Collapse of Regional Sports Networks (Diamond Sports Group files bankruptcy, Warner-Discovery looking to leave business, Xfinity drops Bally)
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Yup gotten to the point where the normal signs of declining interest in a sport like fewer people attending games no longer matters. Whenever you see those empty seats galore Twitter post of barren MLB stadiums come late July early August there's usually some Sports Media person that chirps in sarcastically like I'm sure MLB or name the league isn't hurting their local media rights deal/revenue is huge.
It's like the rich person that gets into money problems you say WTH I don't get it. Well people spend up to their lifestyle. Leagues got more money so they spent more on players just cause there was more money. Then because of those expenses they needed ever increasing larger deals which they got. We are now hitting the ceiling. It's going to be painful there's no magic cure to be a revenue replacement. That gravy train has run dry.
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No but they're likely using it as a chance to take advantage of a upcoming market correction. Teams are overpaid on their deals. The fact they were able to get so much was off the backs of RSN fees on cable bills being collected by largely non sports viewers.
My fear is this happening on a National Level. I think (hope) the ESPNs/FOXs/Turners are better run and managed where they have the forethought to not get caught up like RSNs overpaying and not reading if the market could bear those cost.
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yup....although ESPN's rights fees have skyrocketed and Disney's new (old) CEO has stated that they will be looking at rights fees going forward (my guess is that they will prioritize and go with key sports, dropping others).
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KevFu
Registered User
That fear of the national level won't really affect the major pro leagues that much. The growth of TV deals will flatten, as networks prioritize. But ESPN et al will cut expenses elsewhere first, like college sports, which provides the very best example:
ESPN in the late 90s was paying contracts at various prices to all 30 conferences (it's "all sports" deals where football/basketball/everything else is bundled; football contracts are higher $$ than non-football conferences. There was a lot of balance to ESPN's programming spread around among the top 10 conferences in basketball and top 8 in football.
As the cost of TV rights went up (and conferences consolidated power), ESPN cut out middle-tier conferences. The Big Six Conferences still got paid more and more.
Atlantic 10 (7-10th best conference in hoops)
Missouri Valley (7-10th in hoops)
Mountain West (7-10th in hoops and 7-8 in football)
Conference USA (7-10th in hoops and 7-8 in football)
They were told to take a hike. Instead of giving those four like $200 million, ESPN gave contracts to:
WCC (11-12 best hoops)
MAC (12-15 best hoops; 9-10 best football)
Sun Belt (15-20 best hoops, 9-10 best football)
And it totaled like $60 million. The result was that A-10, MVC, MWC and C-USA sports fell off dramatically, and the WCC and Sun Belt got better. MAC stayed about the same.
So next time conference realignment happened, the Sun Belt raided C-USA!
This is why in the WNBA thread, I made the comment about investing in women's sports. The streaming services are getting women's sports rights for dirt-cheap prices and are going to promote them, because that's cheaper for them than the Big East or MLS.
Yeah I thinks that's what happened with MLS at ESPN somewhere along the line ESPN figured it's going to be cheaper to suddenly push the WNBA as a suddenly big thing than to pay MLS the money it deservedly had coming their way. They can pay WNBA on $25m yr deal $60m yr vs paying MLS on a then $90m yr $200m. ESPN is doing the same cost cutting with the PAC 12 and BIG 12 where they decided to go with one and trim the fat with the PAC 12. The gravy train is slowing down.
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Byrddog
Lifer
- Nov 23, 2007
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This is. It the first time espn has faced revenue issues with the NHL. And a argument can be made now that the stakes are higher. As ESPN has allocated much more air time for the NHL across the different stations they operate. Espns control of programming will have adverse reactions to the NHL as well. ESPN traditionally made its money through college sports, at far better outlays and grew there power by controlling the cost of carrying the college games. As there best egg built they started dipping there toe in pro sports some tears were very profitable some break even to loss. The NHL did not profit ESPN enough so the offer for coverage dropped to the point that hockey left ESPN . The league had to replace that revenue then while getting the programming out. Between fox sports and nhl center ice things were stable. ESPN’s return to hockey upset the apple cart, they focused on the larger markets to preserve there vestment. Bally has been a train wreck since day me. How Bettman did not see this mess coming is beyond me. Streaming had already effected the market and it was clear cable and satellite we going to fall. There death has been slow but streaming is still growing and has tipped the industry.
