The Sports Bubble Is About to Pop

There is a major logical error in this post.<p>&quot;Sports&quot; is not about to pop. Anecdotally, I would assert sports (NFL, NBA, futbol&#x2F; soccer) seem to be growing more popular to every day people.<p>What is potentially about to pop is the &quot;entertainment&quot; apparatus around Sports. Ie ESPN&#x27;s programming the majority of hours per day that sporting contests are not airing.<p>It feels like ESPN is going the way of MTV. I doubt that music is less popular than it was in the 90s, but the one of its strongest previous consumption channels was disrupted by dozens of access&#x2F; consumption points - and simultaneously instead of dedicating themselves to airing music videos, MTV began to divert a lot of their airwaves (and I would assume resources) to reality TV and non-music video content.<p>ESPN (specifically) is in a similar position. On one hand, they appear to be working hard to offer streaming options - but they haven&#x27;t gone all in on any type of consumption based or bulk access (to my knowledge)...<p>Instead, they put &quot;characters&quot; like Mike&amp;Mike or Stephen A Smith to put on shows that are related to sports.<p>Unfortunately for ESPN there are too many content options (as well as competing sources for contract rights) for them to skate on thinly veiled sitcom characters and _very_ poor quality highlights in a world where we aren&#x27;t locked in to 1 or 3 &quot;channels&quot; to access what is happening in the Sports world.

<i>Don’t buy ESPN’s PR talk that its 7 million-household dip in subscribers is just a blip.</i><p><i>When ESPN was adding subscribers, the $6.50 per-month-per-subscriber it charges to every cable operator meant $78 of additional annual profit for each new subscriber.</i><p>7,000,000 * $78 = $546,000,000<p>Yeah, that&#x27;s definitely not a blip.<p>The reason this affects sports leagues is because a huge chunk of their revenue comes from TV.<p>ESPN pays the NFL nearly $2B per year[1] just for Monday Night Football - or roughly 16 games a year. That&#x27;s more than $100mm per game.<p>It&#x27;s becoming pretty clear that ESPN isn&#x27;t going to be able to afford TV rights deals like that for much longer. Which means the NFL is going to have to find someone else (there is no one else) or reduce its prices. When the sports league revenue drops, collective bargaining agreements will be disrupted and the result will be labor unrest and (potentially) team bankruptcy.<p>It&#x27;s going to be entertaining to watch the entire industry implode before our eyes. When it&#x27;s all over, we&#x27;ll be able to enjoy sports as they should be - any game, streaming for a reasonable price, no blackout dates or other restrictions.<p>It&#x27;s a shame an entire industry has to collapse to get a good user experience.<p>[1]<a href="http:&#x2F;&#x2F;www.nytimes.com&#x2F;2011&#x2F;09&#x2F;09&#x2F;sports&#x2F;football&#x2F;espn-extends-deal-with-nfl-for-15-billion.html" rel="nofollow">http:&#x2F;&#x2F;www.nytimes.com&#x2F;2011&#x2F;09&#x2F;09&#x2F;sports&#x2F;football&#x2F;espn-exten...</a>

This is why we can&#x27;t have nice things.<p>The argument for bundling is that it subsidizes production of the long tail of TV programming that would never exist if each production had to stand on its own feet.<p>But cable providers can&#x27;t be satisfied with the status quo. They want more and more money, so they are killing the golden goose. Americans were perfectly willing to pay $30-50 a month for cable. Industry greed has kicked that up to $70-80.<p>It boggles my mind how utterly stupid they were to, not just negligently let this happen, but to work as hard as they can to force consumers to look for cheaper alternatives.

This is interesting in light of another trend: Just recently the citizens of Hamburg rejected having the Olympics in the city in a referendum. And they weren&#x27;t the first, a number of cities have rejected major sports events when the people were asked.<p>What&#x27;s going on there is imho quite similar: By default it&#x27;s expected that the costs of major sports events are largely payed by the public. But a large part of the population has no interest in that and asks why they should pay to make people rich that they don&#x27;t care about.<p>It seems the sports complex is in large partsdepend ing on income payed by people that don&#x27;t care about it. It&#x27;s only good if that&#x27;s going to end. Sports events should be payed for by the people who like it, not by everyone else.

I cut the cord 5 years ago now. I haven&#x27;t looked back. Live sports is really the ONLY thing I miss, but you can go out to dinner at a bar a couple times a month for what cable was charging you.

Sports is the main reason I don&#x27;t have cable. Would I pay $20 for a few HGTV channels, and a few Discovery channels, and HBO? Sure. Would I pay $50 for the same + 20 sports channels? Nope, sports have 0 value to me.<p>Not a huge loss though, netflix helps make up for missing content.

