Next Shift in College Sports?

[Goose85]

In the past couple years the Big Conferences all made the big money grab with new TV deals. ESPN and others paying huge sums to be able to provide their conferences product. Now many of these schools are banking on that income.

Recent events may signal a coming shift in the pay tv model that could affect these TV deals in the not so distant future.

Time Warner had a contract dispute with CBS.
Locally we haven't had NBC on Time Warner for awhile. NBC thought viewers would demand to see Packer preseason games. Didn't happen. Time Warner, and other providers, have warned about switching carriers due to such interruptions because all providers will likely be having the same battles in the near future.

Dish Network president Charlie Ergan has indicated that he may be willing to go without Disney owned channels such as ESPN due to cost. Sure they would take a hit, but not all subscribers care about ESPN. I believe the contract is about to come due.

What happens if pay tv providers all start pulling back on what they agree to pay for ESPN, Big 10 Network, local channels, etc?
What happens if cable companies in NY and Maryland don't agree to pay more for Big 10 Network - oops.

If pay TV providers are serious, this could get interesting.

[TheSultan]

They have been having this debate on Scoop for the last few weeks. I don't pretend to know the answer, but Chicos (who works for a provider - Direct TV) believes that the content producers (such as ESPN) hold most of the cards. Yeah, I mean Dish could decide to dump ESPN and be a cheaper alternative, but many people *want* ESPN. And they have just lost a good chuck of people who want to pay a premium for it.

[Goose85]

They have been having this debate on Scoop for the last few weeks. I don't pretend to know the answer, but Chicos (who works for a provider - Direct TV) believes that the content producers (such as ESPN) hold most of the cards. Yeah, I mean Dish could decide to dump ESPN and be a cheaper alternative, but many people *want* ESPN. And they have just lost a good chuck of people who want to pay a premium for it.

They do hold the cards, but what happens if ESPN doesn't get the increases they probably have built into the model that allows them to pay crazy money for bowl games and conference tv rights?

[IWB]

Sultan - As much as Chico drives people nuts, if he says stuff about DirectTV, ESPN & the 'product', his comments are probably spot on.

Goo - you are right about the Bowl money - it will dry up sooner than later, and who will it effect first? ESPN? Bowls? Teams?

I am trying to remember who told me this, I think it was an AD but I can't remember - "They are banking on these massive college football contracts, and these contracts will never go full term."

His reasoning was the world wide web. He said in the next few years the internet will be streamed to TV, so why buy cable, or satellite or any other product, when you will be able to stream the games to your 60 inch TV off of your wifi?

What will come first? The reshuffling of the conferences or the reshuffling of how games are viewed? Whichever one happens first, it will likely be the cause of the other.

[The Reptile]

Good topic. Chico is right about one thing, ESPN does have the power in this situation. They own content and have it locked in for a long period of time - longer than the media realignment will probably take. Why? Anyone who owns an Apple TV has seen basic cable properties like ESPN and Disney make its way to Apple in addition to pay services like HBO. Currently, to activate these 'channels' a user has to list their cable provider and get an activation code online.

That's today. Tomorrow I can see these channels being sold by subscription by Apple. In that model, ESPN still owns the content, Apple will take their cut for collecting the money from their install base and the cable companies will be relegated to pipes.

And for anyone who is concerned with Chico and DirecTV, well they're likely part of Dish. Dish tried to buy Clear out from under Sprint for the towers and spectrum. Buying DirecTV would give them spectrum. They would still need towers but they would be one step closer to being able to offer a cell service, wireless digital broadband and more.