Consider this shock therapy to get you going this morning.
Category Archives: ESPN Is The Devil
A clash of business models between ESPN and… its owner?
Disney’s big dilemma for ESPN is whether and when to fully embrace a future without cable.
Broadcast and cable networks still make billions of dollars per year from the traditional TV model. ESPN is a huge beneficiary, because media companies earn monthly subscriber fees from pay-TV providers regardless of how many people watch their programming. Niche channels make just a few cents a month per subscriber, while sports networks charge several dollars.
Disney makes more money from cable subscribers than any other company, and that’s solely because of ESPN. ESPN and sister network ESPN2 charge nearly $10 per month combined, according to research firm Kagan, a unit of S&P Global Market Intelligence. That’s at least four times more than almost every other national broadcast or cable network, according to Kagan.
Disney requires pay-TV providers to include ESPN as part of their most popular cable packages. It’s a no-brainer for TV providers, who wouldn’t dare drop ESPN.
Meanwhile, the non-sports world is cutting the cord.
And why is that a clash?
While Disney makes more than $10 a month per subscriber for sports, it makes far less for entertainment networks such as Disney Channel and FX, which draw lower audiences and don’t command high advertising rates.
If Disney can get a cord cutter to pay $8 per month for Disney+ and $6 for Hulu, it’s a huge win for the company.
The reverse is true for ESPN. Swapping an ESPN subscriber for an ESPN+ customer, who contributes average revenue of less than $5 per month, is a significant loss for Disney. ESPN+ is a streaming service with limited content.
Disney Chairman Bob Iger, who was CEO until last year, told investors when he launched Disney+ that Disney was “all in” on streaming video.
But ESPN isn’t. ESPN’s strategy is to cling to the cable bundle for as long as possible, knowing it can draw potentially billions of dollars from U.S. households that are each paying $120 for the network even if they never watch it.
Some analysts have even questioned whether Disney should spin off ESPN, allowing Chapek to focus more clearly on streaming. An ex-Disney executive, who recently left the company and asked not to be named, said there’s “strategic misalignment” between the parent company and ESPN, and the businesses no longer belong together because Wall Street doesn’t look kindly on declining assets. The executive said having ties to the legacy bundle will weigh down a company’s stock multiple.
Mickey rakes in $9 billion — that’s billion, with a “b” — from carriage fees, plus billions more in advertising. That’s a lot of jack, but the key fact buried in there is the money it earns from people paying for ESPN who don’t watch it. What happens to the bottom line as those folks steadily leave for a more a la carte approach with streaming? Well, one thing you can bet on is that Disney ain’t giving that money up without a fight.
Should the number of pay-TV bundle subscribers drop to a level well under 50 million U.S. households, Disney would likely take ESPN to consumers in a more complete streaming package, said two people with knowledge of the company’s plans. At that point, the economics would flip, as most of the people paying for linear TV would be sports fans. Disney could likely make more from a full-service sports streaming service than it would make in a wholesale pay-TV distribution model.
In other words, prepare to get your asses charged off, sports fans.
Er’rybody loves Athens.
Bill Hancock ain’t worried about playoff expansion.
“We have time, because if the event is going to change before the end of the term, the end of the 12 years, we have three or four months,” Hancock said. “If it’s going to change in Year 13, then we have a couple of years.”
The 10 FBS commissioners and Notre Dame athletic director Jack Swarbrick met for about two hours in a hotel conference room near the Big Ten headquarters, and the CFP’s board of managers, which is comprised of the 11 presidents and chancellors who have the power to change the playoff, joined them via video conference for the second half of the meeting.
For once, he’s probably right. There’s simply too much money in a 12-team format for them to walk away, as much as I wish they would.
At least it sounds like there’s some bad news for Mickey.
… They also discussed media rights, but Hancock said ESPN television executives were not a part of Tuesday’s discussions.
“The format will be done before television,” Hancock said.
If the playoff format were to change before then, ESPN would have first rights to any new games. If college football’s power brokers are determined to take the playoff to multiple media entities as a way of maximizing revenue, it would need to wait until after 2025 or work out an arrangement with ESPN.
“In last week’s meeting, it became clear for the first time that all 11 members of the management committee now believe we have to have multiple distributors of our postseason content,” one source with knowledge of the discussions said.
