ESPN's Uncertain Future Is Already Here

[andy4theherd]

ESPN is hemorrhaging subscribers and money. In a November regulatory filing, the network revealed that it has lost seven million subscribers over the past two years. While every popular TV channel has lost subscribers, the losses for ESPN and ESPN2 are among of the highest in the industry—and the most costly.

http://deadspin.com/espns-uncertain-future-is-already-here-1753901086

 

[Chris McLaughlin]

Eventually the bubble will pop, they always do. Not just ESPN's, but college football's in general.

 

[Herdon2]

Greed will eventually pop the bubble. College football is bubbling over with greed.

 

[herdfan429]

In before dshoe shows up telling everyone how wrong they are

 

[andy4theherd]

they (ESPN) also owe $20 mil to advertisers due to a 36% decline in viewers for the College Football Playoffs...

 

[The Real SamC]

ESPN is still very profitable. But the article outline the basic issue:

"Everybody" paid $6.15/month for ESPN, even if they don't watch sports.

Now "everybody" is figuring ways around cable/dish and there are plenty of people who, given the option, would pass on ESPN (and all sports channels).

If this was just "a la carte" ESPN would have to charge $40/month from the people who actually want it, and that is more than 95% of people can afford.

Today, ESPN is cutting fat. Non-things like Olbermann and Simmons, along with layers of empty suit executives. But eventually it has to reduce programming costs.

The main issue, and you won't read it on hipster sites like deadspin, is ESPN's mismanagement grossly overbid for the NBA. It is stuck in a contract with a sport with terriable demographics which nobody else wanted.

 

[MARSHALL77]

With regards to Herdon2"s comment - Ck this out regarding the SEC and revenue as well as the evolution of the SEC network. Even programs that are not on the same level as Bama , LSU , etc are raking in the $$. The big just get bigger.

http://www.usatoday.com/story/sport...ball-playoff-sec-network-mike-slive/79006606/

 

[Chris McLaughlin]

With regards to Herdon2"s comment - Ck this out regarding the SEC and revenue as well as the evolution of the SEC network. Even programs that are not on the same level as Bama , LSU , etc are raking in the $$. The big just get bigger.

http://www.usatoday.com/story/sport...ball-playoff-sec-network-mike-slive/79006606/

Who do you think owns the SEC Network?

 

[HerdFan73]

Who do you think owns the SEC Network?

People need to remember this when they complain about all the SEC bias. Consider the sources. McCraffrey wasn't a victim of west coast bias in the heisman race I think those days were over. He was just matched up against an ESPN product in Henry. ESPN controls the hype.

 

[MARSHALL77]

Who do you think owns the SEC Network?

Not the point of the post. The point was/is the $$ that a major conferences such as the SEC reaps vs the likes of a C-USA or the MAC etc. How long it will continue is anyone's guess.

 

[huntersdl2007]

No need to try and drag dshoe into some debate here. Bottom line is technology has changed everything. Ratings for tv early on with the dvr and replay tech. Now with streaming, hack sites and other methods. There is plenty if viewers just no one can really measure it properly. A very evolving world due to tech advances

 

[raleighherdfan]

It's amazing how some of you claim to know more about ESPN than a man who had both a business relationship and worked for them longer than some of you have been on this planet.

 

[TheGreenhouseEffect]

I can tell you I know more about ESPN than DS! They are guilty of being good business people. Building a product, segmenting it, then selling that segment. Smart marketing for them, bad for all of college football. Does the NCAA care? Those ethical leaders that have people like Ollie Schmuck still slandering Marshall even after he's been named an officer there, um NO! They are on the gravy train too.

It's sad folks, but it is, what it is.

ESPN has done a ton of good, but now teeters on the evil empire status. In reality FOX1 etc need to balance out the menu offerings or else we are going to see SEC football on every ESPN outlet 24/7.

 

[dshoe123]

In before dshoe shows up telling everyone how wrong they are

Here's all I'll say about it............remember how many of you were so excited about the CSTV contract with CUSA, remember how many of you sounded the death march for ESPN when CBS bought CSTV, remember how many of you predicted the demise of ESPN when NBC launched NBCSports Net, remember how many of you jumped on the Fox Sports1 train as finally the real competition needed to bring ESPN down!?

Give it a rest and take a look back a couple of years from now. There is a major (perhaps cataclysmic) shift going on in the cable industry, that is for certain.........changes are coming, that is for sure, the new CUSA tv contract will be the first example of how the rights acquisition process and value is changing. Big Ten will likely be the second, they will fare OK but there will be teeth gnashing over the perceived value vs the actual value that will be discussed internally at every network...... you will see the beginnings of the end of the rights fee race.

