Posted on 11/10/2009 6:17:25 AM PST by abb
Much of the talk in the sports media world last fall centered on whether an effective competitor would step up to compete with ESPN.
ESPN had just outbid Fox by $100 million to secure the rights to college footballs Bowl Championship Series through 2014, thanks mainly to its dual revenue stream that has cable and satellite operators making a monthly payment of more than $4 per subscriber for the channel.
At the time, some sports league executives were fearful that ESPN would become a de facto monopoly that eventually would wind up driving the cost of sports rights down.
If a competitor were to emerge, it would have to do so between 2011 and 2014, when the TV deals for the NFL, MLB, NASCAR, NHL and MLS expire.
Yet a full year after ESPN scored the BCS rights, that national sports competitor still has not developed, and most network and league executives contacted by SportsBusiness Journal are skeptical that anyone will come forward to compete head-to-head with ESPN. Network and league executives are skeptical if anyone will come forward to compete head-to- head with ESPN.
But I see lots of competition around the fringes for ESPN, said one league executive.
That means ESPN should expect to see lots of competition from various entities, including the broadcasters, national cable networks, regional sports networks and league-owned networks.
Broadcasters have a multi-pronged approach for competing with ESPN for sports rights, starting with using retransmission consent rules to charge cable operators as much as $1 per month to carry their local stations (see story, page 1). Networks plan to use some of that money to compete with ESPN on sports rights.
But ESPN could see competition from some national cable networks. Some of these networks, like FX and Versus, have a surcharge clause in some of their contracts with small- to midsized cable operators (ones not named Comcast or Time Warner Cable). The surcharge gives the channels the right to charge an additional fee if they pick up rights to high-profile sports programming such as the NFL or the Olympics.
FX and Versus included these clauses in contracts when they were considering bidding on the NFLs Thursday night package, according to several cable sources. NFL Network ultimately was awarded the package, but the surcharge language remains in many of the contracts.
ESPN and NFL Network tacked on surcharges when they first acquired NFL programming; Versus charged cable and satellite operators a surcharge in 2005 when it obtained rights to the NHL for the first time.
In NFL Networks case, it increased rates from about 25 cents per subscriber to about 70 cents. Versus pushed for a smaller surcharge amount, though it demanded to be moved to better tiers. Cable operators that didnt agree to the surcharges had the live games blacked out on their systems. Versus has clauses in some of its distribution contracts that call for higher fees from cable systems should the network pick up rights to high-profile sports programs.
Other competition could come from the league-owned networks, even though all of them insist that they are not set up to be competitors to any of their broadcast partners.
Weve always said that were not in competition with the rights holders, said Tim Brosnan, MLBs executive vice president of business.
He pointed to MLBs postseason as an example. If you look at our network right now, it is nothing more than an infomercial for the Fox and Turner broadcasts, he said. I say that in a generous way. We are a barker right now for our two networks.
The NFLs head of new media, Brian Rolapp, sees his league network in similar terms. I dont really see a competition, he said. I dont see anybody complaining about the ratings. Its all good for the football fan.
Others, however, believe the channels have the potential to be strong competitors.
You can see college conferences and league-owned networks continuing to create new packages and new opportunities for networks to bid on their games, one cable source said. You can slice and dice this in such a way that everything doesnt have to go to a mega national sports network like ESPN.
Who will step up? Broadcasters: They still command the biggest audiences and still have deep pockets. As CBS and Fox begin charging cable operators for retransmission consent, they will have more money to bid on sports rights. Turner Sports: David Levy rose through Turners sports division and now oversees all of Turners sales and distribution. Does that mean TBS and TNT will be more likely to increase their sports portfolio beyond MLB, NBA and NASCAR? Cable networks: USA has retreated from sports; FX doesnt hold any sports rights; and Spike only dabbles in it. But they all have dual revenue streams that are key to bidding for sports rights. Could one of them step up and pick up a TV package? All-sports networks: Other than ESPN, Versus is the only player in this space and given the size and scope of its owner, Comcast, it has enough money to afford just about any rights package. Meanwhile, News Corp.s Chase Carey said Fox isnt planning to League-owned networks: Leagues own their own rights; leagues own their own networks. Sure, they dont want to give up on the rights fees that networks are paying. But it makes sense for them to grow their channels through packages of live games.
While John Skipper, ESPN executive vice president, sees more competition in the sports media space, he says the added competitors are not causing ESPN to change the programming strategy it has employed for the past several years.
That means ESPN still plans to bid aggressively on high-profile sports rights that encompass cable, broadband and wireless rights.
We feel like the most important couple of things for us to do are to acquire rights that allow us to move content around, Skipper said. We dont buy games; we buy content both the games themselves on multiple platforms, the highlights around them, and the rights to do other shows.
