They’re recreating the cable bundle but cutting out the middle man (the cable companies).
Conference Realignment
sbillini
- st petersburg, fl
They tried that with Hulu. How did that work out? I doubt they’d be so ready to do another shared ownership streaming platform unless they needed to.
ChiefGritty
- Chicago, IL
Sort of.
The idea is that if the only thing keeping people tethered to cable (or its streaming equivalents like Youtube TV/Sling/Fubo/etc) is sports, why not strip the package down to just said sports and sell it directly?
The devil is in the details there though, for one thing this won't have local RSN's like NBC Sports Chicago, and is missing CBS and NBC. Fixable problems potentially, but problems. And then the price point will be $40-50 at a minimum, might be more, sports rights are the lions share of what you're paying for in a cable subscription.
And then of course all of these companies remain under pressure to put more and more stuff behind streaming paywalls. The offerings of this bundle get thinner by the year.
So in being both incomplete and quite expensive I suspect this will be a relatively unsuccessful product at least initially.
My theory? The corporate parents here, Disney, Fox, and Warner Brothers Discovery all would love to parachute out of the sports business at a favorable price, and I suspect they are creating this one big fish as bait to be eaten by an Amazon or Apple, a mechanism to give them rights en masse in one fell swoop, rather than playing the league-by-league bidding game which these companies have shown a distaste for.
I am not so sure. I have heard just the opposite. That it is a wall to keep out big tech from sports. I am also not sure why these companies would want to get out of one of the type of media content that needs to consumed in real time, and therefore available for advertising.
Those companies (ESPN/FOX/Warner) are the middle man in this scenario in that they don't produce anything of value and are between the leagues and the consumers. It is the leagues themselves that produce the product. And for $50/month you get some of what you want but not everything since you don't have CBS/NBC/Amazon etc. on board.
A quick search shows that for $63/month you can get the season passes for the NFL, NBA, NHL, and MLB. The leagues have the power and draw to conglomerate together and take the profit the media companies were making for themselves. And create a better product at a similar price point. That would be a completely different level of bundle compared to the desperate media companies who are floundering as the golden goose of the cable tv bundle evaporates. You can only rely on grandma paying $10/month for ESPN and never watching it for so long.
For Illinois context, I think the Big Ten and college football media rights in general are undervalued. In the upcoming Big Ten/SEC discussions, I wouldn't put it past them if they were to discuss bundling the Big Ten and SEC media rights together to create even more leverage over the price.
ChiefGritty
- Chicago, IL
No such wall does or can exist. The day the real whales decide they want this industry it will be theirs. The Magnificent Seven tech companies have a greater concentration of corporate capital than ever in the history of this country, and the big entertainment players have never been weaker.
The reason it hasn't happened yet is because everyone knows these rights are overpriced and a correction is coming. You don't want to buy a row of houses in Detroit in 2007, you want to buy the whole city for the same price in 2009.
But only out of market and without the games those leagues sell to ESPN & such (at least in terms of NBA League Pass and MLB.tv).
Those packages are purely supplementary income for those leagues, they aren't the core product.
It's an ongoing shell game. If you package the whole kit and kaboodle up and sell it directly to fans, the price point that equals (let alone grows) what the leagues get now would be astronomical and chase everybody away, cratering viewership and exposure.
Everyone is just hoping Google will buy everything at an inflated value and market it to consumers at a loss. That kind of thing was a Web 2.0, zero interest rate phenomenon, that's not our world anymore. Winter is coming.
IDK, seems like the product they are selling is a broadcast version of the game that requires announcers/producers/equipment/... there seems to be a fair bit of work done more than just distributing/selling the final product that I would put in the normal middleman conversation.
Fighter of the Nightman
- Chicago, IL
I know this has practically become cliche to speculate this by now, but wouldn't you have to figure that if we eventually get a Big Ten and SEC that are functioning as the NFC and AFC for the NFL, we would get divisions? And at that point, why not make the divisions geographically coherent? All the money is staying within the conference. It might still be a silver lining outcome in 10 years or so that we actually wind up mostly playing teams like Iowa and Wisconsin again. Just an idea if we later added, say, North Carolina and FSU or something.
Midwest
Illinois
Iowa
Nebraska
Wisconsin
North
Michigan
Minnesota
Northwestern
Ohio State
South
Indiana
Maryland
North Carolina
Florida State
East
Michigan State
Penn State
Purdue
Rutgers
West
Oregon
Washington
USC
UCLA
Is it perfectly balanced? Of course not. However, you could still have protected rivalries for those that need them (e.g., Indiana/Purdue or Wisconsin/Minnesota). And I think it would be a lot better than what we are all dreading, JMO.