All that said, ESPN will find a way to survive and very likely continue to lead the segment of the industry, but changes are coming, in fact, I'll be shocked if they don't eventually drop a business unit or two, unfortunately jobs will be lost and offerings will be narrowed as the focus turns to a new model always with an eye toward the stockholder and profit.

I have been suggesting struggles in the model both internally at ESPN and occasionally posts and discussions for the past 5 years or so. Like so many other "rocket ship businesses" those on board don't see the need to refuel occasionally.

Look for other companies to explore new models of sports programming delivery.........that is exactly what ASN/Sinclair is doing and others are exploring...... many will get it wrong and fail (CSTV, SportsChannel,
Prime Sports, etc.) but someone will emerge with a new model that challenges the old, and likely change the industry. That's how it works.

 

[jt56]

Interesting, insightful comments. Thanks, DShoe.

 

[dshoe123]

I can tell you I know more about ESPN than DS! They are guilty of being good business people. Building a product, segmenting it, then selling that segment. Smart marketing for them, bad for all of college football. Does the NCAA care? Those ethical leaders that have people like Ollie Schmuck still slandering Marshall even after he's been named an officer there, um NO! They are on the gravy train too.

It's sad folks, but it is, what it is.

ESPN has done a ton of good, but now teeters on the evil empire status. In reality FOX1 etc need to balance out the menu offerings or else we are going to see SEC football on every ESPN outlet 24/7.

Simple question and I anxiously anticipate the answer: how can you or do you know more about ESPN than I do? I was a Disney Board of Directors appointed officer of the corporation for the last ten years I was there. Just asking?

 

[The Real SamC]

Look for other companies to explore new models of sports programming delivery.........that is exactly what ASN/Sinclair is doing and others are exploring...... many will get it wrong and fail (CSTV, SportsChannel,
Prime Sports, etc.) but someone will emerge with a new model that challenges the old, and likely change the industry. That's how it works.

Please explain how CSTV (startup sold to CBS, Inc. for $325M 2 1/2 years after launch, with the previous owner given an empty suit job with CBS) or Sports Channel and Prime (previous grouping of regional sports network broken up and sold (at a profit) multiple times and today a part of the Fox Sports Net or ROOT groups), got things "wrong" and "failed". Saying Prime or Sports Channel "failed" is like saying the C&O Railroad must have "failed" because you don't see the name anymore. Forgetting it renamed itself after buying all of its competitors.

The question for the next era is that if the 1000s of people that simply don't like sports are given the choice, they will choose to not pay ESPN over $6/month (plus another $4 for its competitors). Leaving those who do like sports having to pay $40. That won't happen, and the answer may be as simple as telling the next era's NBA thugs they will have to make it on $10M a year and not $30M, but it is not automatic that the IS an answer, especially for ESPN or any other particular company.

Remember Blockbuster?

 

[TheGreenhouseEffect]

Silvercometga.com

Simple question and I anxiously anticipate the answer: how can you or do you know more about ESPN than I do? I was a Disney Board of Directors appointed officer of the corporation for the last ten years I was there. Just asking?

Dan Dan Dan, through years of reading, mental osmosis, yoga and seeking a higher Herd plane of existence my wisdom, knowledge and intuition have allowed me to become a media expert. Indeed it can be argued I never set foot inside a TV studio, sat up a THN camera or even know how to turn a microphone on. These facts are inconsequential to my understanding of the inner workings of ESPN.

That said I'll make you a deal. I'll stop commenting about ESPN if you start riding your bike with a helmet!!!!

Oh boy, yes indeedy I was KIDDING! Now let's go down to Lynn, on the field!!!

 

[dshoe123]

Sam,
Sounds like you want to an argument here and that isn't the focus of the previous post. CSTV and Prime Sports both failed in the sense of attracting viewers and establishing themselves as forces within the sports television space. CBS and Fox bought the respective companies and made them viable. If your only metric is that they sold for more than they owed, then you are right, they were successful. CBS Sports Network continues to struggle however and has never been able to overcome some of the contractual model mistakes of its previous ownership. Fox Sports Nets, survive on the strength of Fox and professional sports franchises. Today however, Fox RSN's are a shadow of the network they once were, now looking to Comcast and Root Sports to provide Regional eyeballs and cobble them into national numbers.

CSTV was months and maybe days away from collapse when CBS bought (and to this day, even Senior executives of CBS can't answer why) the failing network. While the purchase price of 325M looks impressive, it is important to note that almost all of those dollars went to paying off the creditors and note holders. The Budweiser and Coke advertising deals signed early by CSTV were "purchased" with equity in the network instead of the traditional $'s per thousand. The more they ran, the more they owned.