The NBA just entered a massive television deal that kicks in next year. Since player&#x27;s salaries are tied to the amount of revenue the league makes, a lot of players stand to make upwards of 50% more than they make now. It&#x27;s a massive deal, so it&#x27;s hard to swallow any impending doom. I just think viewership will continue adjusting where they get their content from.<p>I haven&#x27;t seen anything about changes to streaming in the new deal other than the contract leaves the issue open for negotiating a joint-partnership that could supersede previous limitations, which included teams in your local market, nationally televised games, and the playoffs.<p>I absolutely love NBA basketball and although I don&#x27;t watch a ton of it, it probably makes up for 90% of my television watching while it&#x27;s in season. But I have to pay a cable bill upwards of $100 &#x2F; month to do so. I really hope professional sports follows the decoupling model and offers higher-value streaming options in the future.<p>The NFL&#x27;s online offering is equally restricting, but local NFL games are generally broadcast over-the-air, so you can pick them up with an antenna, making cord-cutting easier.

Doubtful. ESPN is not synonomous with Sports. People may be becoming aware of the amount of their cable bill being sent to ESPN, but there are two problems blocking change. 1) They (the cable subscriber) can&#x27;t do shit about it, they either accept the whole packege or not. 2) Why would the cable companies go for it anyway, I&#x27;m sure they know they can get more by forcing HGTV lovers to pay for ESPN, and ESPN lovers forced to pay for HGTV.<p>Also, let&#x27;s say this author is right, ESPN dies a slow death. How does that stop sports? ESPN doesn&#x27;t have much (of the main sports) on it anyway. Sports games are on other networks. NFL - CBS,FOX. MLB - FOX,TBS. Soccer - NBC. NHL - NBC.<p>I&#x27;m sure the sports that are on ESPN can find an home elsewhere. I&#x27;m not sure the dog shows are raking in huge TV money from ESPN that some PETS CHANNEL can&#x27;t cover.

I never have understood why we pay for cable channels to then watch ads on them. They should be able to make some decent money just on the ads.

A couple of things that are misleading here:<p>1) Most of the high profile ESPN personalities departing had little to do with finances. Some of it was internal feuding (ie, the Bill Simmons departure), some of it was firing loose cannons for boorish statements that don&#x27;t fly in our hyper-PC culture, and some of it was people leaving for more money from competitors. As others have noted, for a company the size of ESPN the salaries of a few high profile personalities are mostly negligible.<p>2) Same thing with the Grantland shutdown -- the site was never realistically expected to be a money maker, it was essentially shut down because the departure of Simmons made the site&#x27;s future unclear, and ESPN decided to get out of the pop culture business and fold the sports writing back into their main site.<p>3) A lot of ESPN&#x27;s cutbacks are because they (foolishly) forecast their finances on the assumption that subscriptions would continue to grow. That doesn&#x27;t mean the well has dried up, it just means that they&#x27;ve been a bit reckless the past few years.<p>4) I think this is excluding that a lot of sports are consumed on the free broadcast stations (CBS, NBC, FOX, etc.). Even with cable folding, those networks are still going to be paying billions for TV rights.<p>That said I agree with the overall gist of the argument that valuations are going to drop when the cable money starts drying out. I just don&#x27;t think it&#x27;s going to be a catastrophic crash or something; I doubt the average consumer will even notice.

In Other News<p>Discovery expects Eurosport app to reach one million subs in two years<p>Discovery Communications Chief Executive David Zaslav said he expects its Eurosport Group&#x27;s player app to reach one million subscribers in two years and that it will bring an additional $100 million in revenue.<p>&quot;It&#x27;s a big initiative,&quot; he said about the Eurosport app.<p>Discovery took a controlling ownership position in the European sports broadcaster last year. The app currently counts about 200,000 subscribers.<p><a href="http:&#x2F;&#x2F;www.reuters.com&#x2F;article&#x2F;us-discovery-eurosport-idUSKBN0MR27S20150331" rel="nofollow">http:&#x2F;&#x2F;www.reuters.com&#x2F;article&#x2F;us-discovery-eurosport-idUSKB...</a><p>Disclosure: I have been a subscriber since 2012, it costs about $5 a month. It is the only &quot;tv&quot; I watch. You get 2 regular sports channels. At the moment it is mostly Winter Sports: Alpine Skiing, Biathlon, Ski-jumping etc. With Snooker &amp; Tennis. Summer is two wheeled action: Tour de France, World Superbikes plus World Touring Cars, Tennis, and a whole host of sports you can&#x27;t get anywhere else.<p>We even had minority sports like American Monday Night Football ;)<p><a href="http:&#x2F;&#x2F;www.eurosportplayer.co.uk&#x2F;tvschedule-month.shtml" rel="nofollow">http:&#x2F;&#x2F;www.eurosportplayer.co.uk&#x2F;tvschedule-month.shtml</a>

Man, I feel bad for all the people subsidizing my college football addiction over the years. Well, athletic departments&#x27; addiction to $$$ that is. But I never had to worry about not seeing a game live from my very own couch. It was very easy for me to justify $70&#x2F;mo from September to January (until I found out I could get Sling for $25&#x2F;mo). I never asked for 40 bowl games though. Hopefully all of those no-name bowls disappear. College sports was still exciting before they came along.

