James Andrew Miller, co-author of the national #1 NYT bestseller Those Guys Have All the Fun, Inside the World of ESPN, wrote an interesting article suggesting that ESPN (DIS) could “abandon the NFL”, at the expiration of their existing 8-year $15.2 billion contract in 2021. Miller pointed to the lack of specific language in affiliate contracts requiring the network to carry NFL games, ESPN’s displeasure with the quality of game schedule, the disproportionate amount ESPN pays for rights when compared to the league’s other partners and the potential future interest from digital media companies, as reasons why the network may decide not to carry NFL games for the first time since 1987. Under the existing agreement, ESPN holds the rights to 17 Monday Night Football games and 1 Wild Card playoff game, per season.
Howie Long-Short: The basis for Miller’s article is that the combination of cord-cutting and burgeoning rights fees create a scenario where the network can no longer afford to carry NFL games. I’m not convinced. Sports leagues are going to look to maximize revenue in their next round of negotiations. I expect television broadcast rights to remain stagnant, perhaps to even slightly decline (makes sense as the audience continues to decline), which should enable ESPN stay in the game. The growth for the league will come on the streaming side, where Facebook (FB), Google (GOOGL), Amazon (AMZN) etc. can and will bid for rights.
Fan Marino: You don’t replace the NFL, as it gives the network 18 of its biggest draws of the year. On Sunday evening, for just the 2nd time since 2013, the World Series outdrew SNF head-to-head (12.8 to 9.4 overnight). The 9.4 SNF drew opposite the World Series rated higher than the highest rated college football game in Fox (FOXA) history (last Saturday’s Penn State/Ohio State game, 9.0) Ratings are down, but the NFL is still king; and you’re not the “worldwide leader in sports” without it. As for me personally, ESPN has my $7/month so long as they have the college football playoffs.
For the balance of today’s newsletter, sign-up here!