My only question is what happens if (when?) ESPN outbids everyone else at the table for the whole enchilada. Would these people really take less money just to keep someone like Fox in play? Color me skeptical.
A couple of really good points from Seth Emerson:
In other words, we fans may not like it, but ESPN loves it.
Top-ten match up, College GameDay and this:
Kinda makes you wonder how often that particular trifecta hits…
I don’t expect it to last, but Georgia finds itself on top of this week’s ESPN’s FPI rankings, at 26.8, and has the highest chance of winning out in the regular season (24.1%) and making the CFP field (84.2%).
Yeah, that and five bucks will get you a Starbucks latte, but since these are the people driving the media narrative…
UPDATE: Well, hayul. Georgia’s taken the top spot in Bill Connelly’s SP+ rankings, too.
A new No. 1
While Alabama has certainly done very little wrong thus far — the Tide jumped out to a 35-0 lead in just 18 minutes against Southern Miss on Saturday and cruised, 63-14 — the Tide have ceded their No. 1 ranking, at least temporarily. Kirby Smart’s Georgia Bulldogs have been absolutely ruthless; for much of Saturday’s 62-0 win over Vanderbilt, it looked as if the Dawgs would finish with more points than Vandy had yards. As with ESPN’s FPI, this was enough to bump UGA just ahead of Bama.
Georgia beats Clemson and ESPN’s FPI rewards/punishes them both by dropping the Tigers to second and bumping the Dawgs up to fifth. Oh, wait, that’s where they were before the game.
Well, heavens to Betsy, I’m old enough to remember just *** checks notes *** three days ago that Pete Thamel and Dan Wetzel were warning all of us that scheduling hell was about to be unleashed on the poor ol’ SEC.
The new scheduling should create additional marquee games and perhaps increased television money, while potentially squeezing the SEC in non-conference scheduling.
Four ACC teams have annual games with in-state SEC rivals — Clemson-South Carolina, Georgia Tech-Georgia, Florida State-Florida and Louisville-Kentucky. Those games would continue, but there would be a decided lack of available non-conference dates for other SEC teams seeking major opponents.
You mean like this, fellas?
The cherry on top of that particular sundae is putting the game on ESPN. That’ll show ’em the Alliance means business!
And even when they’re not, it appears. Curious, indeed.
He certainly has his share of whiffs, but this ain’t one of them.
… I just think college football has always been different. It’s always been different. And going this route, which is where it’s going to go, so it doesn’t really matter what I think. If it’s fan-driven, money-driven, whatever… I’ve just always thought college football was unique. And the unintended consequences when we went from the BCS to the four-team playoff, nobody was opting out when it was the BCS.
“Those bowl games were important, finishing your season, all those type of things. I think, the more you do this, you become just like the NFL, or even the NBA. Football is not a tournament sport, first of all. This thing isn’t built that way. I think there’s going to be more and more unintended consequences. I wouldn’t be surprised to see kids opting out of the playoffs if you go to 12 [teams in playoffs], to be honest with you.
“My big thing is, now all of the sudden, again, you’re undefeated, you’re in the playoff, and you got this rivalry game at the end… Well, yeah, you want to win the rivalry game, but do you really want to play Trevor Lawrence in that game? And you got the playoff next week, and you know you’re in it? Just like what you see if the NFL. It’s all about the playoffs.
“Just like in basketball… No one watches regular-season basketball. They watch the playoffs. But, if that’s the model we’re going to, I think there’s going to be some changes. Ultimately, I think there’s going to be some type of mega-conference—40, 50 teams, or something like that… 12, 14-team playoff.
“Whatever the rules are, we’ll embrace them and go to work on them. I’m just not a huge fan of it. And some people will get mad and say, “Well, you’ve been in the playoffs.” And, I always say, “If we can get in with four [teams], we can get in with 12.” So, it’s not going to decrease our odds. It makes it more of the same [as basketball, NFL, etc.] than different and unique. And, college football has always been different and unique. That’s just my opinion. I’m in the very small minority when it comes to that.”
I don’t think the minority is as small as he thinks it is. The real problem is that making college football’s postseason more like other sports isn’t a bug for ESPN. It’s a feature.