4 ms·

The problem with ESPN isn't that it's losing subscribers. The problem is that it's losing subscribers while it's tied into incredibly expensive exclusivity cont

The problem with ESPN isn't that it's losing subscribers. The problem is that it's losing subscribers while it's tied into incredibly expensive exclusivity contracts with sports leagues, like Major League Baseball or the National Football League. These contracts form the vast majority of ESPN's expenses and give it the vast majority of its content. This means that, unlike other companies, or even other media companies, it's not clear how ESPN can easily and quickly cut costs to match its declining revenue.

sk5t 10y ago
Trying to save money is a loser's game in ESPN's business, and in many others too--imagine telling Blockbuster Video to keep the business going by securing cheaper leases. ESPN needs to break its addiction to high cable TV royalties and give people the sports content the way they want to view it, and stop chasing the ridiculous celebrity angle, personal gossip, hashtags, etc.
in_cahoots 10y ago
I've never understood this argument. Contracts are a two-way street; why should the NFL demand ever-increasing fees for a product that's being watched by fewer and fewer people? Network rating have been down for years, it's only recently that ESPN has been following the same trend. At some point the sports leagues will have to realize that declining viewership means smaller contracts, it's just a question of whether ESPN can survive until that day.
- quanticle 10y ago
  >I've never understood this argument. Contracts are a two-way street; why should the NFL demand ever-increasing fees for a product that's being watched by fewer and fewer people? Exactly. As bad as this is for ESPN, it's even worse for the NFL. Ticket prices cannot sustain the league. Merchandising cannot sustain the league. The only thing that can sustain a league as rich as the NFL is massive television royalties. I predict that the next few years are going to be very uncomfortable, as the NFL and TV networks have some very tense negotiations over how much the product (football games) is actually worth.
  - SixSigma 10y ago
    Those $100-330m college stadiums are going to look pretty stupid with 20k people in an 80k stadium too, if RL audiences shrink the same way. http://www.therichest.com/luxury/most-expensive/college-footballs-most-expensive-stadiums/ http://www.therichest.com/luxury/most-expensive/college-foot...
    - freehunter 10y ago
      Eh, attending a football game and watching one on TV are two different things. My wife would never watch NASCAR on TV, but she loves going to races. She'd never watch football on TV, but she loves tailgating and sitting in the stadium. She absolutely hates baseball, but we're season ticket holders for our local minor league team.

sk5t 10y ago

Trying to save money is a loser's game in ESPN's business, and in many others too--imagine telling Blockbuster Video to keep the business going by securing cheaper leases. ESPN needs to break its addiction to high cable TV royalties and give people the sports content the way they want to view it, and stop chasing the ridiculous celebrity angle, personal gossip, hashtags, etc.

in_cahoots 10y ago

I've never understood this argument. Contracts are a two-way street; why should the NFL demand ever-increasing fees for a product that's being watched by fewer and fewer people? Network rating have been down for years, it's only recently that ESPN has been following the same trend. At some point the sports leagues will have to realize that declining viewership means smaller contracts, it's just a question of whether ESPN can survive until that day.

quanticle 10y ago
>I've never understood this argument. Contracts are a two-way street; why should the NFL demand ever-increasing fees for a product that's being watched by fewer and fewer people? Exactly. As bad as this is for ESPN, it's even worse for the NFL. Ticket prices cannot sustain the league. Merchandising cannot sustain the league. The only thing that can sustain a league as rich as the NFL is massive television royalties. I predict that the next few years are going to be very uncomfortable, as the NFL and TV networks have some very tense negotiations over how much the product (football games) is actually worth.
- SixSigma 10y ago
  Those $100-330m college stadiums are going to look pretty stupid with 20k people in an 80k stadium too, if RL audiences shrink the same way. http://www.therichest.com/luxury/most-expensive/college-footballs-most-expensive-stadiums/ http://www.therichest.com/luxury/most-expensive/college-foot...
  - freehunter 10y ago
    Eh, attending a football game and watching one on TV are two different things. My wife would never watch NASCAR on TV, but she loves going to races. She'd never watch football on TV, but she loves tailgating and sitting in the stadium. She absolutely hates baseball, but we're season ticket holders for our local minor league team.