Link: http://lostlettermen.com/will-fox-steal-big-10-from-espn/
Will FOX steal Big Ten from ESPN?
by Jim Weber, LostLettermen.com
Will FOX steal the Big Ten from ESPN?
That's the billions-dollar question in the college sports industry right now, as ESPN president John Skipper and 21st Century Fox founder Rupert Murdoch go head-to-head in a battle that could change the college sports media landscape forever.
Since launching FOX Sports 1 two summers ago, FOX has been waiting for its chance to put a huge monkey wrench in ESPN's world dominance of sports. This is that chance.
The Big Ten's 10-year, $1 billion contract with ESPN and six-year, $72 million deal with CBS for select basketball games and six-year, $145 million pact for the Big Ten Championship Game all expire after the 2016-17 season and a new, gargantuan deal will be struck within the next 12 months.
The only two legitimate TV players for the conference's Tier 1 football rights (best games) are Disney (ABC/ESPN) and FOX, as CBS already has the Tier 1 rights to the SEC and NBC is content airing Notre Dame home games.
The only thing we know for certain is that the Big Ten is about to get paid.
I honestly don't even know where to begin pegging the Big Ten's new Tier 1 deal, other than to say it will be way, way more than the $100 million per year it is getting now.
[ Note: The Big Ten's Tier 2 rights are not up for negotiation, as it has a 25-year, $2.8 billion deal with the Big Ten Network, 51% of which is owned by FOX.]
You can bet that shrewd Big Ten commissioner Jim Delany is going to want a deal that leaves the old one in the dust, as sports programming rights have skyrocketed in recent years because Americans seem to have an insatiable appetite for sports and advertisers have placed a huge emphasis on sports broadcasts since it's one of the few things people don't watch on TiVo or on demand anymore.
It only furthers Delany's position of strength that the Big Ten is undergoing a renaissance.
The conference lays claim to the reigning national champion in football (Ohio State), has another college football heavyweight in Michigan State, is the talk of the offseason with Jim Harbaugh's return to Michigan and also boasts traditional powers in Wisconsin, Nebraska and Penn State. Oh, and the conference just put not one, but two basketball programs in the 2015 Final Four.
Normally you would assume that ESPN would just spend whatever it took to keep the Big Ten in the fold to remain the "Home of College Football."
But it's not that simple.
All the TV rights that Disney has stockpiled over the years -- most notably "Monday Night Football" ($15.2 billion contract), the NBA ($24 billion, split with Turner starting after the 2016-17 season) and the College Football Playoff ($7.3 billion) -- starts to add up, even at ESPN.
And the new trend of Americans cutting the cord to cable is starting to be felt in Bristol, as The Worldwide Leader is tightening its purse strings after losing approximately three million subscribers in just over a year.
ESPN has made several recent cost-cutting moves, such as letting on-air talent like Bill Simmons and Colin Cowherd walk away from the network when the price tag for retaining them got too high (Keith Olbermann's departure was about more than money.)
So just how far over market value will The Worldwide Leader be willing to spend if re-upping with the Big Ten requires silly money?
On the one hand, ESPN doesn't want to spend beyond its means with subscription revenue falling. On the other, how much more dispensable would ESPN become to sports fans in general and college football fans specifically if it didn't have the Tier 1 rights to the two most powerful conferences in football, the Big Ten and the SEC?
If the Big Ten went to FOX, the only Power 5 conference that ESPN would have exclusive rights to -- on top of splitting the Tier 1 rights to the Big 12 and Pac-12 and Tier 2 rights for the SEC -- would be the ACC. A "Saturday Night Football" showdown at Duke's Wallace Wade Stadium doesn't scream "must-watch TV".
And in FOX, Delany has the perfect bargaining chip to drive the Big Ten's next TV rights deal through the roof.
That's because FOX is desperate for a seismic shift in the sports media landscape after the first two years of FOX Sports 1 has failed to threaten ESPN as it was intended to do.
This is no more apparent than FOX's college sports coverage.
