This is a pretty amazing data point.
On the flip side, ESPN’s costs for content have skyrocketed to well over $7 billion a year, more than any competitor, according to projections from Boston Consulting Group and SNL Kagan. That compares to $5 billion by Netflix and $4.3 billion by NBC. Rights to “Monday Night Football” alone cost ESPN $1.9 billion a year, not to mention hefty deals with the NCAA and NBA.
That gets back to what I posted yesterday. Even if you credit ESPN with focusing on the core value of its business plan, which is monopolizing live sports (or at least coming as close as possible), the expense is coming up on the edge of what is currently sustainable. Firing 100 talking heads and reporters won’t make a dent in that.
There are two things to take away from Mickey’s current bottom line bleeding. One is finding other ways to control delivery of live sports, which is why you see the WWL scrambling to make its way into the digital domain. The other is re-calibrating what sort of value the content has. The latter is obviously dependent on the former and will take some time to develop, especially when you consider that Mickey is contractually locked into a lot of costs now.
The former is not without its perils, either. Consider the story that led of the linked article.
A friend in Little Rock decided to cut the cord when he moved. He planned to do without cable TV altogether, at least until college football season began.
His thinking reflected one of cable’s last hopes as viewers increasingly rely on streaming, social media and even that ancient throwback, the free airwaves.
For years, sports was a deal-saver. For live events, you had to have cable, and ESPN was the giant holding the strings keeping millions of fans tethered.
But when college football season rolled around in September, my friend surprised himself. “I never went back to cable,” he said. “I was able to go to friends’ houses, or to bars, to see games. I could watch clips on my phone. I also could learn not to give a care.” OK, he used an earthier word than “care.”
Sure, it’s just one unnamed friend. The story struck a chord with me, nonetheless. You see, I’m dipping my toes into cord-cutting waters. I’m dumping my satellite provider and going to a package of high-speed Internet and local stations to get my sporting fix. I’ll pick up access to ESPN and the SEC Network through Sling TV for football season and dump what I don’t need during the rest of the year.
I’ll be curious to see if going with little sports broadcast access for half a year has a similar impact on my viewing habits. It sort of gives a whole new meaning to cord-cutting, doesn’t it?
If I were Greg Sankey, I’d be a little concerned.
Get The Picture 
I haven’t had cable since 2008. I also go to bars or friends’ houses to watch games I want to see on ESPN.
I watched this year’s NCG on my laptop for free by downloading a free trial of “Sling TV”. It was easy and I LOVED watching the game that way because the split screen at the bottom of the main screen showed the two head coaches for the whole game. Two dedicated shots – one of Saban, one of Dabo – that never left them. Loved it.
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That last bit about not caring I think is ESPN’s (and CFB’s) real problem. Losing fans is worse than losing viewers. The next time these contracts roll around, they aren’t going to be nearly as lucrative. A loss of fans also means a loss of licensing revenue, etc. These huge athletic dept budgets are going to have shrink. With universities already feeling enrollment pressure, there lilely won’t be a lot of support to reverse that income stream.
I think the golden goose is already in the death throes; it’s just early.
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You’ve hit it, “not caring” is growing.
We cut the cable over 4 years ago & I was admittedly nervous. The cut was right after the Super Bowl & by the time football season rolled around I was used to not having cable. In fact I liked the freedom from TV. For years I had muted the tv broadcast due to the ESPN diarrhea of the mouth, so it was quite easy to pay less attention to college football.
Coinciding w/ the cut was the spending spree in college athletics, football in particular. Topping it off is the wasteful spending for the barn so our pampered players can escape the summer heat & the planned stadium renovations of a locker room that’s used maybe 8 times a year & a recruiting center to blow more smoke up the backsides of high school kids.
Giving gov’t employees (our athletic dept) an endless stream of money to throw around needlessly while ignoring stadium issues that the paying fans suffer through will further fuel the problem.
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re: Not Caring
ESPN and other providers have ruined the football viewing experience – too many extended breaks due to commercials. I went from a football junkie – Georgia fan to a desultory viewer. Cut the cord and you won’t go back – or watch nearly as much football – and you won’t miss it.
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Ding ding ding. This is ESPNs real problem: the rights fee is a ginormous fixed expense that they can’t get out from under.
Any other explanation is agenda driven bullshit. It’s simply that they were sloppy in the bidding process and now have a mess on their hands.
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$1.9 billion dollars for the rights to just Monday Night Football? 16 or 17 games, of questionable national interest, on a weekday night? Who in the hell negotiated that deal for ESPN? Then they have all the production costs on top of that. Does that mean someone at the Big 3 networks were matching them at $1.75 billion? Yeah, someone handed a teenager the keys to the sports car. That seems irresponsible to me, and Disney is their manager so the irrational exuberance falls on them too. “Make it rain” to the tenth power, iyam.
I do appreciate all the cord cutting approaches everyone is contributing as I can see me going in that direction myself one day, and my daughter and her husband are already there. I don’t have all the options most of you do so I will have to wait until I do, and by then there will be additional options. The idea of watching at somewhere away from home will not work for me because I watch for about 14 hours every Saturday and need access to your several channels, plus control of your remote.
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Exactly. This. Plus, where was the NFL going to go and what was the next highest bid? ESPN bid against themselves bc they thought the gravy train would never stop. They didn’t see millennial cord cutting coming.
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Been giving my tickets to my kids for years. Switched over to smart TV two years ago. Watch games at a friend’s house if the weather isn’t conducive to fishing and listen on the radio if I’m on the lake. Five years ago I watched every snap of the ball. I don’t miss it. I stopped living and dying with the Dawgs after the 2008 UF beat down and lost my passion once I realized BM wasn’t willing to keep up in the facilities arms race. I used to check every CFB site I could and now GTP is my only source. Blah, blah.
