Imagine there’s no ESPN.
It’s easy if you try.
No broadcast partner intermediaries to charge us,
above us only direct access to sporting events live.
Imagine all the cord-cutters
living for today[, a day without ESPN].
Today, and for at least the past twenty years, it is difficult to imagine four letters more associated with sports in America than ESPN. Heck, as of 2006, there were at least four kids named ESPN, according to ESPN.com. The network invented the concept of a twenty-four-hour sports television channel at a time when ninety-three percent of the television audience restricted its viewing to ABC, CBS, and NBC, all of which still were signing off entirely each night. Part of the invention included SportsCenter, of course, but the network first established its national reputation when it broadcast the entire 1980 NCAA men’s basketball tournament.
While ESPN is thirty-six years old and living the starkly corporate lifestyle these days, its teenage years were wild, at least by broadcast television standards. In the 1990s, the network’s comparatively brash attitude provided it with a cultural identity that existed almost independent of sports. It may be difficult to remember this now, but it’s true: ESPN used to be cool. A selective timeline:
1992: Keith Olbermann joins SportsCenter to host “the big show” alongside Dan Patrick
1993: ESPN2 launches with Olbermann, Suzy Kolber, Stuart Scott, and, later, Jim Rome and Kenny Mayne, who would also work as a SportsCenter anchor; Craig Kilborn joins ESPN as a SportsCenter anchor; the modern era of College GameDay begins; ESPN.com launches
1994: ESPN Presents: Jock Rock Vol. 1 is released, beginning a series of Jock Rock and Jock Jams audio CD releases that featured popular sports-related pump-up songs interspersed with clips of SportsCenter personalities like Patrick and Chris Berman dishing out their catchphrases
1995: ESPN hosts the first X Games
1996: Rich Eisen joins ESPN to host SportsCenter with Scott
1998: The first ESPN Zone opens, in Baltimore’s Inner Harbor; Norm Macdonald hosts the ESPYs
2000: Page 2 launches on ESPN.com, an alternative site that would feature the bylines of Ralph Wiley, Hunter Thompson, Scoop Jackson, and, of course, Bill Simmons
2001: Pardon the Interruption debuts on ESPN
2003: ESPN debuts Playmakers, the network’s first original drama series, about a fictional professional football team
Playmakers was a blend of Friday Night Lights, Entourage, and Hard Knocks, and, aside from the Sunday night NFL game and Saturday afternoon college football games, it was the most-viewed program on ESPN. Despite its wild popularity, the show was on the air for less than three months. Under pressure from then-NFL Commissioner Paul Taglibue, ESPN first restricted promotion of the show and then cancelled it. The NFL didn’t care for the way Playmakers portrayed NFL players — too realistic, it seems — and wanted the show off the air. Mark Shapiro, then the executive vice president of ESPN, defended the network’s decision to adhere to the NFL’s wishes: ”It’s our opinion that we’re not in the business of antagonizing our partner . . . . To bring it back would be rubbing it in our partner’s face.”
Action speaks louder than words, and the cancellation of Playmakers signaled a turning point for ESPN, which began to purge itself of the people and programs that had built its unique identity in the decade from 1993 to 2003. From the viewers’ perspective, it became clear that ESPN was removing anybody whose name had become bigger than the network’s.
That represents an interesting notion of network cohesion, but there really is one explanation for the shift that ESPN executed in the period beginning with the cancellation of Playmakers and running through the termination of Simmons earlier this year: the prioritization of live-sports broadcast rights. Beginning with the 1980 NCAA tournament (and its early agreements with smaller conferences like the Big East), and running through whichever Monday Night Football or SEC volleyball game you just watched, ESPN’s core programming is live sporting events. The network’s adolescent dalliance with original content and individual personalities a thing of the past (what are they doing with Mayne these days?), that live-sports core is almost all ESPN is in late 2015, the remainder largely consisting of an internal #hottake-generating echo chamber.
Live sports is what national sports networks are supposed to be all about, though, right? So where’s the problem? Yes, ESPN has competition now, but FS1, CBSSN, and NBCSN aren’t serious threats to the Worldwide Leader, at least for the moment. Each rival network has tried different approaches, with Dan O’Toole and Jay Onrait’s Olbermann/Patrick Big Show sendup on FS1, and CBSSN and NBCSN attempting to steal ESPN on-air talent (only to see that talent eventually return to the Mothership). But the organizing principle remains unchanged: for a rival to mount a legitimate challenge to ESPN, the accepted view is that those other national sports networks need more live sporting events, and right now, nobody beats ESPN in that department. By both inventing the medium and controlling the market for so long, ESPN has been able to raise the barriers to entry by gobbling up live sports broadcasting rights, starving its competitors of the programming they need to draw eyes to their channels (or the TV Guide to even find their channels) in the first place.
