PAC-12 Chaos

[nelsonmuntz]

If Fox wants a team in the B1G, they will add $$ to the contract to make it happen. Same with NBC and CBS. One of Greg Fluguar's sources said CBS and NBC have already agreed to pay extra for Washington and Oregon. Fluguar has been spot on with how everything has played out so far, so I'm inclined to believe him.

Any network that doubled down on its linear revenue model would get shredded in the market. Everything is going streaming, and that requires a completely different revenue and expense model for the networks. Props to the Big 10 for getting the last massive linear TV contract. There will not be another one like it.

 

[Rufus]

The PAC-12 deal is horrible for several reasons. Here is the number one reason it's bad:

Athletic Departments run on budgets. They have to know how much revenue is coming in to know what they can spend on. Too much of the Apple deal revolves around "incentives" for the number of new subscribers each team can bring to Apple. An athletic department cannot project revenues/expenses on "anticipated" income. That is a disaster in the making.

Think of it like this..........upon the launch of the PAC-12 Network, Larry Scott gave the PAC-12 schools numbers on how much money the network would bring in. Knowing he had to project, he gave a low-range number, an expected number, and a high-range number. Turns out the network made WELL BELOW the low-range number! This deal will destroy athletic department budgets if that happens with Apple. Too risky.

 

[billybud]

Both Forde and Action Network’s Brett McMurphy reported there’s an escalator clause in the contract that could make the deal increase to nearly $10 billion if the Big Ten expands further.

 

[hoopsfan22]

If Fox wants a team in the B1G, they will add $$ to the contract to make it happen. Same with NBC and CBS. One of Greg Fluguar's sources said CBS and NBC have already agreed to pay extra for Washington and Oregon. Fluguar has been spot on with how everything has played out so far, so I'm inclined to believe him.

Anyone can say anything. This is probably the last round of crazy big super humungous TV contracts and with the rate at which the landscape is changing, I doubt any network is going to rush in to offer more money right now. I guess they could but that would be dumb.

 

[nelsonmuntz]

You're just describing the average sports fan.

Putting the league behind a paywall is going to kill their ratings and exposure. If you're a PAC-12 fan it's pretty great. All your stuff in one spot and for relatively cheap.

But if you're just a football fan it's awful. I watch a ton of PAC-12 football. PAC after dark is a staple in my friend group because it's always on late at night when we're all hanging out at someone's house.

None of us are going to sign up for Apple TV just to keep watching it though. We'll put a MWC game on instead.

I imagine we are not that unique.

You sound like Whaler, who complained about the FoxSports contract for the Big East by arguing that ESPN's attractive channel locations in the cable menu were valuable.

The average sports fan is cutting the cord just as fast as every other cable ex-customer.

 

[CL82]

What I want to know is what happened to the supposed "linear partners"? I mean, even having some games on the CW would make this deal more attractive. Edison to say that games on The CW is actually attractive, it's just better than no linear whatsoever.

Also what's up with the nonsense of "the longer this goes on the more people that are coming to the table"? The deal is only Apple. Does that mean people came to the table looked at what was on it and said "yeah, I'll pass"?

 

[nelsonmuntz]

The problems with the Apple proposal...

1...For the next few years most of US football fans will access live football via linear channels
2...there may not be nationsl demand to watch Pac 12 games and purchase streaming...and not enough PAC 12 interest as is.
3...Apple does stream MLS...but has no production involvement...the football streaming production would seem to be up to the PAC 12.
4....Trading known revenue for a business model that predicates growth to receive a competitive return. Growth that some analysts do not see happening

I suspect that a reason that CBS and NBC were willing to pay up a little for Big 10 contact is that they want to seed ParamountPlus and Peacock sports content. Test the waters. The world is going streaming at light speed.

When the CEO of Disney gets on TV and craps all over ESPN, his former cash cow, while offering to sell it, you know that linear is dead.

 

[JMick]

You sound like Whaler, who complained about the FoxSports contract for the Big East by arguing that ESPN's attractive channel locations in the cable menu were valuable.

