Link: http://www.foxsports.com/college-fo...e/the-15-most-valuable-sports-networks-050715
The 15 Most Valuable Sports Networks
by Clay Travis, Outkick the Coverage (FoxSports.com)
Last week I wrote about ESPN suing Verizon. I'd encourage you to read that article if you're interested in the business side of the cable sports world. This week I'm writing what I plan to make an annual tradition here at Outkick, a breakdown of the 15 most valuable national sports networks. (There are regional sports networks as well, and some of them are quite valuable, but I'm focusing on the ones that you could all be theoretically receiving in your homes.)
Thanks to SNL Kagan for providing this data on monthly subscriber fees. I always reiterate this because I feel like lots of you still haven't realized it -- every channel on your cable bill has a monthly subscriber fee. ESPN is the most expensive subscriber fee at $6.61 a month. Every channel on your cable or satellite package costs something.
A couple of things that I want to hit before the numbers. I'll get emails about this so be leery of the difference between how many homes a network is "available in" and how many it is actually "in". PR departments love to promote the "available in" number. But that's a fictional construct. You make no money off the homes you're available in, you make it off the homes you're actually in. For instance, HBO is available in every home with cable. But it's only in roughly 36 million homes. HBO makes money off these 36 million, not the hundred million it's available in.
Also worth noting, these are just raw revenue numbers. So there have been no expenses removed here. Also, advertising revenue isn't included. That can be substantial. ESPN's advertising revenue, for instance, is typically around 25% of total subscriber revenue. Everyone else's advertising revenue would be much lower than that.
With that in mind here are the 15 most lucrative sports channels in the country:
The first number is the monthly subscriber fee, which you then multiply by 12 and then multiply that number by the number of homes that carry that channel.
1. This list doesn't include TBS or TNT, both of which have substantial sports offerings which serve to increase their subscriber fees
Here are their numbers: TNT (thanks to the NBA) is $1.65 a month, the second-most expensive cable channel. TBS is $0.85 a month, the eighth-most expensive channel.
2. Interesting comparison for those of you who are interested in over-the-top sports offerings
WWE Network has 1.3 million announced subscribers at $9.99 a month, which equals $156 million.
So in terms of revenue, the WWE Network is already bigger than the NHL Network.
(Full disclosure: I'm a WWE shareholder and fully believe that Disney, Fox, Turner, CBS or Comcast should buy the WWE and put its programming on their cable sports channels)
3. FS1 is for real
Yes, I'm employed by Fox and yes it has been trendy to take online shots at our network as it made its cable debut over the past 20 months, but FS1 is now the third largest cable sports network in the country and the seventh most lucrative station on cable. Right now the business side is ahead of the content side, but that's not a bad problem to have. It's certainly better than the reverse. Now we just need to build out our programming to surround the solid sports rights we already have.
In the meantime, I feel like everyone has forgotten how atrocious ESPN's programming was for the first several years it existed. Remember all those strongman competitions? The replayed football and basketball games a week after they aired the first time? Building a new network takes time. ESPN was ridiculed for years by ABC, NBC and CBS, now it's the most valuable media property in the United States. FS1's start has been infinitely better than ESPN's start, we just live in a microwave society. Everyone wants everything immediately.
4. The SEC Network is nearly worth the same amount as the NBA, NHL and MLB Networks combined.
Those three bring in $565 million a year, the SEC Network brings in $541 million.
The SEC dwarfs the Big Ten Network, producing nearly twice the subscriber revenue.
Most still haven't realized how successful the SEC Network is. Just wait until these revenue distributions start to roll out to the individual schools. The SEC Network is a total game changer. It went from not existing nine months ago to the fifth most valuable sports network in the country in less than a year.
5. NBC Sports Network has to be in line for a major increase in the near future.
I would think of a doubling of its monthly fee is definitely doable when the next round of carriage negotiations take place.
6. The Pac-12 Network is a cautionary tale
There just isn't enough demand among Pac-12 fans to create substantial revenue. The Pac-12 has trumpeted that it's "available in" 90 million homes. But the number who actually pay for it, per SNL Kagan numbers, is just 12.3 million. If those numbers are accurate, it helps to explain why the conference only paid out $1 million extra to each school for the network last year and projects to pay the same amount this year.
7. The ACC wants its own network
Does the ACC have more in common with the SEC of the Pac-12? It's probably somewhere in the middle, right? Football drove the SEC's network. Are there really enough ACC football games that will be in high demand? ESPN executed a masterful plan to launch the SEC Network, but the SEC's channel was paired with ESPN's rights extensions. The ACC Network would be a much, much more difficult battle and it wouldn't have the other ESPN channels to pair for negotiation purposes.
Other than the potential ACC Network, it's hard to see many more sports channels coming.
8. Is cord cutting or illegal streaming becoming an issue for these channels?
According to SNL Kagan ESPN's number of subscribers declined from 97 million homes last year to 94.5 million this year. I asked SNL Kagan why that might be and they replied as follows: "The cable operators have retention tools like low-priced packages without sports. They don't advertise them but they offer them to people who are disconnecting. We think this is causing a decline in ESPN subscribers."
The 15 Most Valuable Sports Networks
by Clay Travis, Outkick the Coverage (FoxSports.com)
Last week I wrote about ESPN suing Verizon. I'd encourage you to read that article if you're interested in the business side of the cable sports world. This week I'm writing what I plan to make an annual tradition here at Outkick, a breakdown of the 15 most valuable national sports networks. (There are regional sports networks as well, and some of them are quite valuable, but I'm focusing on the ones that you could all be theoretically receiving in your homes.)