FOX's college football pregame show's attempt to dethrone "College GameDay" has been an unmitigated disaster, Erin Andrews' splashy hire did nothing to boost ratings before she was reassigned to the NFL and the viewership for "Saturday Night Football" and ESPN games continues to dwarf FOX.
FOX has faced the same problem with its rights to Big East basketball, as the lowest-rated regular season Big Ten basketball game on ESPN last season still beat the highest-rated Big East basketball game on FOX.
But Big Ten football is a different animal than Big East basketball, as it has a much bigger and loyal following. It's also something even casual sports fans would go out of their way to find on the TV dial.
Of course, you can expect Disney to use FOX Sports 1's poor ratings to drive up the price tag even further on ESPN's challenger as a premium for taking a chance on the fledgling network.
The Big Ten could also split its Tier 1 rights between ESPN and FOX like the Big 12 and Pac-12, but I'm guessing FOX would much prefer to go all-in on the conference, as the Big 12 and Pac-12 rights have only made FOX a place you flip to for a particular game before you go back to ESPN.
Having the exclusive rights to the Big Ten's Tier 1 rights, the Big Ten Championship Game, and all other Big Ten games via the Big Ten Network would be the company's biggest move in sports since it upended NFL broadcasting by snagging the rights to the NFC from CBS in 1993.
If FOX were able to land the Big Ten's Tier 1 rights, it would surpass ESPN with the best total rights package in college football.
That is a doomsday scenario for The Worldwide Leader's college football coverage, and one you can bet that Rupert Murdoch is salivating over. The 84-year-old media mogul has made a legendary career out of taking huge business risks and throwing ungodly amounts of money at them, proving time and again that power matters to him even more than profits.
And after his recent $80 billion bid for 21st Century FOX to take over Time Warner failed, this would be a nice consolation prize for the media mogul.
The question now is, just how important is FOX Sports 1's success no matter the cost to Murdoch and his son, James (the company's new incoming CEO)?
If the answer is "very", ESPN's in big, big trouble.
Will FOX steal Big Ten from ESPN?
by Jim Weber, LostLettermen.com
Will FOX steal the Big Ten from ESPN?
That's the billions-dollar question in the college sports industry right now, as ESPN president John Skipper and 21st Century Fox founder Rupert Murdoch go head-to-head in a battle that could change the college sports media landscape forever.
Since launching FOX Sports 1 two summers ago, FOX has been waiting for its chance to put a huge monkey wrench in ESPN's world dominance of sports. This is that chance.
The Big Ten's 10-year, $1 billion contract with ESPN and six-year, $72 million deal with CBS for select basketball games and six-year, $145 million pact for the Big Ten Championship Game all expire after the 2016-17 season and a new, gargantuan deal will be struck within the next 12 months.
The only two legitimate TV players for the conference's Tier 1 football rights (best games) are Disney (ABC/ESPN) and FOX, as CBS already has the Tier 1 rights to the SEC and NBC is content airing Notre Dame home games.
The only thing we know for certain is that the Big Ten is about to get paid.
I honestly don't even know where to begin pegging the Big Ten's new Tier 1 deal, other than to say it will be way, way more than the $100 million per year it is getting now.
[ Note: The Big Ten's Tier 2 rights are not up for negotiation, as it has a 25-year, $2.8 billion deal with the Big Ten Network, 51% of which is owned by FOX.]
You can bet that shrewd Big Ten commissioner Jim Delany is going to want a deal that leaves the old one in the dust, as sports programming rights have skyrocketed in recent years because Americans seem to have an insatiable appetite for sports and advertisers have placed a huge emphasis on sports broadcasts since it's one of the few things people don't watch on TiVo or on demand anymore.
It only furthers Delany's position of strength that the Big Ten is undergoing a renaissance.
The conference lays claim to the reigning national champion in football (Ohio State), has another college football heavyweight in Michigan State, is the talk of the offseason with Jim Harbaugh's return to Michigan and also boasts traditional powers in Wisconsin, Nebraska and Penn State. Oh, and the conference just put not one, but two basketball programs in the 2015 Final Four.