Djp
Registered User
womens sports tend to be a “ niche” market.
it would be interesting to see if a womens only sports network gets created streaming or otherwise
Byrddog
Lifer
- Nov 23, 2007
- 7,567
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NHL and MLS are niche as well. The NHL interest has been waining for some time. The NHL has attempted to keep pace with NFL, NBA and MLB but they are not able to compete. Someone earlier mentioned too big to fail in the sports market you have the top three and the rest fighting for scraps. The revenue produced from each of the top three individually dwarf the NHL. The top three will be the last ones dropped from programming due to there draw in ratings. The NHL is in real trouble, losing fans and now possibly TV broadcasting which will in turn cost the league more fans. It is a death spiral which may be terminal. Escalating ticket prices limiting butts in seats in most arenas and now looking at broadcasting issues the fan base will narrow. The league can not afford to self broadcast, now in some markets they could pull it off but who wants to see 8 team league. Each team has different deals where they are most do not own there own facility’s. A number of them own the rights to the venue and rely on additional shows to be booked to cash stream the team and all depend on radio and TV income. Income from hockey operations , just the game revenue only produce 50 to 70% of the money needed for hockey operations. It is a economic puzzle where all pieces have to work to keep the doors open. If any revenue stream fails the whole house crashes in. Hard to imagine that concessions and memorabilia can be increased more, same with ticket prices. It’s easy to drop $400 for a game for two people now. Disposable income just can not justify going to games 4 or 5 per month. In many cities going to a game is a treat that people can afford only because or twice a season. Big teams have fan bases that can pull that off but the NYR the Leafs, Oilers and a couple more are the only ones that night in night out can be comfortable.
So what is Bettman going to do? There’s no good answer. Being over optimistic in projecting revenue growth has not proven that his word can be trusted. The league has lost ability to control cost, uncontrollable inflation has hit the league shrinking sales n team sponsored products and concessions. Salary pressure has hit peak. No matter what $$$$$$ number we think a player is worth the market disagrees and so does the CAP. But GM’s continue to over spend. Look at all the teams near the top of the CAP and look at performance. It is not working, icing a competitive team now relies on having cheap ELC’s over performing then when it’s contract time for them it is difficult to pay them without moving another productive player or finding a Sap GM to take a bloated mistake contract the first GM mistakingly gave out.
The league is in a deep financial hole now on a number of fronts. How they get out of this and what is left will leave many fans out in the cold.
powerstuck
Nordiques Hopes Lies
Next NHL's TV contracts will be interesting. While there is a story about Bally in the USA, there's also a developping stoy in Canada with TVA Sports. Quebecor just cut 240 jobs (140 over it's TVA network) mainly due to poor financial performance by TVA Sports. That 1,5B deal TVA got thru Rogers is hurting them and many are speculating it's the beggining of the end for the network.
I remember hearing how Roger's was bleeding money on the Canadian Deal. Had no clue TVA was as well. So who gets the NHL Canadian deal in after 2025? How much will it be for are you saying you're thinking there might be a rights reduction? With half the US teams possibly having their local deals rights fee reduced under new bankruptcy court judgments having a reduction in rights in Canada would be a blow.
That scenario would sort of put us right back to square one. We got a extra $325 my yr in the US deal only to have Bally's sh!+ the bed and then having Canada National TV rights have issues.
Gary's gonna earn that pay check Jesus.
KevFu
Registered User
Right, but their media rights are dirt cheap.
College sports are a big business, but there's 32 conferences and ESPN has had contracts with every one. Ranging from a billion dollar SEC contract, to "Championship Games of MBB/WBB Only" for a couple hundred thousand dollars.
10-15 years ago, The Mountain West had the 6th biggest TV deal from ESPN and they were the 6th best in football (7th-9th best in basketball). They had teams in New Year's Six bowl games (TCU) and they were sending 2-4 teams to the NCAA Tournament every year.
