Stewart Mandel looks at conference revenue in the next 10 years
- Thread starter CarrollCyclone
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"These estimates are based on historical growth rates."
Taking a present trend and assuming it continues on forever in some sort of linear or exponential fashion is the worst kind of reasoning.
Yeah, drawing lines is not good forecasting.
To really understand where something is going, you need to understand the structural pushes and pulls and how they interact with one another.
I do not see much sign the projection above is doing that save for saying the playoff expansion would bring in more revenues, which it would.
I wonder if he has accounted for the increasing trend in cord cutting?
Personally, I think we are getting close to the high water mark for media revenue in all athletics. I'm solely basing that on the growing number of people I talk to who are becoming less interested in seeing their hard earned money go to what they perceive is a group of entitled, self centered, and in the case of pro sports overpaid athletes.
Personally, I think we are getting close to the high water mark for media revenue in all athletics. I'm solely basing that on the growing number of people I talk to who are becoming less interested in seeing their hard earned money go to what they perceive is a group of entitled, self centered, and in the case of pro sports overpaid athletes.
And if anything, i think i'd expect a change here.
The last round of big contracts and realignment was driven by cable markets. If you had X people in your footprint you could get $X*Y from the local cable providers.
With more and more cutting the cord and with streaming options becoming part of the game, i think we're going to go back to a more traditional model- how many viewers are you actually bringing to the table. How many subscribers to the streaming service are you bringing?
I think that could be beneficial for the big 12, which exists in a lot of areas with smaller populations but rabid college fanbases, meaning they'll do better numbers with this metric than they did by population alone.
I would love to believe this but the amount of ******** around ESPN+ and that $5 cover charge was unreal.
I can't find it. I don't have net fast enough to stream it. What channel is ESPN+? I'm not paying $5 for what I used to get for free back in 1987
Did you read the article and understand the context which explains the pushes and pulls?
There is nothing to suggest that the value of premium live sports content like CFB is going to decrease or flatten, even with cord cutting. Google/YouTube, Amazon and/or Apple will likely become new entrants in premium live sports production. Apple has already expressed interest in P12 rights and I am guessing they or one of the other two will eventually buy out the PACN and perhaps bid on B12 content as well. New entrants will drive up the price so I anticipate that ESPN and Fox will make every effort to lock in pricing for the SEC and B10 in advance of the 3 FAANGs potentially bidding on those rights and that will likely drive up bidding on B12 and P12 inventory. The ACC is hosed with their long term deal with ESPN already in place and maybe the only way they can alter their contract is adding Notre Dame as a full FB member. And if that happens, both NBC and CBS will have big holes to fill for their Saturday fall programming.
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Here's the thing though - how do you know that ESPN and Fox are willing to continue to pay the current rates? We already know that the current deals have led to ESPN laying off many employees in the cord cutting environment. We also should not expect any of the streaming companies to be able to compete with the traditional broadcasters on price unless it comes down from today's price.
ESPN and Fox sports are still heavily subsidized by the general cable subscribers, Netflix, Google, or Amazon college sports would not be. Because there are millions of people paying for the traditional broadcasters without watching, they can afford to pay more than someone like Google who would only be able to pay for the content based on the revenue they get from paying subscribers who have intentionally chosen to buy sports content. Apple is only offering to buy the PAC12 rights because they are going to be available at a huge discount. The league is down, viewership is down, and their own network failed/is failing.
That said, I do think the effects of cord cutting are being somewhat exaggerated. Think about what most of us have done - we bought services like Hulu Live TV, Youtube TV, etc that still bundle in channels we don't watch. So the sports channels will most likely still be subsidized to some degree going forward.
Look at what some of these streaming services have paid for exclusive rights to old tv shows ($200 million/year for Big Bang?). It’s plausible top viewership conferences like the SEC and Big10 could maintain their current levels imo. You’ll have more bidders, and bundled live sports is still the most premium product. Imagine if the Big 10 and SEC bundled together? With their large fanbases and population centers, the arms race to get exclusive rights would facilitate keeping them whole to the current revenue mechanisms
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It's also the only thing that western society seems capable of understanding. The eastern cultures understand cycles a heck if a lot better.
I would argue those streaming services are currently being subsidized in another way, either through the unrelated profits of their parent companies (e.g., Google's advertising and search functions) or by investors willing to take losses in the short-term to build up market share before raising prices/gaining profitability sometime later.
I am not sure that plan is going to work, but that is at least the plan. There might come a point where Google's virtual monopoly is broken by a competitor, regulators, or infighting over control of the company, and investors might eventually tire of those losses when they feel profits are never coming. Things can change quickly.
