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Broadcasters fear losing free sports telecasts


When FOX dropped out of the race to retain broadcast rights to the BCS college football championship series games late last year, broadcasters became fearful of what appears to be an inevitable trend. Major sporting events are quickly migrating away from free, over-the-air TV to pay television.


ESPN took the four-year rights to the BCS games for $495 million. FOX, who carries the games until 2010, offered $385 million. FOX said it simply couldn't compete with cable with only ad-based revenue streams.


The NAB, the main trade group for the broadcasters, is taking aim at the move of the BCS games to ESPN. After the FOX move, it voted to adopt a resolution advocating free access to major televised sporting events.


Broadcasters continue to support the rights of all Americans to have free access to telecasts of major sporting events, particularly those of publicly funded educational institutions, the NAB resolution said.


In simpler times, members of Congress and the FCC might have taken a harder position in favor of free televised sports. But now, with the towering economic struggles and other world problems bearing down, sports television is a relatively small issue.


Besides, ESPN, one of the most popular pay television services, is already in 90 million homes. That number is expected to increase after Feb. 17, when analog television is turned off in the United States.


With the steady migration of programming and viewers to pay television, it is probably too late for the NAB to be much help anyway. The NAB Television board of directors hereby directs NAB staff to work with policymakers to educate them on the importance of ensuring that no segments of society are disenfranchised from this highly valued programming, the board said.
 

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Quote:
Originally Posted by dcowboy7 /forum/post/15513218


after watching that fox broadcast debacle last nite it cant happen soon enough.

Wonder if you would say the same thing if ala carte happens and ESPN runs upwards of $50+ a month to bring the same type of schedule they have now.
 

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Quote:
Originally Posted by BeachComber /forum/post/15513331


Wonder if you would say the same thing if ala carte happens and ESPN runs upwards of $50+ a month to bring the same type of schedule they have now.

There's never going to be mandatory a la carte. At worst a small decline in users under elective a la carte might cost ESPN part of its massive bargaining edge.
 

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Quote:
Originally Posted by ABCTV99 /forum/post/15513771


No Bodenheimer flatly said the games (other than the Rose Bowl games) will be on ESPN.

Even the Rose Bowl could go to ESPN. From what I hear part of the ABC contract states that, if any of the other BCS Bowl Games goes to cable, ESPN can move the RB from ABC.
 

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Quote:
Originally Posted by BeachComber /forum/post/15513331


Wonder if you would say the same thing if ala carte happens and ESPN runs upwards of $50+ a month to bring the same type of schedule they have now.

If a la carte happens, we'll see those events migrate back to broadcast TV. Without the revenue that comes from extracting that $4 monthly fee out of every cable and satellite household (including those that never watch ESPN), there's no way that ESPN would be able to continue outbidding the broadcasters.
 

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Quote:
Originally Posted by URFloorMatt /forum/post/15514076


There's never going to be mandatory a la carte. At worst a small decline in users under elective a la carte might cost ESPN part of its massive bargaining edge.

It probably wouldn't take many cancelling users under elective a la carte -- if just 10% of households receiving ESPN declined to continue paying for it, the resultant revenue loss to Disney would be over $400 million/year (based on 9 million lost subscribers at $4/month each). I suspect that the loss would actually be much greater, more like 25% of those who are currently paying for ESPN, and that would amount to revenue loss of $1 billion/year.


Of course, Disney could try to make up the difference by jacking up the fee for ESPN, but that would just accelerate the loss of subscribers.
 

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Quote:
Originally Posted by BeachComber /forum/post/15513331


Wonder if you would say the same thing if ala carte happens and ESPN runs upwards of $50+ a month to bring the same type of schedule they have now.

If ESPN goes to >$50 per month it becomes very easy to drop ESPN a la carte and just walk to the local sports bar that provides HD for the few games I care that much about every month. If I have a choice between a fifty dollar bar tab that month and giving $50 every month to the greedy SOBs at Disney, I'd rather be sociable and support my local sports bar.


At $5 to $10 per month a la carte I may consider keeping ESPN.
 

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Given that well over half the nation's viewers never watch any ESPN (or RSN) channel, one would certainly think they might be interested in saving a total of close to $10 a month by electing not to pay for those sports channels.


In some major markets with two (or more) RSNs, the bill could ruin somewhat higher.


In the current -- and apparently future -- economy, it is hard to see how resisting some form of elective a la carte will be beneficial to politicians.


If poor folks are having trouble coming up with $40-$50 for digital converters, why wouldn't some benevolent legislator like to be credited with givng folks back $10 every month?
 

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Quote:
Originally Posted by fredfa /forum/post/15514836


Given that well over half the nation's viewers never watch any ESPN (or RSN) channel, one would certainly think they might be interested in saving a total of close to $10 a month by electing not to pay for those sports channels.

..and there lays the rub.


If nobody is watching ESPN, but still paying for it, doesn't it make sense for them to use all that money to add content that will make the channel worth having for those that aren't watching?


The fact is, that high fee didn't come out of nowhere. A lot of channels are distributed the same way as ESPN, but get nowhere the same fee. If all that was required was shrewd negotiating and a demand for more money, don't you think other channels would be getting more dollars? If there wasn't demand for the channel, would the cable companies really suck it up and pay the freight? Several of them have proven they are will to let entire blocks of channels drop over fees.


Not only that, ESPN has been commanding a higher fee than other channels well before being under the Disney umbrella - way back when ESPN2 was still called "The Deuce" and ESPNews, ESPN Classic and ESPNU simply didn't exist.


Either ESPN has somehow pulled one heck of a magic act, or at least half the people who say they don't ever watch ESPN are flat out liars.
 