At the end of their contract, they wanted a new TV deal "right behind conference #5 in football and #7 in basketball." If the Pac-12 was worth $200 million, they wanted $150 to $180m (I'm ballparking, can't remember exact numbers here).
ESPN's response? Offered like $32 million and said take it or leave it. MWC left it and got like $40 million with CBS Sports Network.
ESPN gave an increase in to the West Coast Conference (From like $2 million to $5 million) for a lot more late night basketball games (Filling the MWC timeslots) and expanded their deal with the Sun Belt Conference from like $3 million to like $12 million.
And what happened? The MWC got a lot worse in football and basketball; Gonzaga got even better, going from a ranked team to a Top 5 team. Other WCC went from garbage to "okay", and the Sun Belt got so much better, that they went from the worst football conference to leapfrogging two conferences, and actually raided another for members in the last round of realignment.
(And ESPN has done this before. They stiffed the Atlantic 10 decades ago, then Conference USA, then the Big East basketball conference when they stiffed the MWC. And now they're doing the same to the Pac-12 as we speak).
ESPN will pick a "Cheaper" property and pump it up using their networks and website as a hype machine, instead of paying a middle-tier property what it's worth.
So if you're the NHL, you worry about that relative to the other Big Four sports (and it already happened!)
But you don't worry about it overall happening to the NHL, because ESPN+ wanted the NHL's out of market rights for streaming to boost their subscribers. The NHL has national fan base in major markets. It's the college conferences who need to be scared.
Well said can use this analogy with WNBA to MLS. MLS was just lucky enough company like Apple saw the value and did a deal. It's shrewd business sorta dirty but if I'm a share holder I'm not not they are increasing my value while cutting cost. NHL only has to worry about the next deal as not to price themselves out. IIRC ESPN even gave MLB a rights reduction this rights cycle while reducing games.
You're spot on with ESPN that's their MO. If you're a mid tier property and your not the current pet project they most always seek to elevate the cheaper property. They've been actively doing this with WNBA since 2020 it's resulted in WNBA ratings on ESPN/ABC increasing from 205k to 349k last season.
You could do a report on ESPN social media engineering.
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KevFu
Registered User
I may be the poster you're referencing, and the "upside down pryamid of sports contracts" is a real thing that COULD affect the NHL as sports networks are willing to pay top dollar for the top properties and then fill out the rest of their programming with "bargain."
(It's a lot like the Salary Cap for NHL teams: If you're paying 2-3 superstars $8+ million each, you don't have 12 guys making $4-7 million each in your bottom nine forwards and bottom four D)
But I think we tend to be overly paranoid about the NHL's place because we're comparing it to "The Big Five Pro Sports" when the media rights aren't really just "the Big Five."
#1. - The major pro sports properties are actually divided up into multiple packages (NFC, AFC, SNF, MNF, TNF for example).
#2 - College sports isn't "Football or Basketball" It's the CFP, NCAA Tournament, and 32 different conferences.
#3 - Soccer is tons of different leagues: MLS, Premier League, Champions League, La Liga, FIFA World Cup (M and W, youth and club are bundled)
#4 - You also have more "events" properties like the Olympics, Triple Crown, NASCAR/Daytona, IndyCar/Indy500 etc.
#5 - And of course, those cheap women's sports properties.
So the NHL is A LOT higher on the pecking order than you think, because the NHL has teams in 23 US markets, all of which are Top 50 markets. Compare that to the American Athletic conference for football/basketball, and they have the equivalent of 7 NHL markets.
KevFu
Registered User
ESPN's role in college athletics is staggering. Rolling Stone did an article on it EIGHT YEARS AGO. The SEC is "the best conference" right now, because when the Big Ten started their own network, they picked Fox as their partner over ESPN... so ESPN went "all-in" on the SEC. Huge TV deal for a lot more SEC games.
That made all the talking-heads shows talk about the SEC more for cross promotion; and SportsCenter, GameDay, everything became an SEC-propaganda tilt:
The Big Ten didn't have "SEC speed," the Big 12 didn't play "SEC defense," and the ACC and Pac-12 favorites got upset because they weren't used to the absolutely gauntlet the SEC schedule put Alabama, LSU, Georgia and Florida through. But that was all a myth.
