If you’re wondering how Disney’s stock price could decline in the face of record breaking numbers from the new Star Wars flick, look no further than genius calls like the Longhorn Network.
That’s not to say ESPN’s future is doomed. But it is an indication that viewers’ wallets aren’t as bottomless as school presidents and athletic directors assume them to be… not that any of them are likely to be paying attention to this. Yet, anyway.
Get The Picture 
People talk about college football experiencing a bubble, because of rising coaching salaries, the facilities arms’ races, etc. I don’t agree that we’re in a bubble in a traditional sense….meaning a bubble that’s going to burst at some point and everything comes crashing down. There’s just too much demand for that.
However……..I really do think we’re approaching a “ceiling”. TV money has been the driver in all this, and as ESPN keeps losing subscribers, seeing less return on things like the LHN, and so forth, there just can’t be that many increases in money coming in the future. I’m not saying the next round of TV contracts will see a big decrease, I’m just saying I don’t think we’re gonna see the big increases that you usually see from one contract to the next. Plus as more and more of a push to funnel money to the athletes moves forward, I really do think we’re gonna see more fiscal restraint from most programs across the country. There’s always gonna be your outliers though, for sure.
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This is kinda of a spinoff on your point but do you think ESPN starting to mix politics and other forms of entertainment in with sports is a result of those losses and the cause of those losses?
I’ll be honest…the whole “courage” award to Bruce Jenner thing was the final straw for me. That and running Cowherd off for being honest. I don’t care one bit about what Bruce Jenner does but political agendas have no place in sports, imo. Honestly, they’ve almost gone to a FOX level of agenda pushing.
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They ran Cowherd off for wanting 3x what he was worth. Pure capitalism. The idea that he was done in by political correctness is just Cowherd catering to an audience.
American Media is a money whore. That is their sole agenda.
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Cowherd has already negotiated a contract with Fox Radio and was working his last two weeks of his ESPN contract when ESPN canned him. ESPN was looking to do so since it did not want Cowherd’s lame duck period at ESPN to be a promo for Fox radio.
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Somehow, given his whole family tv show thing, I think Bruce is faking it. When he goes full “vaginal ” I’ll believe it. Would you pretend to be a girl for several million?
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*result of those losses OR the cause of those losses
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The unbundling of cable shows will kill channels like this if/when it happens
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To that end, you ought to check out the comments under the first article. Hilarious.
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I dont think that Disney is really that expensive right here with a forward PE ratio of 17. I also know that live sports is about the only thing that you can sell advertising for on TV any more.
As someone who owns disney and has owned them for a while, I am not that concerned with how things are looking with the LHN or ESPN.
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From the article: “Cable networks, led by ESPN, account for 44% of the company’s operating income.”
The New York Times and Washington Post companies were excellent investments for decades. But shit changes. Just saying.
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Well, if you removed Disney channels from cable TV would there be much left worth buying cable for? Imagine the impact to middlemen comcast, at&t, etc. if Disney-owned channels were removed. My granddaughter would storm the cable offices if she didn’t get her daily dose of princesses. I think DisneyCo is far better diversified and situated than cable providers or conferences/colleges if/when a downturn or change in the media market materializes.
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Disney is pretty diversified when it comes to revenue. They also just beat on their 4th quarter EPS which was helped by stronger ad revenues from ESPN and ABC. Cable revenue was up 12% YoY.
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ESPN (and I suppose Fox Sports, too) seem afraid to test the a la carte/on demand waters. This is understandable considering how much money they’ve made off their current model, but it seems like they’re going to have to change at some point in the relatively near future. I’m too lazy to do the research, but wonder how much a la carte subscriptions and on demand broadcasts would cost (i.e., how much individuals would need to pay to match what a network makes off bundling). I also wonder if there would be packages for certain programming (college football, college hoops, MLB, etc.) or offer only a single, all-inclusive product.
Of course, a la carte/on demand probably would severely compromise the LHN – and maybe even the Big Ten Network. There just doesn’t seem to be enough demand to support them independent of bundling. I doubt there’d be enough people willing to pay the subscription rates networks would feel compelled to charge to keep the LHN etc. going concerns.
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Just wondering…would unbundling really be cheaper in the long run? If ESPN can narrowly focus the purchase for each P5 team we might find we’re paying $20 per game to watch on TV/Web. It’s all the bundled subscribers paying the freight now so dedicated fans might be paying a lot more for their “premium” choices. Just wondering…
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I saw an article somewher the lasty year that compared the cost to the consumer of buying the sports channels ala carte versus the bundled prices and the article said that it would cost you about 3 times as much to get ESPN, ESPN 2 and ESPNU.
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Interesting that it may be that much. I think certain products, like SEC football and ACC and Big 10 basketball, could garner enough subscribers to make a decent return, but can’t think of too much else that would (maybe PAC12 and Big12 football and basketball?). I don’t know if that’s a bad thing necessarily – for example, it’s not going to ruin my weekend if the Nevada-New Mexico game isn’t on TV – but it definitely would mean an end to the current gravy train.
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The Longhorn Network is the TV equivalent of the Pearl Jam station on Sirius. Good band, but not nearly enough quality material for their own station.
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You might be able to say the same about the SEC, ACC, Big 10, etc networks. Honestly, how much would anyone be willing to pay to see the worst conference matchups on a given Saturday and watch 6 days of idiot talking heads like Finebaum?
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