As Skipper picks up rights, he will make a renewed push to convince leagues that the difference between ESPN and ESPN2 is diminishing. ESPN2 still lags ESPN significantly in ratings, but Skipper says the difference is becoming lessened as ESPN puts higher quality programming on ESPN2.
ESPNs affiliate team also has been trying to get the two channels placed next to each other on cable and satellite systems.
My goal is to have that be 48 hours of ESPN, Skipper said. We used to say that wed never move SportsCenter to ESPN2. Now, we do sometimes.
With so many major sports rights coming due before 2014, Skipper says ESPN will have to decide which rights to bid on and which to ignore. But he said that does not represent a change from the past several years.
We already have to pick and choose, Skipper said. There are lots of things that wed like to have that we dont have.
He specifically mentioned baseballs postseason as something that is disappointing, in some ways, that were not there.
"Network evening newscasts will go dark after the '08 elections and their news divisions disbanded."
Walter Abbott, (b. 1950), Media observer, blogger and commentator
ping
I could not give a crap about the Yankee-Red Sox network.
Rarely watch it, for those reasons among others, including the current look-at-me “sports personality” mentality.
http://www.btobonline.com/apps/pbcs.dll/article?AID=/20091106/MEDIABUSINESS/911069992/1001
Sorrell: Winnowing out’ of media must continue
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=an3ACpodXoIQ
CBS Says Dunn to Replace Kane as Head of TV Stations
http://www.bloomberg.com/apps/news?pid=20601088&sid=aFabfw5NIdE4
NBC Loss With Leno Nobodys Gain as Viewers Vanish
http://broadcastengineering.com/news/hearst-tv-president-tv-dollars-1109/
Hearst TV president says some TV dollars will never come back
http://steveouting.com/2009/11/09/newsdays-pay-wall-from-bad-to-worse/
Newsdays pay wall: From bad to worse
http://www.onthemedia.org/transcripts/2009/11/06/05
Refusing to Pay
http://www.onthemedia.org/transcripts/2009/11/06/04
Is Paid Content Nigh?
http://www.washingtonpost.com/wp-dyn/content/article/2009/11/09/AR2009110902529.html
Three top executives ousted by Washington Times
Economic downturn appears to be cause of newspaper shake-up
It is my estimation that sports will in the future be the only media events that will be able to command a price. They are time-sensitive and the owners can control the distribution of the content.
Contrast sports with “news” which is ubiquitous and not owned by anyone. It just “is” like air.
http://latimesblogs.latimes.com/entertainmentnewsbuzz/2009/11/lots-of-smoke-but-likely-to-be-few-flames-in-dc-for-comcast-nbc.html
Lots of smoke but likely to be few flames in D.C. for Comcast-NBC
http://www.nytimes.com/2009/11/09/business/media/09comcast.html
Intense Review Is Expected for NBC Deal
http://www.miamiherald.com/opinion/other-views/story/1323711.html
Kurtz has a conflict
http://cancelthebee.blogspot.com/
Rumors in Biloxi... update: layoffs in advertising and production?
http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=117105
To Be Free, Or Not To Be, Murdoch May Find Out: 25% Of Journal’s Traffic Comes From Google
http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=117108
Digital Out-Of-Home Continues To Expand, Albeit At Single Digits
http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=117088
Grey Revs Fall 20%, Slams ‘Leno’ Impact
http://www.magazinedeathpool.com/
Metropolitan Home and Connecticut Home & Garden: RIP November 2009
http://newsosaur.blogspot.com/
Newspaper epitaph: Who else is doing it?
http://www.medialifemagazine.com/artman2/publish/Television_44/Magic_gone_ABC_s_Eastwick_is_axed.asp
ABC’s ‘Eastwick’ is axed
http://www.cjr.org/editorial/a_helping_hand.php
Editorial November / December 2009
A Helping Hand
The case for (smart) government support of journalism
Who will be their competition? A lot of people were betting on Versus. But with typical Comcast stupidity they have gotten themselves into a no-win spitting battle with DirecTV that will relegate them to permanent second-tier status if not resolved soon. What would you expect from a company that plumbs waterless toilets to please the Philly Plumbers Union?
Amen to that, brother!
ESPN has the most conceited bunch of “hey, look at me!” jerks.
NEWS FLASH! It is about the GAME, not you in the studio, buddy!
And while you are at it, cut down on the logo CG graphics leading into every segment.
And while I’m on my soapbox, tell your buddies in the news rooms that their graphics and scrolling tickers taking up half the screen are a real pain. Either reduce them in size, move them to the top of the screen so they obliterate “sky” in outside shots, or else train your cameramen to lower their aim so that the graphics block “ground” rather that the action.