The SEC was really no different than anyone else. NFL combines tracked speed and the Big Ten prospects were just as fast as the SEC. The average Big 12 D and SEC were allowing the same PPG.
BUT, when #7 (USC or Oregon) with an 8-1 record gets upset by an unranked (Stanford/UCLA) with a 6-3 record, USC and Oregon plummet in the rankings to like #18 or #20... while #7 (LSU/Georgia) at 8-1 gets upset to 6-3 (Texas A&M/Florida), LSU falls to #10, and A&M/MSU skyrockets to #16.
Because ESPN cultivated a perception that the SEC was loaded and the other conferences were weak. (Meanwhile, UCF is undefeated and screwed out of the CFP for two SEC teams who lost to Auburn, whom UCF would then beat in their bowl game).
The SEC won their share of championships, but so did the Big 12, Big Ten and Pac-10/12. It wasn't until all the high school kids had spent years HEARING ESPN tell everyone the SEC was the best and therefore choosing to go to SEC schools that the SEC actually became the best in football.
ESPN's been doing it for decades. They've essentially turned college sports from 12 good conferences that were all fun as hell, to the power-consolidation hellscape of USC and UCLA joining the Big Ten and Texas/Oklahoma joining the SEC.
Massive re-alignment has really been in play since the collapse of the SWC with the 4 Texas teams going to the big 8 (UT, A&M, Tech and Baylor), and Arkansas going to the SEC. Then it really kicked off with the ACC poaching the Big East of Miami, Virginia Tech and BC. From there pretty much every 4 or 5 years we see massive movement, from the Big 12 almost collapsing over grips with Texas (A&M/Missouri leaving for the SEC, Colorado going to Pac-12 and Nebraska going to the Big East). This just seems to be the logical end of it with there eventually being 2 massive conferences. Pretty sure ESPN hated the death of the Big East since that was a premier college basketball tournament for it the time (when the ACC poached the Big East again in the 2010's to get two powerhouse basketball programs in Syracuse and Louisville).
I'm not sure how much of that is on ESPN or just television money in general, with all major networks contributing (ND can stay independent due to their NBC money).
NBC will also have a share of Big Ten rights starting this coming season. But why should NBC stop there? They could sub-license a package of Sun Belt games from ESPN for USA too, and get UMass home games on USA starting in 2025.
Byrddog
Lifer
- Nov 23, 2007
- 7,567
- 872
ESPN has brought sports a long way but i was there when they flipped the switch many years ago when we saw things like Japanese ping pong and professional bull riding. And while technically NHL is considered in your big 5 as a whole the viewership even big markets included is no where close football, basketball and baseball. Attendance has been all over the place since the 70’s and broadcasting changed. We had Saturday and Sunday football and baseball on the three big channels then Howard Cosell and Frank Gifford on Monday night football. Attendance was the hinge of sports salaries at the time. Only the very big names made over a million at the time. The impact of Espn started the absurd salaries we see today. The other sports networks really did not start impacting until the 90’s when more regionals came on Ted Turner proved it could work with his Braves coverage. For a Time the Braves had the most money than any pro sports team I did a graduate level paper on the subject for a sports literature class in 1988. Nonetheless the impact of broadcasting money drying up is a huge effect on the NHL. It is par for the course that Bally is failing where Fox had a pretty good handle on the coverage more stable anyway. Most team can not lose the broadcast money and the league relies on it to make a profit. We are going to see soon enough how the impact effects the league. Even if Bally has relief at 50% it is still going to cripple the Cap even further. IMO the league has too many teams it should be around 24 teams to level the talent out, where role players are not making more than a mil per. Where is the outrage for that? People bitch and moan about management in the labor market make 2 mil or more per year. A number that would insult most NHL players after their ELC. The pay scale in sports is going to change with streaming which by relies on fans subscription as has been pointed out with cable and satellite people who never watched programming still paid a portion of there bill to sports programming. For x ample I have not watched a MLB game since the strike in 1994 or a NBA game since the Celtics of the Mid 70’s but my cable money in part paid both leagues.
