If you’re looking for a silver lining in what ESPN’s current troubles may mean for the value of future college football broadcast rights, look no further than this.
The future front in the cable-digital war is a likely reduction in rights fees. For all but the most premium content, prices are likely to drop. One lawyer present for the negotiations chuckles when he recalls ESPN’s most recent NBA contract. “If that deal was being done today, it would look much different…. We’re talking 30%-less different.” That deal, mind you, was made 16 months ago.
In a world of fragmented viewership, professional leagues will try to make up the decline in revenue in other ways. That means finding new partners. (Amazon, Twitter and Verizon have all made recent deals to stream NFL games.) Leagues can—and will—reduce labor costs (that is, player salaries) when revenues fall. They can tinker with ticket pricing. They can attempt to penetrate new markets, as the NBA has in China and India.
College athletics, though, is different. For one, there are no player salaries to slash…
Well, how convenient.
What happens when the rights-fee bubble does burst? And what happens if student-athletes ever become salaried employees?
The antitrust exemption argument just wrote itself. Thanks, Mickey!