There, I’ve said my peace.
A new network could come in and broadcast Australian Rules football.
>>ESPN had just outbid Fox by $100 million to secure the rights to college footballs Bowl Championship Series<<
Good. I’m not sure about football, but Fox’s World Series coverage was such a disgrace that I watched the last couple games with the sound off. Tim McCarver is senile, Joe Buck is a mediocre “legacy” case, and their broadcasts are nothing but overwrought storylines, godawful one-liners, dweeby on-field reporting, and promos for other Fox shows.
As for ESPN's current lock?
Won't last, Time for your fabulous crushed/melted clock .JPEG my friend. LOL
We've all the Fox Sports stations, all regionally focused, ie Fox Sports North, Fox Sports Southeast etc. All of 'em.
Add those to all the ball & stick sports channels.
Now add the Big10 Network. Of which (& listen to this) they've at least 5 channel slots. One may watch every Big10 game playing on any given Saturday, except any under contract to an alphabet net. Repeats all week long, too.
ESPN's finished, kaput, fini and & they know it.
That's why the BIG dollars bid, until what happened to the network dolts with NASCAR. They simply could not sell enough advertising to cover the costs of the price they'd paid for the broadcast rights. LOL
That's not just exclusive to NASCAR, watch for it in all other venues because the NASCAR *collision* happened when the economy was literally booming.
Consider all the conferences have their own networks now and they're beamed into homes visa vi zip code for DishNet & DirecTV subscribers. Slick as snot, if ya watch college FB/BB/BB/whatever.
While we only use NHLNet, having programmed out the NFLNet after the Limbaugh gang-bang? The others such as MLS, MLB, NBA and NASCAR are all there, albeit unused.
Why should these governing entities *share* a damned cent with ESPN? That's nuts and they won't. Ultimately we'll have to get to THEM to enjoy their product(s).
You've hammered home the point of *delivery* monopolies since I first began patronizing your great threads, abb.
And as monopolies go, ESPN used to enjoy a whopper.
That status now appears posed on the precipice of extinction. ;^)
Against the clock, but have Time to ask you about this article:
"Three top executives ousted by Washington Times
Economic downturn appears to be cause of newspaper shake-up"
So whadda ya think, abb?
Think they'll go left?? LOL!!!
This is why ESPN is always included in "Basic Cable", and why cable and dish companies will always fight to the death against "per channel" billing.
I think the internet and webcasting will eventually moot the issue of a la carte selection of cable channels. It will take a while, but that’s the way we’re headed.
http://www.thenation.com/blogs/edcut/494764/good_riddance_to_the_msm
Good Riddance to the MSM?
http://www.newser.com/off-the-grid/post/329/rupert-murdoch-the-internet-does-not-exist.html
Rupert Murdoch: The Internet Does Not Exist
http://www.slate.com/id/2235055/pagenum/all/
Read Between the LiesWhat’s behind Rupert Murdoch’s trash-talking of Google?
http://www.hks.harvard.edu/presspol/news_events/archive/2009/freeland_11-10-09.html
F.T.’s Chrystia Freeland sees fewer news organizations a ‘good thing’
http://www.philly.com/philly/business/homepage/20091110_Judge_bars_credit_bid_in_Phila__Newspapers_auction.html
Judge bars credit bid in Phila. Newspapers auction
http://tpmlivewire.talkingpointsmemo.com/2009/11/family-feud-how-much-is-moon-church-conflict-driving-wash-times-turmoil.php?ref=tn
Family Feud: How Much Is Moon Church Conflict Driving Wash Times Turmoil?
http://commonwealthchronicle.com/2009/11/10/exclusive-the-chronicles-weekend-with-jayson-blair/
Exclusive: The Chronicles weekend with Jayson Blair
http://www.editorandpublisher.com/eandp/departments/business/article_display.jsp?vnu_content_id=1004041508
Tribune Making Payment on DIP Loan
http://cancelthebee.blogspot.com/
VP of advertising at Biloxi Sun Herald bails
In fact, that is the VERY reason ESPN is not only surviving, but thriving. ESPN will make a bid for the Olympics--and because ESPN is a true around-the-clock sports operation, they don't need to work with over-air prime time broadcast schedules and they could broadcast all Olympic events LIVE regardless of the location of the Games.
Despite the sanguine hopes of new regional networks that cater to one college conference of teams, why do you think the SEC signed BIG deals with both CBS and ESPN for college football coverage? With true national exposure, SEC football on ESPN/CBS means true national coverage for this conference, hence the reason why a large fraction of the "blue chip" high school football players who have NFL potential sign with SEC schools.
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