Is ESPN a revenue bubble about to pop?

[FlabLoser]

Great read here fron Clay Travis.

http://www.foxsports.com/college-football/outkick-the-coverage/is-espn-a-giant-bubble-about-to-burst-071215

ESPN is by far the most expensive cable channel. Most cable/sat customers don't watch it and pay the lions share of ESPN's revenue.

Cord cutting is accelerating. ESPN subscriber revenue could be at the start of a nose dive.

If EPSN went standalone like Netflix, they would have to charge $30/month.

That's the short story. This is a good read that is well researched.

I have quietly wondered for some time if we're in a bubble. Everybody is getting a newer or bigger stadium at college & pro levels. Seems like everybody got rich fast and has assumed the money would keep flowing.

[messageboardsuperhero]

Big-time college athletics (as well as ESPN) is most definitely in a bubble... Which is why I was pretty glad to see that we are financing the baseball stadium with little-to-no debt.

Will we see revenues plateau, or will it be an all out bust? That is the question, IMO. I lean towards plateau moreso than a bursting bubble.

[civildawg]

Would love to see ESPN crash and burn. Sports center has become a soap opera instead of sports reporting

[Schultzy]

This article makes the I dropped directv threads make more sense to me. I didn't know you could watch so much television without satellite or cable.

Sounds like we will all eventually cut the cord.

[TUSK]

You cats need to clue in a Psychophant on "cuttin' the cord"...

I just renegotiated and bundled my internet + DTV for ~$90/mo with no contract....

but, if I could do it all for less, I certainly would...

[civildawg]

I call dish every 6 months to "cancel" and they give me 20 dollars off a month

[DancingRabbit]

Would love to see ESPN crash and burn. Sports center has become a soap opera instead of sports reporting

Well, don't watch Sportscenter, I don't. But ESPN is helping level the field for MSU so I wish them success.

[Quaoarsking]

He raises good points, but I think it's worth noting that Clay Travis works for Fox Sports 1, a direct competitor to ESPN.

[Irondawg]

All the networks are about to have to face some realities. Soon you're going to see almost everyone choosing the channels they want to pay for vs. being about to ride the coattails of bundled packages from the TV providers

[Liverpooldawg]

And whatever happens you can bet the networks including ESPN will do just fine. It's the consumer who will get screwed.

[DudyDawg]

ESPN won't go away. They'll adapt when they have to. They don't need to yet

[thf24]

I may be wrong but I feel like ESPN currently covers some low-ratings sports and events for PC reasons (ie. WNBA) that are subsidized by the current cable subscription model, but could/would cut if the bubble bursts. I have no idea if that would be nearly enough to offset the losses though.

[ShotgunDawg]

I don't think the bubble will pop because I believe the sports leagues will renegotiate their rights, instead of watching ESPN go out of business and have to cut sports programming from their lineup. At the end of the day, the sports leagues need ESPN as much as ESPN needs them, so there will be renegotiation. All Travis' article is base on is if they don't renegotiate

[ShotgunDawg]

I may be wrong but I feel like ESPN currently covers some low-ratings sports and events for PC reasons (ie. WNBA) that are subsidized by the current cable subscription model, but could/would cut if the bubble bursts. I have no idea if that would be nearly enough to offset the losses though.

I think that is low hanging fruit. In fact, I bet WNBA programming is one of the best bang for the dollar programming that ESPN can put on. The rights to the league likely cost next to nothing, but I would bet the WNBA has a small, but loyal base of fans. Lesbos love that stuff

[blacklistedbully]

Well, don't watch Sportscenter, I don't. But ESPN is helping level the field for MSU so I wish them success.

Exactly! The LAST thing we want to happen is for the ESPN/SECN deal to go south. The money finally reached a point where there is enough for us to compete, despite the large discrepancy in total revenue.

If we lose that, we'll go back to being unable to realistically compete with the big boys and their recruiting budgets.

[Johnson85]

And whatever happens you can bet the networks including ESPN will do just fine. It's the consumer who will get screwed.

ESPN will do well compared to other networks, but that doesn't mean they will do as well as they are doing now. They have a dedicated audience that will be willing to pay for their content, and will be willing to put them at or near the top of their priority list. They are able to demand a huge premium now because live sports are what prevents so many cable and satellite customers from cutting the cord. As they offer their services a la carte, they won't be able to demand the same premium going forward.

On the consumer side, consumers who like to watch a lot of niche channels will be hurt as television programming is unbundled. Consumers who really only watch a few channels, or watch channels with broad audiences will do ok or better.

[Liverpooldawg]

ESPN will do well compared to other networks, but that doesn't mean they will do as well as they are doing now. They have a dedicated audience that will be willing to pay for their content, and will be willing to put them at or near the top of their priority list. They are able to demand a huge premium now because live sports are what prevents so many cable and satellite customers from cutting the cord. As they offer their services a la carte, they won't be able to demand the same premium going forward.

On the consumer side, consumers who like to watch a lot of niche channels will be hurt as television programming is unbundled. Consumers who really only watch a few channels, or watch channels with broad audiences will do ok or better.

Nobody except the networks will do better. You will pay more for less, book it.

[Johnson85]

Nobody except the networks will do better. You will pay more for less, book it.

The networks will probably do the worst. What the networks really offer is an established brand to push content. When everybody got their content through cable and satellite, they were also able to capture a lot of the value of the delivery method. The cable and satellite companies needed the networks almost as much as the networks needed the cable and satellite companies. But with consumers having different options for receiving content, most of which rely on the internet, the owners of the infrastructure for the internet (mostly cable companies but also some wireless companies) have much more leverage to capture the value of that infrastucture. So that leaves the networks fighting for subscription dollars and subscription dollars will be primarily allocated by consumers based on content. That leaves the networks with less leverage to negotiate with content creators (or the creative talent for in-house produced content); basically their only leverage will be expertise in production value and if they are protective of their brand, the ability to loan their reputation to the content owners/providers in order to help establish a viewership. That seems like a terrible position to be in compared to the position they're in now.

I think most consumers will dislike the new a la cart television world, but I think networks will hate it even more.

[99jc]

they have. ESPN changed the course of the sports world. Just think what it would be like without them. They shook the big 4 networks to the core and I for one appreciate it. along with the NFL network, MLB , NBA TV and the SEC NETWORK its all I need. 17 the lifetime channel and food network bullshit give me sports. That's all.:cool:

[DudyDawg]

http://www.theatlantic.com/business/archive/2015/07/espn-strategy-mobile-after-tv/397928/

Decent read on their approach to changing

[PMDawg]

I call dish every 6 months to "cancel" and they give me 20 dollars off a month

same here. in 6 years, never paid more than $85/mo, often less.