an outside company but still owns 70% of DirecTV and it's streaming version. Because of the spin-off they no longer report subscriber counts, but suffice it to say they are very likely not growing. AT&T's stock has fallen from more than $32/share in 2016 to about $13/share today. DirecTV reportedly lost $500million per year on the deal for the NFL Sunday ticket. This is likely why they are no longer a player in bidding up the sports broadcast rights bubble such as the NFL.

YouTubeTV is paying another $500M per year than DirecTV did for a total of $2billion/year for 7 years. They basically outbid Disney, Apple and Amazon who were the only other contenders. I will be surprised if YouTubeTV/Google make any money on this deal. I believe their purpose is to grow subscribers to YouTubeTV and to try and set itself up as the new standard for watching "television" and streamed content. We'll see if they have any better luck than DirecTV or Disney selling these "premium" content sports packages and making a profit.

Disney/ESPN, AT&T/DirecTV and Dish/Sling all got burned or are still getting burned by these sports media rights deals and are heading in the other direction. The new players for streaming content are not traditional media companies. Google (YouTubeTV), Apple and Amazon. These are mega huge technology companies with capital to burn. They can afford to lose money on sports broadcast rights and streaming for now. We'll see for how long.

My son worked in business development for Amazon Twitch and watching from afar has been interesting. (I only get well after the fact news.)

 

[Buzzilla]

My son worked in business development for Amazon Twitch and watching from afar has been interesting. (I only get well after the fact news.)

I'm not a gamer and don't know much about the "e-sports" culture but I do know that live streaming game play of all sorts is turning into big money. The gaming and live streaming demographic is very sought after by advertisers and traditional pro sports leagues including the NFL which has been getting exposure on Amazon's Twitch. Amazon's deal with the NFL ties in here.

I would posit that the future of "sports" entertainment is likely coming from the realm of electronic based competition. I don't have kids and know practically nothing about the millennial and younger generations, but I do see plenty of them and they mostly appear like room dwellers spending most of their waking hours in front of some form of computer screen. It seems like they are drifting off deeper and deeper into this alternate electronic reality. Cue the Black Mirror episode.

Social commentary aside about the terrifying implications of all this, it seems like just another avenue of erosion in the future of traditional pro sports league market share for the likes of the NFL and sadly college football which by all practical measures is now a "pro sport". Most of these gamers and e-sports fans couldn't care less about traditional recreational sports involving some kind of "ball". In fact, most of them have an aversion to traditional sports and the culture around it. They typically aren't athletic types.

As these new "e-sports" categories rise, it's also pretty obvious that traditional media companies are on the way out and fading fast. Good riddance for the most part. Things happen much faster than they use to. It might be shocking how quickly the changes come. The main players for securing content broadcast rights and developing stand alone content are the mega tech corps of Apple, Amazon, Alphabet (google/YT) and OG Netflix. I'm surprised Facebook hasn't jumped in but they are investing elsewhere with mostly crap results.

This marriage of corporate monopolistic technology, user engagement and content ownership and delivery is going well beyond creepy, especially given their government interlacing and the collective penchant for the Orwellian.

I would say traditional pro sports have about 10 years left at the pinnacle of "sports entertainment" content. I think you will see steady erosion, especially given the broader cultural upheaval going on. Traditional sports use to be a collective social touchstone we could all enjoy and participate in that would create and maintain cultural connection for us all. Those days are now gone and drifting further away at an accelerating rate.

I guess as the saying goes, all good things must come to an end. Enjoy it while it lasts.

 

[WracerX]

I'm not a gamer and don't know much about the "e-sports" culture but I do know that live streaming game play of all sorts is turning into big money. The gaming and live streaming demographic is very sought after by advertisers and traditional pro sports leagues including the NFL which has been getting exposure on Amazon's Twitch. Amazon's deal with the NFL ties in here.

I would posit that the future of "sports" entertainment is likely coming from the realm of electronic based competition. I don't have kids and know practically nothing about the millennial and younger generations, but I do see plenty of them and they mostly appear like room dwellers spending most of their waking hours in front of some form of computer screen. It seems like they are drifting off deeper and deeper into this alternate electronic reality. Cue the Black Mirror episode.

Social commentary aside about the terrifying implications of all this, it seems like just another avenue of erosion in the future of traditional pro sports league market share for the likes of the NFL and sadly college football which by all practical measures is now a "pro sport". Most of these gamers and e-sports fans couldn't care less about traditional recreational sports involving some kind of "ball". In fact, most of them have an aversion to traditional sports and the culture around it. They typically aren't athletic types.

As these new "e-sports" categories rise, it's also pretty obvious that traditional media companies are on the way out and fading fast. Good riddance for the most part. Things happen much faster than they use to. It might be shocking how quickly the changes come. The main players for securing content broadcast rights and developing stand alone content are the mega tech corps of Apple, Amazon, Alphabet (google/YT) and OG Netflix. I'm surprised Facebook hasn't jumped in but they are investing elsewhere with mostly crap results.

This marriage of corporate monopolistic technology, user engagement and content ownership and delivery is going well beyond creepy, especially given their government interlacing and the collective penchant for the Orwellian.

I would say traditional pro sports have about 10 years left at the pinnacle of "sports entertainment" content. I think you will see steady erosion, especially given the broader cultural upheaval going on. Traditional sports use to be a collective social touchstone we could all enjoy and participate in that would create and maintain cultural connection for us all. Those days are now gone and drifting further away at an accelerating rate.

I guess as the saying goes, all good things must come to an end. Enjoy it while it lasts.

I have teenage kids. We live in the south and the school is upper middle class/ lower upper class. The school is about as diverse as America in general, except swapping hispanics with asians (all kinds).

They have an esports team that has won the state and competes well every year. The overall support for that team is somewhere between women’s soccer and cross country.

Maybe esports will displace traditional sports, but I don’t see it happening anytime soon.

 

[andrew]

I have teenage kids. We live in the south and the school is upper middle class/ lower upper class. The school is about as diverse as America in general, except swapping hispanics with asians (all kinds).

They have an esports team that has won the state and competes well every year. The overall support for that team is somewhere between women’s soccer and cross country.

Maybe esports will displace traditional sports, but I don’t see it happening anytime soon.

The meme of gamers having an aversion to normal sports and spending all of their hours in front of a screen is also pretty outdated.

Gaming is a pretty mainstream hobby at this point for anyone mid 30s and younger as opposed to being the domain of social outcasts and children like in the 90s.

It's very common to like both gaming and sports, and it's not rare to hear sports talk on video game streams, or to hear pro athletes talking about video games.