Commentary

Why Lots of Live Sports Won't Happen That Soon Online

The first Sunday of the NFL season is just three days away, and John Skipper, the president of ESPN, is making news by telling attendees at a Re/Code conference in Los Angeles that sports on TV is secure.

This is not a real headline. The idea that pro football games would become available only online, or mostly online any time soon, seems impossible. But as the Re/Code story reiterates, ESPN will likely be part of Dish's online sampling of networks, and Major League Soccer might become a featured ESPN attraction online.

But soccer isn't football. Not in this country.

TV networks would likely do anything to prevent the NFL from going away. So would the press -- and those most honorable jocks in Congress.

A great posting from MoffettNathanson this morning points out just how much the NFL means to the broadcast networks and ESPN (and vice versa). 

advertisement

advertisement

Looking at The Somewhat Big 4, the report notes that 38% of the Fox network’s total day C3 P18-49 gross rating points from September 2013 to August 2014 came from NFL games or associated programming, not counting another 5% from the Super Bowl. 

At CBS, that similar figure was 18%; it was 13% at NBC and 9% at ESPN. (ABC doesn’t air pro football.)

Pretty clearly, the networks live off of pro football, and pay dearly to do so. The MoffettNathanson posting also points out that this year, the new, ridiculous NFL network contracts kick in.

And the kick is good!  

“This is set to drive the programming costs higher beginning this quarter for all the networks,” the report says. “We estimate the new programming rights deals are set to grow at a range of +5-7% over the life of their deals,” the report says.

All told, the various rights holders will pay 22% more for the NFL this year ($5.526 billion) than they did last year ($4.435 billion).

The best shot for an online content provider to be able to engage in giving the NFL a billion dollars or so would seem to be grabbing the rights to DirecTV’s Sunday Ticket package, which expires after this season. In the past, Netflix has been a rumored suitor, but Google or, gees, Yahoo, could be there, too.  

Back to Skipper and ESPN. He told Re/code’s Peter Kafka that ESPN’s not overly worried millennials--always seen cutting cable cords hither and yon--will continue doing that. They’ll get cable when they get married, get kids, get a home, get bored and/or all of the above. And they’ll do it so they can watch The Big Game.

That’s what everybody says. Sports, unlike news or entertainment, is something devotees will pay to get or keep because they simply can't get it elsewhere. 

But not everybody really cares. And that’s also why you can’t get a cable package without getting ESPN, whether or not you have any animosity toward balls that others kick, bat or violently stuff into cylinders. The leagues and ESPN need everybody to pay up. Cable operators must pay.

Luckily for leagues, online video helps them maintain a pretty nice status quo, with some benefits. If online video didn’t exist, sports leagues would have invented it instead of Al Gore. It’s leverage.

Because some sports do go online, that leakage, and its threat, keeps everybody fat and rich. Indeed, the FCC is considering doing away with the “blackout rule” but the league spins it this way: If home games that aren’t sold out can’t be blacked out, it will cost the NFL money and hasten a time when more and more games go to pay sources... like online video content providers.

And you don’t want that, do you Mr. Congressman?

Of course not.


pj@mediapost.com
5 comments about " Why Lots of Live Sports Won't Happen That Soon Online ".
Check to receive email when comments are posted.
  1. Brian Reich from little m media, September 5, 2014 at 1:56 p.m.

    Do you mean John Skipper, the President of ESPN?

    http://recode.net/2014/09/04/espn-president-john-skipper-says-hes-not-the-one-raising-your-cable-rates/

  2. Douglas Ferguson from College of Charleston, September 5, 2014 at 2:04 p.m.

    My sympathy goes to your grandmother who never watches sports, but still pays $5 a month for ESPN so that you won't have to pay the proportional cost of your sports consumption. Most of the other cable channels cost substantially less, so don't complain that you help fund her HGTV shows.

  3. pj bednarski from MediaPost.com, September 5, 2014 at 2:14 p.m.

    Oh my goodness...Thank you Brian Reich, for that.

  4. Paula Lynn from Who Else Unlimited, September 5, 2014 at 2:28 p.m.

    Your heart doesn't bleed for those nonprofit organizations ?

  5. Dan Ciccone from Kiip, September 5, 2014 at 2:55 p.m.

    I'd like Skipper to define "soon."

    At the end of the day, the NFL is about the NFL and ESPN and the cable networks need the NFL more than the NFL needs them.

    According to ESPN's own article - http://espn.go.com/nfl/story/_/id/10350802/poll-indicates-49-percent-americans-pro-football-fans - almost half of all Americans watch NFL football.

    Why not a PPV model? Let's say the NFL charges $300 for a season pass to watch any/every game and conservatively, 30 million HHLDs sign up - that gets them to $9 billion. Maybe there's an additional $50 fee as the Super Bowl becomes a PPV event - that gets the NFL another $1.5 billion and we haven't factored in sponsors or international distribution $$$$ yet.

    $350 for 4 months of unlimited NFL is pretty attractive vs. having to subscribe to a cable contract that is bloated with programming nobody wants.

    However, it's all moot. As more and more people move to online video consumption, the cable operators will just increase broadband fees. The cable operators have options - I don't know that many cable or broadcast networks will.

    .......soon......

Next story loading loading..