08-25-2023, 11:07 PM
(08-25-2023, 09:45 PM)Snorlax94 Wrote: I've been off Cardboard a while so apologies if this has been discussed
But I was thinking today about how absurd it is that teams are jumping conferences to get money from ESPN when I think it's highly likely that eventually Disney spins off ESPN and lets it go bankrupt or at least lets it renegotiate all its contracts (using the threat of bankruptcy).
Then it struck my how much ESPN benefits from the collapse of the PAC-12, and they, along with Fox Sports, would have had an incentive to collapse the Pac-12. Maybe everyone already knew this, but it didn't dawn on me until today.
Let's say every weekend each of the Power-5 conferences had a "game of the weekend" -- Ohio State-Michigan, Washington-Oregon, whatever. And ABC, Fox Sports, ESPN, and ESPN2 (and sometimes NBC) are bidding for games.
The competitive threat to Disney (ESPN, ESPN2, ABC) and Fox (Fox affiliates, Fox Sports) and Comcast (NBC) is that every day, more people cancel their cable subscriptions, fewer people watch broadcast (ABC, NBC, Fox), and more people sign up for streaming (Amazon Prime, Apple+, Netflix).
So every weekend there is this excess inventory of Power-5 games that these upcoming, wealthy tech streamers (Apple, Netflix, Amazon) can bid on and broadcast. What is the solution for ESPN & Fox? Collapse the most vulnerable Power-5 conference, which is also the conference that is not already locked up by ESPN & Fox. Now, there is less competition. This effectively locks up live college sports broadcasts - one of the largest strategic pieces of video content that is fundamentally different and complementary to non-live streamed shows and movies.
I know this sounds like a sales pitch, but Amazon, Netflix & Apple easily have enough $ to keep the competition between 5 power conferences alive. It would actually be worth it for the other streamers (potentially Netflix and Prime) to finance leftover games (the remaining Pac-12 "Networks" inventory) because 5 Power conferences keeps more inventory available for streamers, and it weakens the grip of the Disney/Fox duopoly.
I don't see this happening, but I think it is in Apple/Netflix/Amazon's strategic and financial best interest to finance a West Coast Power 5 conference. If one day, streaming doesn't achieve its potential and live sports is the key strategic content that helped Disney & Fox tip the scales against streaming, this is the moment the Apple+s of the world could have tipped the scales for a sum of money that is not even material to them.
Disney is looking at selling part of ESPN to help lift its financial burden. Currently, Amazon is the rumored partner. The idea is that the partner would help facilitate and finance the shift to streaming while the cash cow of linear TV is kept alive. If the ESPN partnership charges $25-$40 for streaming the linear live action content, it may end up with an equilibrium between linear and streaming. Streaming is now losing a bundle of money. ESPN is hoping to sell this as a way for it and its potential partner to optimize/maximize their returns, ie charge a lot to people who prefer cable and charge a lot to people who prefer streaming. The customer gets its choice, but either way they pay a lot more.