Thanks to SNL Kagan for providing this data on monthly subscriber fees. I always reiterate this because I feel like lots of you still haven't realized it -- every channel on your cable bill has a monthly subscriber fee. ESPN is the most expensive subscriber fee at $6.61 a month. Every channel on your cable or satellite package costs something.
A couple of things that I want to hit before the numbers. I'll get emails about this so be leery of the difference between how many homes a network is "available in" and how many it is actually "in". PR departments love to promote the "available in" number. But that's a fictional construct. You make no money off the homes you're available in, you make it off the homes you're actually in. For instance, HBO is available in every home with cable. But it's only in roughly 36 million homes. HBO makes money off these 36 million, not the hundred million it's available in.
Also worth noting, these are just raw revenue numbers. So there have been no expenses removed here. Also, advertising revenue isn't included. That can be substantial. ESPN's advertising revenue, for instance, is typically around 25% of total subscriber revenue. Everyone else's advertising revenue would be much lower than that.
With that in mind here are the 15 most lucrative sports channels in the country:
The first number is the monthly subscriber fee, which you then multiply by 12 and then multiply that number by the number of homes that carry that channel.
- ESPN ($6.61 x 94.5 million homes) = $7.5 billion
- NFL Network ($1.31 x 73.6 million homes) = $1.16 billion
- Fox Sports 1 ($0.99 x 91.2 million homes) = $1.08 billion
- ESPN2 ($0.83 x 94.5 million homes) = $941.2 million
- SEC Network ($0.66 x 69.1 million homes) = $547.3 million
- Golf Channel ($0.35 x 79.4 million homes) = $332.2 million
- NBC Sports Network ($0.30 x 83.1 million homes) = $299 million
- Big Ten Network ($0.39 x 62 million homes) = $290.2 million
- MLB Network ($0.26 x 71.3 million homes) = $222.5 million
- Fox Sports 2 ($0.28 x 64 million homes) = $215 million
- NBA TV ($0.29 x 57.2 million homes) = $199 million
- ESPNU ($0.22 x 79.9 million homes) = $198 million
- CBS Sports Network ($0.26 x 61 million homes) = $190.3 million
- NHL Network ($0.32 x 37.4 million homes) = $143.6 million
- Pac-12 Network ($0.39 x 12.3 million homes) = $57.6 million
1. This list doesn't include TBS or TNT, both of which have substantial sports offerings which serve to increase their subscriber fees
Here are their numbers: TNT (thanks to the NBA) is $1.65 a month, the second-most expensive cable channel. TBS is $0.85 a month, the eighth-most expensive channel.
2. Interesting comparison for those of you who are interested in over-the-top sports offerings
WWE Network has 1.3 million announced subscribers at $9.99 a month, which equals $156 million.
So in terms of revenue, the WWE Network is already bigger than the NHL Network.
(Full disclosure: I'm a WWE shareholder and fully believe that Disney, Fox, Turner, CBS or Comcast should buy the WWE and put its programming on their cable sports channels)
3. FS1 is for real
Yes, I'm employed by Fox and yes it has been trendy to take online shots at our network as it made its cable debut over the past 20 months, but FS1 is now the third largest cable sports network in the country and the seventh most lucrative station on cable. Right now the business side is ahead of the content side, but that's not a bad problem to have. It's certainly better than the reverse. Now we just need to build out our programming to surround the solid sports rights we already have.
In the meantime, I feel like everyone has forgotten how atrocious ESPN's programming was for the first several years it existed. Remember all those strongman competitions? The replayed football and basketball games a week after they aired the first time? Building a new network takes time. ESPN was ridiculed for years by ABC, NBC and CBS, now it's the most valuable media property in the United States. FS1's start has been infinitely better than ESPN's start, we just live in a microwave society. Everyone wants everything immediately.
4. The SEC Network is nearly worth the same amount as the NBA, NHL and MLB Networks combined.
Those three bring in $565 million a year, the SEC Network brings in $541 million.
The SEC dwarfs the Big Ten Network, producing nearly twice the subscriber revenue.
Most still haven't realized how successful the SEC Network is. Just wait until these revenue distributions start to roll out to the individual schools. The SEC Network is a total game changer. It went from not existing nine months ago to the fifth most valuable sports network in the country in less than a year.
5. NBC Sports Network has to be in line for a major increase in the near future.
I would think of a doubling of its monthly fee is definitely doable when the next round of carriage negotiations take place.
6. The Pac-12 Network is a cautionary tale
There just isn't enough demand among Pac-12 fans to create substantial revenue. The Pac-12 has trumpeted that it's "available in" 90 million homes. But the number who actually pay for it, per SNL Kagan numbers, is just 12.3 million. If those numbers are accurate, it helps to explain why the conference only paid out $1 million extra to each school for the network last year and projects to pay the same amount this year.
7. The ACC wants its own network
Does the ACC have more in common with the SEC of the Pac-12? It's probably somewhere in the middle, right? Football drove the SEC's network. Are there really enough ACC football games that will be in high demand? ESPN executed a masterful plan to launch the SEC Network, but the SEC's channel was paired with ESPN's rights extensions. The ACC Network would be a much, much more difficult battle and it wouldn't have the other ESPN channels to pair for negotiation purposes.
Other than the potential ACC Network, it's hard to see many more sports channels coming.
8. Is cord cutting or illegal streaming becoming an issue for these channels?
According to SNL Kagan ESPN's number of subscribers declined from 97 million homes last year to 94.5 million this year. I asked SNL Kagan why that might be and they replied as follows: "The cable operators have retention tools like low-priced packages without sports. They don't advertise them but they offer them to people who are disconnecting. We think this is causing a decline in ESPN subscribers."