The average sports fan is cutting the cord just as fast as every other cable ex-customer.

Every sports fan I know that doesn't have cable has YTTV or Hulu with live sports. If their deal was with YouTube it would make a ton of sense. I know barely anyone that has Apple TV and I'm in my early 30s. I certainly don't expect people to spend an extra $26/mo to watch games they don't actually care about all that much.

"Cable" a la carte is the future. A major hub like YouTube where you have a more specific choice in what you pay for compared to cable. The future is not standalone services.

 

[ZooCougar]

You sound like Whaler, who complained about the FoxSports contract for the Big East by arguing that ESPN's attractive channel locations in the cable menu were valuable.

The average sports fan is cutting the cord just as fast as every other cable ex-customer.

Yeah but they aren’t going to Apple to get their sports. They are going to YouTube for streaming because it’s essentially just Cable TV that you get over the internet. The only thing that changed is the mode of transmission.

 

[Dizzy21]

This is exactly right. The new PAC-12 deal isn't as bad as people think.

I am pretty sure Apple tied the deal to the growth of its Apple plus subscription base. In other words, Apple is counting on all the PAC-12 schools to help grow its network. Apple will pay these schools based on the amount of growth schools brought in.

People should not underestimate Apple. Apple is far more innovative than other media companies like ESPN etc. Apple can make all the PAC-12 content far more interactive, which can create a far better fan experience in the future vs other platforms. If anything, this is the future of live sporting events with plenty of interactive fan experience tied to social media etc. I like to think of it akin to online gaming that's extremely addictive to all the youth today.

If UConn can't get into the B12, it should be looking into partnering with a company like Apple for future content deals. Big East should do the same.

I am hoping the proposed contract will be good enough to hold the PAC together. Hopefully, it will be good enough to get UConn to be #14.

This is exactly it. ESPN is simply stuck in what they do, plugging holes, attempting to keep subscribers, and try to come up with impossible ways to keep their model afloat. Apple is an innovative company that prints money and is looking at different ways to get into this business and make money. Apple is simply in a much better place, has more resources to make it work in many different ways, has better business talent and is actively looking to get into doing this rather than ESPN who is forced into a predetermined model and just looking to survive. It may be short sighted to take the bag in dealing with a company trying to find its identity and a way to make money vs take a bit less and working with a company that has a vision for the future and the backing to be successful in it.

 

[ZooCougar]

I suspect that a reason that CBS and NBC were willing to pay up a little for Big 10 contact is that they want to seed ParamountPlus and Peacock sports content. Test the waters. The world is going streaming at light speed.

When the CEO of Disney gets on TV and craps all over ESPN, his former cash cow, while offering to sell it, you know that linear is dead.

Peacock just announced that they lost $450M. They can’t even give away subscriptions. Its days are numbered.

Streaming is the future but not in the way you think.

 

[Bongo Fury]

You're just describing the average sports fan.

Putting the league behind a paywall is going to kill their ratings and exposure. If you're a PAC-12 fan it's pretty great. All your stuff in one spot and for relatively cheap.

But if you're just a football fan it's awful. I watch a ton of PAC-12 football. PAC after dark is a staple in my friend group because it's always on late at night when we're all hanging out at someone's house.

None of us are going to sign up for Apple TV just to keep watching it though. We'll put a MWC game on instead.

I imagine we are not that unique.

You might if they were broadcasting a team(s) or conference you were interested in. For the older general population maybe not.

 

[JMick]

Yeah but they aren’t going to Apple to get their sports. They are going to YouTube for streaming because it’s essentially just Cable TV that you get over the internet. The only thing that changed is the mode of transmission.

It's like he's 5 years behind on what everyone's doing.

 

[billybud]

Streaming is just an access method...for instance..I stream the linear ESPN channels...I have DTV and I get the option to stream and the content comes through my home network. I stream their signal.

DTV calls it "the signal saver" option.

 

[Rufus]

If the SEC or B1G went all digital, I guarantee you they would not be tied down to some silly incentive payment that requires the teams to find people to buy a subscription to the digital provider. They would have contracts with guaranteed payments.

