By Brad Hubbard | @bradhubbard | 12.8.2016
Recently people began jumping onto the ‘Disney should spin of ESPN’ bandwagon. While I don’t like to deal in hypotheticals, this idea does raise the question about the split we are seeing in content viewing and how that could be a huge benefit to the cord cutting sports fan.
If you examine the media landscape, you have a central divide opening up. On one side you have those who are sports fans and on the other those who aren’t. Yes you have casual fans on both sides but it is becoming apparent that the casual fan is leaning more and more to one side or the other. With the media landscape becoming more and more fragmented and people are being forced to choose with their wallet more so than ever before.
When you look at the rise of OTT services from Netflix to Sling TV, it’s clear that people are choosing more inexpensive choices. If they spend the money on Netflix and a very small cable package, that might be enough for them as opposed to spending on Netflix plus the massive cable bundle just so they can watch the one or two games on the Big Ten Network.
The reasons can be whittled down to two things: 1)people have less money to spend and 2) people just got feed up.
What this means for media is that the days of a central repository for sports, like an ESPN or an FS1, may be less important as the leagues realize that the days of billion dollar sports rights are over. What this also means is that the technology will drive the distribution.
What if the NFL didn’t take ESPN’s $1.9 billion a year for Monday Night Football? What if they took $500 million and just gave ESPN a playoff game, in game highlights? The NFL could develop their own delivery model with say Amazon and see individual packages directly to the consumer. Keeping all of the ad revenue for themselves, cut down on commercial time and probably deliver a better product. Overall revenue will go down but margins should improve for the league and fans would be happier because there would be more interactivity and less commercials which means more action on the field.
The NFL could help make up the difference by selling rights for a lower cost to Facebook and Twitter. Add in selling through apps like Dish’s Sling TV, Apple, Roku, Sony Playstation, XBOX, etc and the league would make up the difference in the giant contracts and probably improve their margins.
Leagues and conferences are going to have to be like the rest of us, hustlers. Yes you can hope for the big payday but odds are that you will have to work two jobs or more to get where you want to be. The fact is that there is a real possibility that the old economic model will be turned on it’s head and leagues, conference and big level broadcasters are going to have to figure out how the new one works for them. In the end this should be good news for the sports fan and in particularly the cord cutting sports fans as they have more options, lower cost and at the end of the day, a better product to watch.