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NBC is not bidding $1 billion out of the goodness of their hearts. They are submitting a bid that is greater then other bids. If ESPN and Fox Sports (FSN) have

NBC is not bidding $1 billion out of the goodness of their hearts. They are submitting a bid that is greater then other bids. If ESPN and Fox Sports (FSN) have less money for bids due to cable cutters, NBC (and CBS) can lower future bid amounts.

Touche 11y ago
Clearly audiences moving to other platforms is a problem for all networks, but that's not a "sports" problem, that's a cable TV problem. NBC is not bidding $1 billion because there are people who are forced to subscribe to ESPN that don't want to. They are bidding $1 billion because there is a high demand for sports programming. I'm arguing against the guy who said that sports leagues are going to go under because people are no longer forced to subscribe to programming they don't want.
- VLM 11y ago
  Total NFL revenue is about $7B, total TV contracts per year across multiple networks annualized to about $3B, in the most recent contract. Just a couple years ago it was about half... but we're not in a bubble ... sure ... a 70 year old sport doubled in real value in a couple years, not just bubble doubled in price, not very believable claim ... If XYZ network could win at a bid of $750M I don't think they'll toss away $250M out of the goodness of their heart by bidding $1B. That's $250M that isn't going toward player salaries, overhead, stadiums, owner profit both immediate and via the estimated value of the team increasing for some future sale, etc. That, is a "sports" problem. If TV revenue were a rounding error on the budget, variation could be ignored, but its not. It varies from sport to sport but very roughly about half the total revenue comes from TV for most popular pro sports. On a technicality, there isn't a $1B bid because of high demand for sports. There's all kinds of things in high demand with no functioning market at all. Think of weed, for example. Anyway the football bid is $1B because they reckon they can sell more than $1B in advertising to baby boomer aged fans or other viewers who still have money to be influenced. Betting on TV commercial revenue increasing in perpetuity for all time is not a good bet to make.

Touche 11y ago

Clearly audiences moving to other platforms is a problem for all networks, but that's not a "sports" problem, that's a cable TV problem. NBC is not bidding $1 billion because there are people who are forced to subscribe to ESPN that don't want to. They are bidding $1 billion because there is a high demand for sports programming. I'm arguing against the guy who said that sports leagues are going to go under because people are no longer forced to subscribe to programming they don't want.

VLM 11y ago
Total NFL revenue is about $7B, total TV contracts per year across multiple networks annualized to about $3B, in the most recent contract. Just a couple years ago it was about half... but we're not in a bubble ... sure ... a 70 year old sport doubled in real value in a couple years, not just bubble doubled in price, not very believable claim ... If XYZ network could win at a bid of $750M I don't think they'll toss away $250M out of the goodness of their heart by bidding $1B. That's $250M that isn't going toward player salaries, overhead, stadiums, owner profit both immediate and via the estimated value of the team increasing for some future sale, etc. That, is a "sports" problem. If TV revenue were a rounding error on the budget, variation could be ignored, but its not. It varies from sport to sport but very roughly about half the total revenue comes from TV for most popular pro sports. On a technicality, there isn't a $1B bid because of high demand for sports. There's all kinds of things in high demand with no functioning market at all. Think of weed, for example. Anyway the football bid is $1B because they reckon they can sell more than $1B in advertising to baby boomer aged fans or other viewers who still have money to be influenced. Betting on TV commercial revenue increasing in perpetuity for all time is not a good bet to make.