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Over the air HD TV, combined with Sling TV and Netflix/Hulu/Amazon is the way to go. I pay the extra $5 for ESPN during football season, then dump it afterwards. Total monthly cost is around $50, not counting my internet which I would have anyway. We cut the cord a few years ago and are never, ever going back.
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Cut the cord after the first Alabama Clemson championship game. Haven’t missed it a beat. I now enjoy being outside on fall afternoons and listening to the game while hunting or doing yard work. Ill check out the game later on you tube or if a really good one, I will go to a friends house.
And this is strange…I don’t miss it at all and I thought I would. Certainly don’t miss the $120 a month in tv bills!
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My first lesson in not giving a shit anymore was after the MLB had the strike. I grew up a diehard Braves fan, watched almost every game, and went to a few games a year. The strike year I tuned it out and did other things. I never went back and can’t tell you a single player on the team today. I look back at that time, and it’s still amazing that a hardcore fan like me just stopped being a fan.
I see it coming with CFB too. I cut the cord a decade ago after the cable company tried to screw me. No TV caused a shift in what we did with our spare time. Now I get sling tv for the CFB season to watch the Dawgs and a few other games. I don’t watch anything else. It’s not to hard to see a day when I get frustrated enough and take a break from CFB, and I doubt I come back.
I know McGarrity doesn’t give a shit about me, but he should. I’m an alumni, almost everybody in my wife’s and my family are alumni, I had season tickets, etc. I’m your classic bleeds red and black guy. The problem for McGarrity is, who replaces me? It’s hard to get into Georgia these days, Atlanta is full of people from all over the world without ties to the school, and he makes it harder to stay engaged.
Kirby better start winning.
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Agree with you on all points. Especially your point about Atlanta and alumni in general.
To me the last stronghold of Dawgnation is South Georgia. But the problem is none of the alumni kids are going to Georgia. Everyone I know have kids going to auburn, Alabama or ole miss. How are our grandkids going to be Dawgs if there momma or daddy have no real ties to Athens?
That disturbs me more than any questions re: cord cutting, can Kirby win, will The GA Way ever get out of the way, etc. Also the economic impact of the kids (girls)with family money leave south ga for other school because their $$$ will now be in Alabama or Mississippi?
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I actually see some hope in that. UGA still has passionate alums but the new blood can change the UGA way. A little competition for your donation dollar and ticket purchase could improve the focus in Athens.
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I have no preference of what other people choose to do here, but I do think that going to a bar to watch football in the name of saving $$ makes no sense unless that’s already your plan. Bear with me here……you’re going to have to pay for internet one way or another, so dropping cable saves you maybe $75 a month ($900 per year). I spend maybe $25 per game to cook up some snacks or a meal, buy some beers, and plop down on the couch to watch the UGA game (and any other games from noon until I fall asleep)…..so, somewhere between 12-15 (hey, a guy can dream) times a year costing at most $375, heck make it $500 just to say we went overboard a couple of weeks. I don’t know about all of you but going to a bar for 4+ hours (and that’s if you only watch the UGA game) is going to cost me somewhere around $50-$100 (add in the wife and kid and we’re looking at $100+) to eat and drink……..again with 12-15 games this comes out to somewhere between $600 and $1,500, effectively erasing all savings you made from cutting cable. And that’s just for watching UGA games……no MACtion, no ACC Thursday-Friday game of the week, no Bama-Auburn, no UF-LSU, no watching our rivals lose, no watching our future opponents, no basketball, baseball, NFL games, hockey, etc .If it works for you, that’s great! I just don’t see the savings when you actually add it all up. From the comments above, most of you who cut the cord seem to be cutting out sports or college football altogether more than just the cord. Maybe it works better under those scenarios.
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Agree, folks like to think they are saving money…they are just spending it differently….
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This is what made up my mind. ESPN/SEC Network shitcanned Kaylee Hartung to keep Tiny Tears, the GPOOE™, gainfully employed and ever in our consciousness for when they run him in the 2018 US Senate race in Florida, America’s Wang State. I’m sick of subsidizing his undeserved paycheck.
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I feel as you do, but I will never worry about Kaylee Hartung lacking for anything to do, what vacation spots she wants to visit, what restaurants she can afford….anything. She will always land on her cute little feet. I just hate she won’t be on TV games that I like to watch. I never really see anything that has Tebow on it, not sure what he actually does other than the pre-game bit on the SECN on Saturdays. Don’t believe he has been on the broadcast crew for any game I have watched.
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Welcome to the club.
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That’s a bold move Senator, let’s see if it pays off watching the OCHO.
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I cut the cord about a year ago. I use a streaming device for most of my viewing pleasure. I just use a friends login info to get the apps I want like ESPN, AMC, and a bunch others. It’s great. Of course, if my friend ever decides to cut the cord I’m going to have to find someone else. Or I could go to one of the streaming services like Playstation Vue, Sling TV or something similar. But I don’t think I will ever go back to traditional cable or satellite unless it was to share with a group that are all contributing and we could all use the login info to get the apps I want (that’s not a half bad idea now that I think about it).
Funny thing is, I actually watch more of the SEC network on the Watch ESPN app than I did before. The live shows from all the ESPN family of channels show up in one place and occasionally the SEC Network will have something that I’m interested in. Before, the only time I would think of the SEC network was when I knew something was on I wanted to watch. Out side of the football and basketball seasons I would forget to even look since it was channel 600 and something.
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I’m gonna need you Gen Xers and Baby Boomers to go back to cable and satellite so that chord cutting costs stay low for us Millenials. Thanks
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