The TV bubble has popped. For sports and all entertainment. But to use that evidence that all of &quot;sports&quot; is about to pop is a stretch.<p>I suspect we will see much more direct interaction with teams &amp; athletes, off-season live events, AR &amp; gaming tie-ins, etc. We will move from passive, centralized TV consumption to more distributed, interactive interaction.<p>Sports, as entertainment, is still very healthy, even if the mediums and peripherals are changing.

I also like the model of paying for the sports we want. I don&#x27;t mind paying $50 a year to watch all MLS games and I can watch them on any device.

One interesting comparison I didn&#x27;t see in there was tube porn sites.<p>You can get the highlights of pretty much any event with a simple search, so why pay to watch the whole thing? Sure, now and again a Champions League match could be good, but if people are like me, they&#x27;ll mostly just have a look at the highlights. And I&#x27;m guessing there&#x27;s a lot more marginal consumers than massive fans.

I&#x27;m interested to see if sports&#x27; cultural cache experiences more of a perceptible fall. For a long time, sports fandom provided a uniquely immersive experience - a world of interesting play styles, strategies, stats, and exciting shared experiences in the big games.<p>My sense is that the hardcore fans are still there, but a lot of casual followers are slowly being peeled away into other immersive experiences - well written TV, social media communities, deeper and deeper gameplay experiences. Additionally, gathering a bunch of people into a room to watch something isn&#x27;t as much of a draw with the constant connectivity of smartphones. My girlfriend is a<p>When you add the dinosaur economic model controlling the medium and the rising sensitivity to the brain damage that football causes, I wouldn&#x27;t be too surprised to see a more perceptible downturn.

&quot;When ESPN was adding subscribers, the $6.50 per-month-per-subscriber it charges to every cable operator meant $78 of additional annual profit for each new subscriber. This is a wonderful thing until a network starts losing customers, at which point all the revenue from every lost subscriber is chopped right out of that same network’s net profits.&quot;<p>This sounds like a &quot;collapse of complex societies&quot; in which the Roman Empire can expand as long as there are increasing returns to complexification, but collapses when the yields of complexification plateau and there is instead declining marginal productivity. <a href="http:&#x2F;&#x2F;www.historytoday.com&#x2F;christopher-chippindale&#x2F;collapse-complex-societies" rel="nofollow">http:&#x2F;&#x2F;www.historytoday.com&#x2F;christopher-chippindale&#x2F;collapse...</a>

Canada is switching to a la carte pricing for cable channels soon. Personally I&#x27;m planning on keeping a fair number of the sports channels and ditching a lot of the cruft that has built up over the years on the typical Canadian bundle.

Much of that article didn&#x27;t make sense, but there was a nugget of truth in there. Cable is losing subscribers, but that isn&#x27;t a unique problem to ESPN.<p>I don&#x27;t think the sportstainment industry will see a bursting of the bubble, so to speak. I do think instead, people who consume sports and sportstainment will simply pay more to make up for the suckers that were pitching in without ever realizing it.<p>There are sports fans out there that are cable-cutters, but not as many as you would think. Sooner or later, sooner if they have any sense, ESPN will move to the HBO Now type of model. That will bring many of them back.

Hopefully not too far off topic: I really enjoy live sports but find sports on TV to be fairly boring. I have had more fun watching local high school teams play that watching &#x27;big games&#x27; on TV.<p>And, I really resent the &#x27;ESPN tax&#x27; on cable bills, although now it is sometimes possible to unbundle that.

I left this page open overnight on thedailybest.com and woke up in morning with &quot;FirefoxPatch.exe&quot; attempting to download (clean install of W10). Will not visit this site again.

Here in the UK, sports channels are always an optional (and quite expensive) extra - it seems to work. Same with movie channels.

Here is my prediction for 2016 : the bubble of bubbles is about to pop !

Go Piggers!!!

This is the same publication that &quot;found&quot; bitcoin&#x27;s Satoshi a while ago. I&#x27;ll hold off believing this until some other news organizations start reporting this. Meanwhile I&#x27;ll be tuning in to watch the Golden State warriors tonight.

i might be a very odd ball, but i find it strange that in 21st century, people in the west pay relatively huge amounts for passively watching sports while sitting on the couch (to make picture complete, imagine some junk food lying just in front of them).<p>popular sports became filthy moral dump where elite tries to outsmart doctors in doping tests, cares primarily about PR and chasing sponsors, and the sport itself sits somewhere out there, like a necessary, but not that important part if it all. honest, pure sportsman doesn&#x27;t stand a chance in such a crowd.<p>I choose not to support these &quot;sports&quot; anyway, ignore them and couldn&#x27;t be happier. I focus on activities where athletes are doing it without massive cash incentives, because they love it.<p>And since my sports include climbing, alpinism, ski touring etc. which at any point hold small risk of major injury or death, fear is semi-constant part of whole experience and overcoming your fear is necessary for any success at all... these sports discussed look very &quot;meh&quot; compared to it.<p>Some real-people example - this Lebron James guy mentioned here today vs say Ueli Steck, or Alex Honnold.