Streaming College Sports

[nelsonmuntz]

Since you cannot keep up, I will slow down and explain the obvious to you.

I do the over-the-top bombast mocking your idiocy (UCONN AND UMASS SIMPLY SHOULD ASK FOR A PRO RATA CUT OF THE CFP BECAUSE THEYLL OBVIOUSLY GET IT). It shows how absolutely delusional you and noyenox are that you cannot see the obvious mockery. You both sound insane. You probably subscribed to Quibi, too.

The truth is the second post, which is that both sides get to save face. But the overall reality is cable is not dying nearly as fast as you think it is. This deal proves that. Again. As I have told you over, and over, and over, and over again.

This will take longer than you think.

The Charter-Disney showdown didn't transform the TV industry, after all, despite the hype

Charter and Disney reached an agreement before "Monday Night Football" in a rights deal that isn't transformational despite earlier rhetoric.

www.cnbc.com

You should tell your genius writers to call Iger and tell him he won so he can stop dumping his linear businesses.

Mogul Byron Allen makes $10 billion bid for Disney's ABC, other networks

(Reuters) -Media entrepreneur Byron Allen has made a $10 billion bid to buy Walt Disney's ABC television network and assets including the FX and National Geographic cable channels, a spokesperson for Allen said on Friday. Disney has also held exploratory discussions about selling ABC to...

finance.yahoo.com

If Disney's win was so spectacular, how come they were trying to sell out of their linear businesses before the week was over?

If Disney can get $10 billion, it should take the deal. Bloomberg estimates ABC's value at $4 billion, although I do not know if that is an apples to apples comparison since I do not know what this potential buyer is buying out of Disney.

https://www.nasdaq.com/articles/walt-disney-co.-explores-sale-of-abc-network-and-stations

 

[nelsonmuntz]

Iger is not messing around. He has accelerated the Hulu buyout discussion with Comcast (20% owner of Hulu) and is now dumping ABC. ESPN has to be on the block.

If Iger is really moving this fast, then Disney had to be involved in the decision to pay to raid the Pac 12. Look at the commitment that Disney/ESPN made over the summer to raid the Pac 12:

Big 12: 7 years (2024 through 2031) of 4 schools at $24/school* = $672 million
ACC: 12 years (2024 through 2036) of 3 schools at $25/school** = $900 million

* = guess at ESPN's share of Big 12 contract
** = guess at the per school, per year average for remainder of the contract.

That is over a billion and a half dollars committed to buy the games of Utah, Arizona, Arizona State, Colorado, Cal, Stanford and SMU through 2031 or 2036. I would assume that commitments that big and that long have to be authorized at least at the CFO level, if not Iger himself. It is possible that amending an agreement that has $3 billion left on it (ACC) and whatever ESPN's remaining commitment to the Big 12 is, which has to be in the billions, might have needed Board approval.

I am a little surprised Disney went this big on tearing up the Pac 12 if it was trying to sell ESPN quick, especially because Disney must have known there was a Charter problem when they helped the Big 12 and ACC raid the Pac 12. You would have thought Disney would be against adding fixed costs to its linear platform. The first two explanations that I can think of are:

1) Iger was so worried about what Apple getting into the sports business would do to ESPN's value, that he authorized the commitment to the Big 12 and ACC, and maybe gave a nudge to the Big 10's network backers to add UCLA, USC, Washington and Oregon, just to keep Apple out.

2) Iger is worried about losing one of the pro leagues. A pro league at major risk of leaving ESPN would come up during diligence by any acquirer. A pro league leaving ESPN would put the carriage fees in serious jeopardy, and ESPN would need to have as much content as possible to offset the sting of losing one of the Big 3 (NFL, NBA, MLB).

I think it was a little of both.

 

[huskymedic]

 

[djct1999]

I have seen people do some stupid stuff in M&A over the years, so Iger may pull a rabbit out of his hat. Apple won’t do it, but there are buyers. I don’t see the sports leagues paying much for it either. Why buy a company they are about to put out of business?

Time is Iger’s enemy. He needs to get it sold soon.

Someone will buy it. Just not at that valuation.

 

[UConnJim]

ESPN doesn't have a viewer problem, it has a distribution problem. Their historical distribution through the cable bundle with cable companies is coming to an end and they need to figure out a way to grow revenues through a new distribution model. Unfortunately, I think it will take too long for Disney to transition to a streaming model, so it makes more sense for a streamer with deep pockets and a large revenue base to buy ESPN. Think companies like Amazon, Google (YouTube), Apple, or Netflix.

Think about this. Netflix pays about $18 billion per year on content and ESPN spends about $9 billion on media rights.

There is substantial brand equity with ESPN and they have tons of content with personalities, sports rights, old games,... With streaming, you could put every one of their old games on line. It's easier to buy vs build from scratch. There is no other sports media asset similar to ESPN.

 

[nelsonmuntz]

ESPN doesn't have a viewer problem, it has a distribution problem. Their historical distribution through the cable bundle with cable companies is coming to an end and they need to figure out a way to grow revenues through a new distribution model. Unfortunately, I think it will take too long for Disney to transition to a streaming model, so it makes more sense for a streamer with deep pockets and a large revenue base to buy ESPN. Think companies like Amazon, Google (YouTube), Apple, or Netflix.