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Quote:
Originally Posted by NetworkTV /forum/post/15514911


..and there lays the rub.


If nobody is watching ESPN, but still paying for it, doesn't it make sense for them to use all that money to add content that will make the channel worth having for those that aren't watching?


The fact is, that high fee didn't come out of nowhere. A lot of channels are distributed the same way as ESPN, but get nowhere the same fee. If all that was required was shrewd negotiating and a demand for more money, don't you think other channels would be getting more dollars? If there wasn't demand for the channel, would the cable companies really suck it up and pay the freight? Several of them have proven they are will to let entire blocks of channels drop over fees.


Not only that, ESPN has been commanding a higher fee than other channels well before being under the Disney umbrella - way back when ESPN2 was still called "The Deuce" and ESPNews, ESPN Classic and ESPNU simply didn't exist.


Either ESPN has somehow pulled one heck of a magic act, or at least half the people who say they don't ever watch ESPN are flat out liars.

Squeaky wheels get the grease.
 

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Of course much of the early negotiations gave cable/sat the right to ABC O&Os along with the hefty ESPN sub fees.


ESPN delivers young males to advertisers, and that is not an easy task these days.


But the fact is that no amount of MLB, tennis, rodeo, NCAA football or basketball or even NFL games is going to seduce non-sports folks into watching the ESPN networks.


And why should Disney care if it is pocketing their money anyway?
 

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I would have to (most respectfully) disagree with you, Network TV.


It was only under the Disney umbrella that ESPN's fees rocketed.


Take a look:

ESPN: 1997 $0.73
ESPN : 2006 $ 2.91
ESPN: 2007: $3.26
ESPN: 2008: $3.65

Main Source: SNL Kagan Research
 

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Quote:
Originally Posted by NetworkTV /forum/post/15514911


..and there lays the rub.


If nobody is watching ESPN, but still paying for it, doesn't it make sense for them to use all that money to add content that will make the channel worth having for those that aren't watching?


The fact is, that high fee didn't come out of nowhere. A lot of channels are distributed the same way as ESPN, but get nowhere the same fee. If all that was required was shrewd negotiating and a demand for more money, don't you think other channels would be getting more dollars? If there wasn't demand for the channel, would the cable companies really suck it up and pay the freight? Several of them have proven they are will to let entire blocks of channels drop over fees.


Not only that, ESPN has been commanding a higher fee than other channels well before being under the Disney umbrella - way back when ESPN2 was still called "The Deuce" and ESPNews, ESPN Classic and ESPNU simply didn't exist.


Either ESPN has somehow pulled one heck of a magic act, or at least half the people who say they don't ever watch ESPN are flat out liars.


ESPN's own figures show that only roughly 12% of cable/satellite/MSO subs ever view any of the ESPN Channels. ala carte means well over 80%+ of the subs disappear and that $50 per month it becomes very easy to drop ESPN a la carte and just walk to the local sports bar that provides HD for the few games I care that much about every month. If I have a choice between a fifty dollar bar tab that month and giving $50 every month to the greedy SOBs at Disney, I'd rather be sociable and support my local sports bar.


At $5 to $10 per month a la carte I may consider keeping ESPN.



And thus many bars will be unable to afford the over the top ESPN rates either at that point.
 

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Quote:
Originally Posted by fredfa /forum/post/15514836


Given that well over half the nation's viewers never watch any ESPN (or RSN) channel, one would certainly think they might be interested in saving a total of close to $10 a month by electing not to pay for those sports channels.

Aren't you extrapolating from data here? Just because ESPN has never pulled more than 50 million viewers has no bearing on how many people watch ESPN in a given year. ESPN airs different sports. Different people watch different sports. MNF has its followers; the NBA has its followers; the MLB has its followers; etc., etc.


Or is there a survey out there that actually found 50% of viewers never ever ever watched ESPN in an entire year?
Quote:
Originally Posted by fredfa /forum/post/15514950


I would have to (most respectfully) disagree with you, Network TV.


It was only under the Disney umbrella that ESPN's fees rocketed.


Take a look:

ESPN: 1997 $0.73
ESPN : 2006 $ 2.91
ESPN: 2007: $3.26
ESPN: 2008: $3.65

Main Source: SNL Kagan Research

No, I think this is just a tacit nod to the fact that we live in a DVR world now. Live sports bring in eyeballs that network programming doesn't. And while NBC, CBS, and ABC have to justify to advertisers that people are watching their ads and not fast-forwarding through them, ESPN doesn't have that problem. This makes ESPN's product much more valuable than Fox and CBS, especially since ESPN programming isn't available over the Internet. (Just look at TWC's complaint about Viacom in their recent Jan. 1 dispute.)
 

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FWIW, many of the games shown on ESPN networks are available for free online through ESPN360.com for users of participating ISPs (including FiOS
). There are occasional blackouts (mainly when a local broadcast outlet is carrying the game), but I've seen plenty of national ESPN/ESPN2/ESPNU games being simulcast, games not shown locally when they do regional coverage (e.g. 3:30PM college football games), and ESPN Plus games.
 

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Quote:
Originally Posted by fredfa /forum/post/15514950


I would have to (most respectfully) disagree with you, Network TV.


It was only under the Disney umbrella that ESPN's fees rocketed.


Take a look:

ESPN: 1997 $0.73
ESPN : 2006 $ 2.91
ESPN: 2007: $3.26
ESPN: 2008: $3.65

Main Source: SNL Kagan Research

Except it was $0.73 over ten years ago. Name more than a couple other (non-Disney) channels that even get that even NOW.


Of course negotitating through Disney jumped the price up much quicker. That was to be expected. However, note that the second price was nearly 10 years after the first rate and the first price would still be a kingly sum at its time.
 
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