- The Midwest probably serves as an Illini fan's unrealistic dream here, but it makes too much sense.
- The North is pretty coherent, with OSU/Michigan paired with two schools that are significantly below them. I figure any "odd ball" team should be one with a protected rivalry, such as Minnesota having Wisconsin and Northwestern (unfortunately!) probably having Illinois. In other words, their placement in an "imperfect" division is counterbalanced by being a team that has a protected rivalry (I do not envision all teams having one).
- You'd have the old ACC teams back together in the South. See previous "odd ball" comment except substitute Indiana (Purdue) in for this example..
- The East at least includes some geographic "on paper" rivalries like PSU/MSU Rutgers/PSU. Purdue obviously serves as the "oddball" here, but again - they have that protected rivalry with Indiana to help mitigate that.
- The West speaks for itself with the Pac-12 schools.
Midwest
Illinois
Iowa
Nebraska
Wisconsin
North
Michigan
Minnesota
Northwestern
Ohio State
South
Indiana
Maryland
North Carolina
Florida State
East
Michigan State
Penn State
Purdue
Rutgers
West
Oregon
Washington
USC
UCLA
Is it perfectly balanced? Of course not. However, you could still have protected rivalries for those that need them (e.g., Indiana/Purdue or Wisconsin/Minnesota). And I think it would be a lot better than what we are all dreading, JMO.
- The Midwest probably serves as an Illini fan's unrealistic dream here, but it makes too much sense.
- The North is pretty coherent, with OSU/Michigan paired with two schools that are significantly below them. I figure any "odd ball" team should be one with a protected rivalry, such as Minnesota having Wisconsin and Northwestern (unfortunately!) probably having Illinois. In other words, their placement in an "imperfect" division is counterbalanced by being a team that has a protected rivalry (I do not envision all teams having one).
- You'd have the old ACC teams back together in the South. See previous "odd ball" comment except substitute Indiana (Purdue) in for this example..
- The East at least includes some geographic "on paper" rivalries like PSU/MSU Rutgers/PSU. Purdue obviously serves as the "oddball" here, but again - they have that protected rivalry with Indiana to help mitigate that.
- The West speaks for itself with the Pac-12 schools.
sbillini
- st petersburg, fl
In Formula 1 where the league goes all over the world and there are dozens of broadcasters in many countries, the league does the camera/most of the productions work itself and all the broadcasters use that single source (known as the "world feed"). The broadcasters then add their own commentators and some more production on top of it. Long way of saying, doesn't seem like too high a hurdle for major leagues to do all of it themselves.
My broader point is that the leagues can do all of this. The NFL could hire Jim Nantz, Tony Romo, and everyone else needed directly. Just like the NFL could sell Super Bowl advertisements instead of CBS selling them. Think of it this way, if a super bowl add is $7 million, and there are 50 minutes or 100 adds, that is $700 million that goes to CBS and not to the NFL except in a round about way. CBS plans to profit from this endeavor, so I just hypothesize that if the NFL did all of this themselves whatever profit CBS anticipated off of the NFL, that money could go to NFL owners instead of CBS executives and shareholders.
Plus a large part of what the networks are buying is the rights to show highlights and video of the games. Without these rights someone like ESPN has nothing. In fact a large part why the Monday Night Football package was so expensive is because ESPN badly needs permission to show highlights during their daytime programming.
ChiefGritty
- Chicago, IL
They can. But they can also sell to a party that has expertise in production and global distribution and the ability to put the league alongside other premium content people are looking for. And which can also relieve the leagues from having to be in the TV ad sales business, the quasi-journalism business, etc. There are risks there.
I don't think Netflix is a likely partner, but just to use them as an example, if the NFL sells its rights to Netflix, they know the app is going to work and deliver the games in good and reliable streaming quality to customers all over the world. Do they know that about an app they in-house? They'd have to hire somebody and hope.
A big fat stable check and not having to worry about that stuff has a certain appeal, even if it means you're giving some of the juice to a third party.
MLB seems pretty gung-ho about going their own way though, and they were an early tech innovator with MLB.tv, we'll see.
I believe this scenario absolutely will be the end point in less than a decade, after cable and satellite collapse.
ChiefGritty
- Chicago, IL
I try to look at this through the other end of the telescope. The game is maximizing the amount that can be extracted from the consumer. What would the consumer be willing to pay the most for, what is there actual demand for?
To me that answer has always seemed pretty clear, for the four major pro leagues to band together and sell a market-by-market product of the games for the local teams.