Normally you would assume that ESPN would just spend whatever it took to keep the Big Ten in the fold to remain the "Home of College Football."
But it's not that simple.
All the TV rights that Disney has stockpiled over the years -- most notably "Monday Night Football" ($15.2 billion contract), the NBA ($24 billion, split with Turner starting after the 2016-17 season) and the College Football Playoff ($7.3 billion) -- starts to add up, even at ESPN.
And the new trend of Americans cutting the cord to cable is starting to be felt in Bristol, as The Worldwide Leader is tightening its purse strings after losing approximately three million subscribers in just over a year.
ESPN has made several recent cost-cutting moves, such as letting on-air talent like Bill Simmons and Colin Cowherd walk away from the network when the price tag for retaining them got too high (Keith Olbermann's departure was about more than money.)
So just how far over market value will The Worldwide Leader be willing to spend if re-upping with the Big Ten requires silly money?
On the one hand, ESPN doesn't want to spend beyond its means with subscription revenue falling. On the other, how much more dispensable would ESPN become to sports fans in general and college football fans specifically if it didn't have the Tier 1 rights to the two most powerful conferences in football, the Big Ten and the SEC?
If the Big Ten went to FOX, the only Power 5 conference that ESPN would have exclusive rights to -- on top of splitting the Tier 1 rights to the Big 12 and Pac-12 and Tier 2 rights for the SEC -- would be the ACC. A "Saturday Night Football" showdown at Duke's Wallace Wade Stadium doesn't scream "must-watch TV".
And in FOX, Delany has the perfect bargaining chip to drive the Big Ten's next TV rights deal through the roof.
That's because FOX is desperate for a seismic shift in the sports media landscape after the first two years of FOX Sports 1 has failed to threaten ESPN as it was intended to do.
This is no more apparent than FOX's college sports coverage.
FOX's college football pregame show's attempt to dethrone "College GameDay" has been an unmitigated disaster, Erin Andrews' splashy hire did nothing to boost ratings before she was reassigned to the NFL and the viewership for "Saturday Night Football" and ESPN games continues to dwarf FOX.
FOX has faced the same problem with its rights to Big East basketball, as the lowest-rated regular season Big Ten basketball game on ESPN last season still beat the highest-rated Big East basketball game on FOX.
But Big Ten football is a different animal than Big East basketball, as it has a much bigger and loyal following. It's also something even casual sports fans would go out of their way to find on the TV dial.
Of course, you can expect Disney to use FOX Sports 1's poor ratings to drive up the price tag even further on ESPN's challenger as a premium for taking a chance on the fledgling network.
The Big Ten could also split its Tier 1 rights between ESPN and FOX like the Big 12 and Pac-12, but I'm guessing FOX would much prefer to go all-in on the conference, as the Big 12 and Pac-12 rights have only made FOX a place you flip to for a particular game before you go back to ESPN.
Having the exclusive rights to the Big Ten's Tier 1 rights, the Big Ten Championship Game, and all other Big Ten games via the Big Ten Network would be the company's biggest move in sports since it upended NFL broadcasting by snagging the rights to the NFC from CBS in 1993.
If FOX were able to land the Big Ten's Tier 1 rights, it would surpass ESPN with the best total rights package in college football.
That is a doomsday scenario for The Worldwide Leader's college football coverage, and one you can bet that Rupert Murdoch is salivating over. The 84-year-old media mogul has made a legendary career out of taking huge business risks and throwing ungodly amounts of money at them, proving time and again that power matters to him even more than profits.
And after his recent $80 billion bid for 21st Century FOX to take over Time Warner failed, this would be a nice consolation prize for the media mogul.
The question now is, just how important is FOX Sports 1's success no matter the cost to Murdoch and his son, James (the company's new incoming CEO)?
If the answer is "very", ESPN's in big, big trouble.