Think about this. Netflix pays about $18 billion per year on content and ESPN spends about $9 billion on media rights.

There is substantial brand equity with ESPN and they have tons of content with personalities, sports rights, old games,... With streaming, you could put every one of their old games on line. It's easier to buy vs build from scratch. There is no other sports media asset similar to ESPN.

ESPN has a big content problem, because most of their best content providers, like the pro leagues, want to go DTC themselves. ESPN could always overpay for core content because the carriage fees gave it a huge revenue advantage relative to other outlets. Now everyone has the same access to viewers, and ESPN's carriage fees are declining. Every sports league started a channel, which was effectively direclty competing with ESPN, but in a streaming world, ESPN does not have the channel real estate advantage it had before. The major pro leagues are already marketing DTC or with the internet providers. I get three emails a week from Frontier selling me NFL League Pass.

Even the blackouts seem like they are going to be more limited in the future. How much longer will the pro teams continue to block out games if the ESPN subscriber universe is declining?

 

[UConnJim]

ESPN has a big content problem, because most of their best content providers, like the pro leagues, want to go DTC themselves. ESPN could always overpay for core content because the carriage fees gave it a huge revenue advantage relative to other outlets. Now everyone has the same access to viewers, and ESPN's carriage fees are declining. Every sports league started a channel, which was effectively direclty competing with ESPN, but in a streaming world, ESPN does not have the channel real estate advantage it had before. The major pro leagues are already marketing DTC or with the internet providers. I get three emails a week from Frontier selling me NFL League Pass.

Even the blackouts seem like they are going to be more limited in the future. How much longer will the pro teams continue to block out games if the ESPN subscriber universe is declining?

Sunday ticket has been around since 1994 so consumers have had access to the NFL for years. I think most sports fans want variety vs going really deep on an individual sport. And, the Pac 12 went direct to the cable companies instead of partnering with ESPN (SEC Network) or Fox (Big 10 Network) and failed miserably.

The most important thing with a potential acquisition of ESPN is the operating margin. For Netflix or Amazon, ESPN is margin accretive to their current businesses, more so to Amazon than Netflix. Unfortunately, selling ESPN will hit Disney's margins, but that is being priced into the stock and it would improve Disney's growth outlook.

 

[nelsonmuntz]

https://www.reuters.com/markets/deals/disneys-espn-could-be-valued-24-bln-likely-buyers-include-apple-verizon-bofa-2023-11-01/

Iger is going to go down as either a genius that found the last sucker willing to overpay for a rapidly shrinking asset, or the guy that waited too long to dump the aging former crown jewel of the Disney empire.

I think the value of ESPN is much less than $24 billion. We will see just how good a deal maker Iger is.

It is worth noting that Disney stock is up about $10/share since it released ESPN financials as part of its effort to sell part or all of ESPN. The market likes that Disney is trying to get rid of the worldwide leader in sports.

 

[nelsonmuntz]

Sunday ticket has been around since 1994 so consumers have had access to the NFL for years. I think most sports fans want variety vs going really deep on an individual sport. And, the Pac 12 went direct to the cable companies instead of partnering with ESPN (SEC Network) or Fox (Big 10 Network) and failed miserably.

The most important thing with a potential acquisition of ESPN is the operating margin. For Netflix or Amazon, ESPN is margin accretive to their current businesses, more so to Amazon than Netflix. Unfortunately, selling ESPN will hit Disney's margins, but that is being priced into the stock and it would improve Disney's growth outlook.

Disney reveals ESPN revenue breakdown for the first time

The update will help investors set expectations for ESPN's upcoming DTC service as well as any potential divestitures.

finance.yahoo.com

Margins are solid, but likely shrinking rapidly as carriage fees shrink.

 

[Rufus]

Not sure which thread was best to post this ---- WWE Raw will air exclusively on Netflix starting next year in a 10 year, $5 billion deal.

https://www.reuters.com/business/media-telecom/netflix-stream-wwe-raw-2025-2024-01-23/#:~:text=Jan%2023%20(Reuters)%20%2D%20Netflix,Entertainment%27s%20Raw%20from%20January%202025.

It was already announced that WWE Smackdown will move from FOX to USA and WWE NXT will move from USA to CW at the same time.

All at record profits for WWE.

 

[ZooCougar]

Not sure which thread was best to post this ---- WWE Raw will air exclusively on Netflix starting next year in a 10 year, $5 billion deal.

https://www.reuters.com/business/media-telecom/netflix-stream-wwe-raw-2025-2024-01-23/#:~:text=Jan%2023%20(Reuters)%20%2D%20Netflix,Entertainment%27s%20Raw%20from%20January%202025.

It was already announced that WWE Smackdown will move from FOX to USA and WWE NXT will move from USA to CW at the same time.

All at record profits for WWE.

Entertainment board

 

[uconntailgater]

Netflix is slowly getting into the sports arena. With Netflix offering an ad base plan live sports would be an attractive revenue model for advertisers.

MSN

www.msn.com