Your premise and your analogy is a false one..........The old C&O/B&O exists today it simply grew and purchased its competition in typical corporate merger fashion changing its name along the way to reflect its growth. None of the companies mentioned above (CSTV, Prime or SportsChannel were able to purchase anything, in fact all were collapsing under their own debt when they were purchased outright by other players in the industry..... CSTV wasn't purchased by a competitor for example, they were purchased by a company seeking to get into the cable sports space, and to say they were successful in the new space would be a stretch, a very long one in fact. SportsChannel in fact failed and only a relative few of its original pieces survive today as part of the Fox/Comcast cooperative Networks.

btw: Some of the old Prime affiliates were indeed successful, but they were Prime affiliates and not owned in any measure by Prime...... SportSouth and HTS are examples.....one now Owned by Fox and the other by Comcast. The SportSouth name even re-emerged under Turner ownership but not the same SportSouth previously owned by Turner and sold to Fox. Even this network is now an affiliate of Fox RSNs, but still owned by Turner and exists in the same space with the Fox owned entity. KBL in Pittsburgh was one of the early regionals that could never quite make it and has gone through multiple transitions, name changes and ownerships.......today it is part of the Root (worst name in the history of names) Sports Net group.

 

[dshoe123]

Silvercometga.com



Dan Dan Dan, through years of reading, mental osmosis, yoga and seeking a higher Herd plane of existence my wisdom, knowledge and intuition have allowed me to become a media expert. Indeed it can be argued I never set foot inside a TV studio, sat up a THN camera or even know how to turn a microphone on. These facts are inconsequential to my understanding of the inner workings of ESPN.

That said I'll make you a deal. I'll stop commenting about ESPN if you start riding your bike with a helmet!!!!

Oh boy, yes indeedy I was KIDDING! Now let's go down to Lynn, on the field!!!

Great answer and not far from what I expected (I assumed the tongue was firmly planted in cheek)...... That said, you simply realize that your expertise in the business is similar in origin and maturation to virtually every other poster on this and other boards........LOL. Simply put: You think it , so therefore it must be!!!

Please keep commenting on ESPN and all of the other things within your vast expertise

BUT, for sure, I need to pull back on the helmetless biking!!!

 

[SouthernHerd]

I hate what ESPN has done to college football by further widening the gap with TV money between the P5 and G5. It appears CUSA is about to get bitch slapped with a crappy TV deal to further widen the gap. I however watch ESPN constantly so I'm part of the problem I suppose. I hate my cable bill every month and have been looking at alternatives and might take the jump to SlingTV since they offer ESPN. If you are a sports fan you got to have the evil empire for your college football fix sadly.

 

[andy4theherd]

Sling TV is a FANTASTIC start. however, they still force you to take ESPN and ESPN 2 in their lowest ($20/month) package. i imagine they would double (at a minimum) their subscribers if they offered a package without ESPN/2 for $10 a month...

on the other hand, ESPN should go the HBO route and just offer all their stuff online via monthly subscription. you can get HBO NOW for $15/month without having cable or satellite. if ESPN offered this, i imagine a huge number of "cord cutters" would sign up. a lot of people can get ~20 channels (including all the networks) free with an antenna. that is the bread and butter of cord cutters. $15/month to get all ESPN channels would be great for the sports nuts.

 

[TheGreenhouseEffect]

I can say that in today's major metro Atlanta market the pinko commie millennials are in major cord cutting mode. There is a minor revolution in going back to OTA. How did Ted Turner build TBS? He got the Braves on OTA TBS and sold it. This is why the ASN model is so intriguing. All it might take is just getting some great CF, MLB content and they are on their way to becoming the pinko commie millinials ESPN ! Then all of sudden the margins become even tighter for ESPN and the realignment realignment dominos start to fall.

 

[The Real SamC]

on the other hand, ESPN should go the HBO route and just offer all their stuff online via monthly subscription. you can get HBO NOW for $15/month without having cable or satellite. if ESPN offered this, i imagine a huge number of "cord cutters" would sign up. a lot of people can get ~20 channels (including all the networks) free with an antenna. that is the bread and butter of cord cutters. $15/month to get all ESPN channels would be great for the sports nuts.

There is one problem with that. HBO has always been an optional service. So $15/month (or so) if you want it from cable, dish, or now, directly to HBO via the internet. All fine and good.

That does not help ESPN. ESPN's business model is built on forcing itself into the most basic package, and getting $6.15 from everybody. $15 from everybody that wants it doesn't do the trick. The WSJ says they would need $40.

You willing to $40/month for ESPN? And another $10 or $20 for its competitors?