Streaming isolates coverage to those willing to pay for a sport. With NHL numbers stagnant or losing viewership hard to see any good things going forward right now. There is a reason there is so much advertising the purchase of sports packages over the last 10 years for sure every league fighting for $$$$$$$.
clevelandcane
Registered User
Not sure if this is the right thread for this but why isn't the NHL Network available in more streaming services? I think it's Hulu or Sling and fubo and that's it.
Major College sports realignment dates back to the 80’s when the schools and conferences wrestled away the tv rights from the NCAA in court. That led to the independents in the East scramble for conferences in order to get tv money (Penn St to B10, SC to SEC, and the formation of the Big East football conference). After the SWC broke up and the B12 and SEC started making bank on their championship games, that led to the next land grab. Specifically, the ACC and Big East because of their overlap basically splitting each others rights potential from each other (The two even shared bowl ties in the original BCS lineup).
While early expansion wasn’t driven by ESPN the mid-00’s to mid-10‘s expansion was to a great extent. I don’t think ESPN was saddened by the breakup of the Big East given they were the ones that enabled the ACC to drive a stake into the Big East’s heart. ESPN gave the ACC a big long term contract after VT, BC and Miami were poached. The Big East was in the middle of negotiations with ESPN when Pitt and Syracuse were poached. If you remember the renamed American Conference originally signed a deal with NBCSN that was matched by ESPN. The mouse via their long term deal with the ACC got everything they wanted from the Big East, which were the schools with the football programs. the rest of the Big East were super small catholic schools most of whom (exception Villanova and Georgetown) don’t have name value.
End of the day without NCAA Tournament rights college basketball regular season is just filler programming.
To Kevfu’s point the NHL will be fine overall. It provides and large inventory and brings a slightly difference audience. As we saw in the NBC days the league can be an anchor league for a broadcaster, where you can pair it with other sports to build a portfolio (like NBC did with EPL and Nascar).
Right now those who should worry are those in leagues/organizations that have same/similar sport programming than others but are further down the totem pole where broadcasters can turn to alternatives. That means secondary college leagues (like the PAC 12 right now), Indycar (in comparison to NASCAR), soccer leagues (where MLS struggled to find linear partner in compared to EPL, and La Liga and Bundesliga trail behind EPL in the US for cultural reasons, though obviously they have their home markets).
INDYCAR already is on NBC, for the foreseeable future though..... unless somebody outbids NBC for the Indy 500, like NBC did to ABC not long ago..... a new media motorsports deal for NASCAR Media Ventures is set to begin in 2025... will Fox and NBC retain those rights remains TBD.... BOTH have to rebid or does Disney return again through ABC/ESPN.... If u remember F1 is now essentially an NBC Property through their ownership of Sky, which had a bigger footprint in the final months of NBCSN as well as the EPL Contract
Indy car had a tough negotiations last time around where they basically ran out of bidders and had to go back to NBC to cut a deal that sacrificed some broadcast rights in order to keep large distribution to preserve sponsorships. On the other hand Nascar will probably see a healthy increase next tv contract as both Fox and NBC want to renew and they may be able to cut in a third partner.
(and I say this as someone who honestly prefers Indycar to both NASCAR and F1).
that remains to be seen as to what the 2025 motorsports contract rights will be.... but that has nothing to do w/ INDYCAR..... IT'S THE NASCAR specific contract that ends after 2024.... F1 is contracted through Sky FOR ESPN FOR US Broadcast rights.... as part of that same contract switch which gave NBC Sole rights TO Indycar outside of the streaming net that is Peacock....
Golden_Jet
Registered User
- Sep 21, 2005
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On the Bob McCowan podcast Friday, here is part of description.
We talk to Bill about the Bally Sports situation and get an idea on how the company's bankruptcy impacts the NHL. We find out what, if any, contingincy plans the NHL has put in place if Bally is unable to broadcast hockey games and find out how this all happened in the first place.
We talk to Bill about the Bally Sports situation and get an idea on how the company's bankruptcy impacts the NHL. We find out what, if any, contingincy plans the NHL has put in place if Bally is unable to broadcast hockey games and find out how this all happened in the first place.
