Has ESPN Bit Off More Than It Can Chew?

dkreichen1968

Moderator
Staff member
#1
Can ESPN keep shelling out millions for rights to broadcast big sporting events after major defections from cable and satellite providers?

Is the sport giant reeling as its subscriber base shrinks and how will this affect BYU, the Pac-12, Big 12 and other sports franchises who count on cable coin?

It's a real issue, as documented by numerous news outlets, including the Wall Street Journal. ESPN’s income is shrinking while its obligations have never cost more...

The ESPN bubble, some say, is about to burst. It has promised billions to the NBA, college sports, the NFL and other sports leagues. This has allowed athletes huge salaries, teams historic profits and conferences bragging rights over big deals — all based on money yet to be collected by rights buyer ESPN. And the revenue is not coming in at the rate estimated when all those huge contracts were announced with glee.

Industry experts say ESPN must cut $400 million in 24 months after it lost seven million subscribers over the past four years. The sports giant could lose two to three million more subscribers in the next year as viewers are cancelling their bundled packages with cable and satellite companies. ESPN must ante up about $6 billion a year for rights it bought with revenue that’s declining.
Read More: Dick Harmon: Cable TV 'cord-cutting' about to spell major trouble for ESPN? | Deseret News

Us OTA TV fans could see this coming. People only have so much disposable income, and pay TV networks like ESPN can't expect people to continue to spend more and more of that income on them. We've had the "Dot Com" bubble, a housing bubble, and now it seems a sports bubble. Over inflated prices for people throwing, kicking, batting, and bouncing balls around. ESPN of course has been riding on the backs of non-sports fans by collecting money from the "bundle", but the bundle is starting to fall apart. Can ESPN survive as that happens?
 

MrPogi

Moderator, , Webmaster of Cache Free TV
Staff member
#2
ESPN has brought this upon itself. Their evil plan to offer large payments and deny other networks rights to sporting events has caused bidding wars with other networks and boosted prices to ridiculous levels.
 

Tim58hsv

DTVUSA Member
#3
Seems they may have a couple of options left.

1. Start a stand alone service like HBO did.

2. Put their product over the air and hope advertisers pony up to pay ESPN's bills.

Either way, it looks like their glory days are behind them.
 

BCrazy

Contributor
#4
I think they'll be just fine. Because they locked up coverage of so many events, people who want to see certain games, like the College Football Playoff, will still have to tune in to ESPN. And even with people dropping satellite and cable bundles, ESPN has gotten in with alternative forms of streaming, like Playstation Vue.
 
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