There are way too many moving parts here to draw a straight line like the above.
It's not so much media love as much as it is those two leagues have massive schools with massive fan bases in massive population centers. Outside of Texas, the B12 is pretty "rural" by comparison and I'm glad the B12 has been able to put itself into a position to be third in the revenue totem pole.
Mandel mentions cord cutting in his piece
“The cable industry has been a godsend for college athletics,” said Tranghese. “The question is, as the number of cable households, whether it’s ESPN or Fox, goes down, what happens to their ability to pay that top dollar?”
However, cord-cutting was well underway a few years ago when ESPN and FOX ponied up an average $440 million a year combined for the Big Ten’s Tier 1 and 2 rights, providing its schools a roughly 40-percent spike in revenue distribution when the deal commenced in 2017. In opting for a relatively short, six-year deal, then-commissioner Jim Delany made a bet on the marketplace being even more lucrative come 2023.
That deal has proven particularly fruitful for FOX’s broadcast network, which created its “Big Noon Kickoff” franchise last year to showcase massive games like Oklahoma-Texas and Ohio State-Michigan.
“Live appointment-based viewing is rare, where you get big audiences that are really meaningful,” said Maestas. “And that’s what is holding together the traditional bundled TV pay model. If you’re FOX betting on the network’s success, you need news or sports.”
There’s also the possibility tech companies like Amazon, Apple, Google or DAZN will enter the marketplace by the time conferences begin negotiating their next deals. Amazon, for one, already owns streaming rights to the NFL’s “Thursday Night Football” package as well as select matches for England’s Premier League and Germany’s Bundesliga.
Apple recently hired Amazon’s head of sports video, James DeLorenzo, to head up sports content for its Apple+ streaming service, signaling an interest in adding sports rights. Pac-12 Network president Mark Shuken raised eyebrows in April when he told Sports Business Journal that Apple has expressed interest in acquiring the league’s Tier 1 rights.
Commissioners like the Pac-12’s Scott might be drooling. Beyond opening the door to new platforms, more bidders entering the college sports TV market would drive up the price. However, media analysts remain skeptical that a conference would actually place its top-tier games on an exclusively streaming entity.
“Those tech players, flush with cash, are closer to becoming threats and bidders,” said Maestas. “However, I would bet that it ends up in the hands of legacy players. This is just one other thing to be in for the tech companies, and it’s the end all be all for the networks.”
“I don’t think their delivery system is ready for 25-30 million live concurrent users with no buffering and minimal latency,” said Bevilacqua.
However, cord-cutting was well underway a few years ago when ESPN and FOX ponied up an average $440 million a year combined for the Big Ten’s Tier 1 and 2 rights, providing its schools a roughly 40-percent spike in revenue distribution when the deal commenced in 2017. In opting for a relatively short, six-year deal, then-commissioner Jim Delany made a bet on the marketplace being even more lucrative come 2023.
That deal has proven particularly fruitful for FOX’s broadcast network, which created its “Big Noon Kickoff” franchise last year to showcase massive games like Oklahoma-Texas and Ohio State-Michigan.
“Live appointment-based viewing is rare, where you get big audiences that are really meaningful,” said Maestas. “And that’s what is holding together the traditional bundled TV pay model. If you’re FOX betting on the network’s success, you need news or sports.”
There’s also the possibility tech companies like Amazon, Apple, Google or DAZN will enter the marketplace by the time conferences begin negotiating their next deals. Amazon, for one, already owns streaming rights to the NFL’s “Thursday Night Football” package as well as select matches for England’s Premier League and Germany’s Bundesliga.
Apple recently hired Amazon’s head of sports video, James DeLorenzo, to head up sports content for its Apple+ streaming service, signaling an interest in adding sports rights. Pac-12 Network president Mark Shuken raised eyebrows in April when he told Sports Business Journal that Apple has expressed interest in acquiring the league’s Tier 1 rights.
Commissioners like the Pac-12’s Scott might be drooling. Beyond opening the door to new platforms, more bidders entering the college sports TV market would drive up the price. However, media analysts remain skeptical that a conference would actually place its top-tier games on an exclusively streaming entity.
“Those tech players, flush with cash, are closer to becoming threats and bidders,” said Maestas. “However, I would bet that it ends up in the hands of legacy players. This is just one other thing to be in for the tech companies, and it’s the end all be all for the networks.”
“I don’t think their delivery system is ready for 25-30 million live concurrent users with no buffering and minimal latency,” said Bevilacqua.