If a service is the only place to see the Cubs, Bulls, White Sox, and Blackhawks (the NFL's participation/role in this kind of thing is definitely cloudy), that's something that a very large share of households in Chicago (and lots of households across the country, a market that is currently underexploited) will prioritize in their home entertainment budgets.
(Where does that leave college? Search me.)
As with everything in this space, the devil is in the details and no arrangement patches up the hole that exists because you can't make every granny in America who never watches sports send $30 a month to the sports industry anymore.
1st point - 100% agree; this seems to be the age old dilemma of doing everything inhouse/vertical monopoly vs specialize/stay in you lane & focus on doing core business well argument. Also the networks have some synergy in that they can use much of the same capital/production people to broadcast other sports of interest throughout the entire year, still have a broadcast TV presence, & market presence to attract more viewers.
Last point I would add from a mile high view MLB would make way more sense than college football...longer season, way more games spread out through the entire week, lower TV eyes/interest in individual games would seem to be less attractive to TV and make the economics of going on your own more favorable. You would have a lot of production equipment/people sitting most of the year, then working mostly only Saturday...you could add other college sports to try to fill the void, but after college football & basketball I doubt that is more than breakeven at best.
Looking at BTN, there is a reason it is 10 fold less conference money that Tier 1 payouts & only part of it is less attractive games.
Interesting example, but seems like a different case in that they are taking advantage of one camera crew, maybe local contract crew & then able to let local broadcasters add then solve the different language issues that a European/world product needs. But other than 1 feed, they are still relying on individual broadcasters to deliver the final product, sell adds, and handle all the final production. I go back to Gritty's post where he highlights some of the risks and value that established partners can offer.
IlliniwekKDR
- Colorado Springs, CO
This is something I have been wanting for a very long time. Living in Colorado, if I had an app where I could just buy the ability to watch Blues and Cardinals games from back home, I would be on it. Instead, you have to buy the whole league passes to see everybody's out of market games when you really don't care about anyone's team but your own. In a world where people are more and more likely to move away from the area where they grew up (especially if you grew up in the Midwest), it's going to be in more demand.
So was Duke.
I would LOVE to see this turn into a promotion/relegation system similar to association soccer leagues across the world. It’s probably the only sport in America (or college basketball) where this could be possible. Have a 16 or 18 team league round robin, top team wins the championship, bottom three teams get sent down. Repeat that down through all of the teams into D-3 or wherever.
The historical conference alignments are dead. And nobody wants to see teams go 0-fer and continue to stay up playing the top teams. Give teams that are succeeding at lower levels a legit chance to move up and play the next tier of teams the following year.
UCLA just took a major step backward with new hire. They must really be broke to hire someone who does not have even college coordinator experience much less HC experience.
I look forward to playing at UCLA so we finally get a win in the Rose Bowl.
44 year old HC who never been anything other than a position coach. Bleh.
Going to ask a question that is probably dumb but I'm not sure why...
Whatever the biggest logos are outside of power 2 (UNC, FSU, UVA, CLEM, whoever), why aren't the B1G and SEC going after them now? I get that it might not add to the current TV deals and therefore subtract from current revsharing, but it seems like everyone of these acquisitions pays off down the road and the league that gets the brands will be in better shape in 5 - 10 years.
Whatever the biggest logos are outside of power 2 (UNC, FSU, UVA, CLEM, whoever), why aren't the B1G and SEC going after them now? I get that it might not add to the current TV deals and therefore subtract from current revsharing, but it seems like everyone of these acquisitions pays off down the road and the league that gets the brands will be in better shape in 5 - 10 years.
Mr. Tibbs
- southeast DuPage
the ACC sold the grant of rights to the media for all ACC schools to ESPN until like 2034 . The "penalty" to leave is +200 million. FSU is trying hard to find a legal loophole to get released from it . Odds they can are not good right now .
In other words, its too expensive to leave, even though it may make some sort of "sense". Although even that is iffy
sbillini
- st petersburg, fl
I mean...the big ten already has a pretty robust broadcasting arm where they're selling ads, doing final production, etc. It's called the big ten network. Granted it's a JV with Fox, but the capabilities are there and they've had plenty of time to learn how to do it themselves, should they choose to.
“Peak sports”. The concise phrase I’ve been looking for… the thing I’ve been struggling to articulate in 100 words or less.
Something I think is very important to keep in mind when speculating on the future of all sports really, but especially college, and the likely reality being the amount of money will not always be increasing.
Last edited:
My guess is that the reason it is a joint venture with Fox is because it didn’t make sense to do it on there own because of the production end.