ESPN spends a boatload to make sure its collection of channels remain the go-to destination for live sports events, which are among the most valuable properties in all of television. That’s long been true, but it’s even more true today with the proliferation of advertisement-avoiding DVR technology. In 2015, it’s not unreasonable to begin binge-watching the entirety of The Good Wife, a drama that debuted in 2009, but nobody’s going to start catching up on all of the Vanderbilt baseball games they saved from back in the spring, championship-caliber MLB feeder program that the Commodores are. People watch games live or not at all. That’s why ESPN has unloaded billions of dollars for the right to broadcast live sporting events on their channels. The estimated numbers from FY 2015 provide an illuminating snapshot:
League
Annual Rights Fee
National Football League
$1.9 billion
Major League Baseball
$700 million
National Basketball Association
$600 million
Major League Soccer
$45 million
Wimbledon
$40 million
U.S. Open (Tennis)
$23.3 million
The Masters (Golf)
$25 million
British Open (Golf)
$25 million
College Football Playoff
$610 million
NCAA Championships
$42 million
ACC Sports
$240 million
Big Ten Sports
$100 million
Big 12 Sports
$110 million
Pac-12 Sports
$110 million
SEC Sports
$227 million*
American Athletic Sports
$18 million
Mountain West Sports
$9 million
Little League World Series
$7.5 million
TOTAL
$4.831 billion
* – ESPN splits SEC Network profits with the conference. The SEC received $150 million from ESPN’s primary rights deal, plus approximately $77 million from SEC Network for the 2014-15 season.
By leveraging its capitalization to corner the market on live-sports broadcasting rights, ESPN has insulated itself against serious competition from FS1 and the other national sports networks, to which are left the scraps. Think bull riding, arena football, and auto racing series you’ve never heard of. (Long live SPEED!) In the course of ensuring a low ceiling for its rival national sports networks, however, ESPN has become exposed to competition from another quarter. Rather than worry about its would-be peers, ESPN’s biggest threat now may be its own broadcast partners.
As we have been noting in our regular news roundups here, ESPN has been losing subscribers as a result of cord-cutting, people ditching traditional cable and satellite television providers, and now we have a number: seven million subscribers lost in the past two years. According to parent company Disney, ESPN now is down to 92 million subscribers. Cord-cutting is an obvious problem for the network because of its cost relative to other channels on viewers’ cable and satellite bills. ESPN relies on cost-spreading– everybody with a cable or satellite subscription pays for ESPN regardless of whether they watch it– to make its price more palatable to its actual users, and it relies on its robust portfolio of live sporting events to make itself so in-demand that everyone continues to pay those costs. The other side of that coin, of course, is that ESPN needs all of those subscriber fees to be able to afford its obligations under its broadcast-rights agreements. So far, it’s a model that’s worked very well for ESPN. But what if they lost those broadcast rights that make them a must-have component of every cable and satellite subscription?
ESPN’s programming portfolio, and those of its fellow national sports networks, is increasingly one-dimensional. Is The Doug Gottlieb Show really appointment viewing? Is Scott Van Pelt’s “midnight” SportsCenter? (what time does it start, exactly?) Nah. We’re all tuning in to watch the games. And without the games, would the remnant husks of networks be able to survive?
Perhaps a better question: why are sports leagues still selling off their broadcast rights? The NFL, MLB, NBA, and NHL all have their own television channels. (Some collegiate athletic conferences also have networks, although these tend to be more akin to partnerships between the conferences and existing television networks like ESPN and Fox, rather than independent media entities.) They all have well-developed web platforms, and they all exercise control over the use and sharing of their content online, some more stringently than others. Yes, the NFL received a $1.9 billion check from ESPN last year for the right to broadcast Monday Night Football, but ESPN only cut that check because it knew that its broadcast of that event would allow it to make even more money. Why can’t the leagues eliminate these intermediary networks and realize an even greater portion of the value of their own broadcast rights?
This already is occurring to some extent. There are regular-season NFL games that appear only on NFL Network, and some MLB playoff games have appeared only on MLB Network. Cutting ESPN et al. out of the picture completely would require a not-insignificant capital investment, of course, to expand the leagues’ broadcast capabilities, but the issue merely is one of scale. It isn’t as difficult to create and operate MLB2 when MLB Network’s already up and running. The model exists and is replicable, as the national sports networks themselves have demonstrated. Most importantly, the leagues hold the most valuable asset in the equation. Their products essentially market themselves, and distribution follows demand, which, as everyone agrees, follows the games themselves.
That said, there are reasons why each of the leagues might hold differing views of such a large-scale shift. For example, while NFL football games may be sufficiently popular on a national level to justify a move to NFL Network-exclusive broadcasting, the NHL might find that its 1,230 games per season are only nationally marketable when bundled with other sports and therefore decide to remain with its regional sports network-based broadcast infrastructure. Still, even if leagues like the NHL and MLB, which have long seasons full of many games that draw only regional interest, wouldn’t be good fits to go 100% national, we still could see them bringing marquee matchups, Winter Classics, and All-Star and postseason games exclusively onto the leagues’ own channels.
Are these the End Times for ESPN? Unless the leagues suddenly and rapidly retrench onto their own platforms, probably not. And if the thought of Roger Goodell, Rob Manfred, Adam Silver, and Gary Bettman executing any changes in their respective leagues that might be described as “sudden” or “rapid” made you laugh, it’s probably because you know that these leagues are conservative institutions that change slowly, if at all. In the end, maybe what ESPN & co. offer the leagues is a product-delivery method that, while not necessarily superior to or more profitable on a transaction-by-transaction basis than a league-owned channel, insulates the risk-adverse leagues from the shifting vagaries of the market, politics, and public opinion, all of which affect the sensitivities of the advertisers and corporate and civic sponsors who ultimately fund the leagues. So viva ESPN, the Worldwide Leader in sports-media insurance coverage.