Apple is only offering the PAC-12 teams a guaranteed payment in the range of $15-$20 million. If I were a PAC-12 school, I would be looking for my exit now. Not to mention, the PAC-12 teams will have to spend their own money to produce the games, as Apple is only providing the means to distribute. That probably lowers the payout revenue by $1-$2 million right there.

 

[ZooCougar]

Every sports fan I know that doesn't have cable has YTTV or Hulu with live sports. If their deal was with YouTube it would make a ton of sense. I know barely anyone that has Apple TV and I'm in my early 30s. I certainly don't expect people to spend an extra $26/mo to watch games they don't actually care about all that much.

"Cable" a la carte is the future. A major hub like YouTube where you have a more specific choice in what you pay for compared to cable. The future is not standalone services.

I don’t know anyone who still has cable. It’s an inferior product that costs more. Most people are too smart for that.

 

[JMick]

Peacock just announced that they lost $450M. They can’t even give away subscriptions. Its days are numbered.

Streaming is the future but not in the way you think.

I got peacock for free and I don't even use it because it's garbage. They're all garbage. It's like no one realizes why Netflix was popular and what started this "streaming is the future" trend. People think it's about not paying for cable when in reality it's about having everything you want in one place.

 

[JMick]

I don’t know anyone who still has cable. It’s an inferior product that costs more. Most people are too smart for that.

I switched to YTTV and am back to cable because my cable company gave me an absurd discount for 2 years. I'll be back to YTTV when the promotion runs out unless they extend it again.

 

[nelsonmuntz]

Every sports fan I know that doesn't have cable has YTTV or Hulu with live sports. If their deal was with YouTube it would make a ton of sense. I know barely anyone that has Apple TV and I'm in my early 30s. I certainly don't expect people to spend an extra $26/mo to watch games they don't actually care about all that much.

"Cable" a la carte is the future. A major hub like YouTube where you have a more specific choice in what you pay for compared to cable. The future is not standalone services.

You should short Apple stock. Let me know how that goes.

Does it matter to ESPN if you are right (a la carte "cable") or I am right (standalone services)? Either way, the worldwide leader is in big trouble. Which means there won't be a lot more mega TV deals for the Big 10 or SEC.

 

[ZooCougar]

I got peacock for free and I don't even use it because it's garbage. They're all garbage. It's like no one realizes why Netflix was popular and what started this "streaming is the future" trend. People think it's about not paying for cable when in reality it's about having everything you want in one place.

I use it for IndyCar and Premier League. It’s $5.99 I don’t see how they can be making money or hope to.

 

[JMick]

You should short Apple stock. Let me know how that goes.

Does it matter to ESPN if you are right (a la carte "cable") or I am right (standalone services)? Either way, the worldwide leader is in big trouble. Which means there won't be a lot more mega TV deals for the Big 10 or SEC.

Apple is more than just their streaming service... I'm not sure that's much of a "gotcha"

 

[ZooCougar]

I switched to YTTV and am back to cable because my cable company gave me an absurd discount for 2 years. I'll be back to YTTV when the promotion runs out unless they extend it again.

I like YTTV so much that they would have to offer me something like 30 bucks a month to even consider switching back.

 

[nelsonmuntz]

Peacock just announced that they lost $450M. They can’t even give away subscriptions. Its days are numbered.

Streaming is the future but not in the way you think.

Arguing that the problems of the linear network that was the last one to take streaming seriously as a threat means that streaming should not be taken seriously as a threat to linear networks is not a great argument.

There are a dozen ways that streaming can go, and I do not have a crystal ball. I do know that betting on linear right now is like being a beeper salesman in 1999.

 

[JMick]

I like YTTV so much that they would have to offer me something like 30 bucks a month to even consider switching back.

When more sports are produced in 4K I'll be totally done with cable. Getting 720p and 1080p signal still is the worst part about having cable, imo

 

[huskymedic]

The key =/- factor to the PAC12 media deal is going to be the length of the contract/GOR