With Fox reaching an extension with the Big Ten, what happens now for ESPN and other possible rights suitors?
Fox has renewed with the Big Ten while other media companies lineup to strike their own deal. What will shake out?
awfulannouncing.com
With FOX Reaching An Extension with the Big Ten, What Happens Now for ESPN and Other Possible Suitors?
by Ben Koo, AwfulAnnouncing.com
Late on Friday night, Sports Business Journal's John Ourand dropped a bomb that largely because of the timing of the scoop, has mostly flown under the radar of fans and media nerds alike.
Ourand's article mostly focused on the odd setup of the Big Ten rights negotiation process. There, the conference has opted to not retain a media consultant to help with the process (common for conferences), and instead has had FOX executives Mark Silverman and Larry Jones help to evaluate potential broadcast partners. This odd setup was allegedly the same back when the conference last went through this process in 2016 and stems from Fox's majority stake in the Big Ten Network.
Essentially, since FOX owns the majority of BTN, and BTN actually owns all rights and then sells the more premium rights to other networks before keeping the lower tier rights for themselves, the pair of Fox executives are serving as FOX's BTN representatives. It's complicated and weird, and I'm sure the non-Fox executives pitching the Big Ten hate it.
But the much more interesting nugget from the article was that FOX has actually reached an extension with the conference beyond their current contract (which expires after the 2022-23 sports season), albeit with details to be determined. Here's more on that from Ourand's piece:
The specifics of FOX's new deal are not set -- not even Big Ten or FOX executives know how many games that package will have as the conference still is trying to sell one, two or possibly three more packages to other suitors. The number of games going to Fox is dependent on how the conference structures these other packages. The conference expects to award these packages by Memorial Day.
FOX will have the main package and its deal will feature at least as many games as its current deal, probably more. Under its current agreement, FOX carries 27 Big Ten football games each season.
So far, traditional media companies CBS, ESPN and NBC have taken meetings with the Big Ten and FOX Sports.
To understand this deal and its to-be-determined details, you need to understand what happened the last time the Big Ten sold their tier one rights. That was back in 2016. Before that, those rights were previously all held by ESPN minus a small basketball package that CBS holds. In April of 2016, Ourand reported that Fox had reached a landmark deal, acquiring about half of the Big Ten's available media rights (again not counting the lower tier rights that BTN keeps). Take a look at the language from back then:
FOX is close to signing a deal that gives it half of the Big Ten's available media rights package, according to several sources. Deal terms still are flexible -- both in terms of money and rights. However, the two sides have agreed on basic terms that will give Fox the rights to around 25 football games and 50 basketball games that it will carry on both the broadcast channel and FS1 starting in the fall of 2017. The deal runs six years and could cost Fox as much as $250 million per year, depending on the amount of rights the Big Ten Conference puts in its second package.
The FOX deal essentially is half of the package of games that had been with ESPN (as part of a 10-year, $1 billion deal that expires next spring).
Two months later, it was reported that ESPN would retain the other half of the available Big Ten rights. FOX ended up paying $240 million a year for their half, which included the Big Ten Championship Game and the first regular season game selected every year, which they've used for Ohio State vs. Michigan in every year. ESPN ended up paying $190 million a year, with almost the entirety of that $50 million a year difference being the conference championship game and the OSU vs. Michigan game. One big takeaway from that round of negotiations was that Fox was no longer just dabbling in broadcasting college football, something that had ebbed and flowed in the decade before. Another was that the Big Ten didn't make this a long-term deal, instead choosing to get back in line to renegotiate their deals ahead of the Big 12 and Pac-12 (both have deals that expire later: the Pac-12's is up after the 2023-24 season, with the Big 12's up after the 2024-25 season).
Back to the present, Ourand's article from Friday also had an interesting note on how much of the Fox deal is still to be figured out, and the timing in which it might be figured out.
"The specifics of FOX's new deal are not set -- not even Big Ten or Fox executives know how many games that package will have as the conference still is trying to sell one, two or possibly three more packages to other suitors. The number of games going to FOX is dependent on how the conference structures these other packages. The conference expects to award these packages by Memorial Day."
So if you're following along closely, essentially we are in the exact same scenario as we were in 2016. FOX has secured their half of the deal first, and just like in 2016, may actually add even more to what they've already secured. Everyone else now has a handful of weeks to dazzle the Big Ten for all, or parts, of the remaining half. Unlike the Fox half, the Big Ten has decided to bring those rights to market, where any network can bid on them. And there's understandably a lot of interest. What's a bit more different this time around is that in 2016 it seemed inevitable that ESPN was going to grab that second half of the package, with Fox hovering ready to gobble it up like a significant other with a clean plate looking at the remaining food on your plate. ESPN didn't let it happen, obviously.
This time around, it's totally different, and part of that is about less households having cable and more households using streaming services. The likes of CBS, NBC, Turner, Amazon, Apple and obviously ESPN are all very much in play here this time around. And unlike 2016, we may see more than just Fox and another company get a piece of Big Ten rights. As noted in the above quote from Ourand's piece, it's possible even three other companies could end up with Big Ten packages.
Analysis: How likely that ESPN will also just follow FOX and renew their half of the package?
I think that's probably the most likely option. I would say there is probably a 80 percent chance ESPN continues to be a Big Ten partner no matter what. The question is, will anything get peeled off of their existing package, either for Fox or to make way for another partner or two?
ESPN rights kingpin, Burke Magnus, hinted at ESPN's strong interest in keeping the Big Ten a few months ago when discussing upcoming Big Ten rights on the Sports Media podcast with Richard Deitsch of The Athletic:
"We go way back with the Big Ten. 1996 was the first time we had a Big Ten game on ABC....we go all the way back to that time with the Big Ten and we've been through a ton together. We've been their exclusive rights holder. We've shared. We've lived through the advent of the Big Ten Network. Fox and ESPN and the Big Ten Network and ABC make an incredible combination right now, so we intend to pursue it aggressively.
"We love the Big Ten. It fits perfectly into our portfolio. I don't think I'm breaking any news here to suggest that it's really important to our overall college football and college sports business......It's just perfect for us and we hope very much to continue."
The reality is that ESPN needs the Big Ten and the Big Ten needs ESPN. There are just not that many conferences and networks that have this mutual needing of each other. Either side, in their gut, does not want to walk away if at all possible. That said, with ESPN adding the SEC game of the week from CBS, as well as Texas and Oklahoma further bolstering their SEC rights, there is a bit more of a logjam scheduling-wise. So you could perhaps see them be a bit more comfortable with a lesser piece of the pie here, especially as their NFL package doubled in size. They've also added other rights, including the NHL, and are eyeing extensions with the NBA and potentially a massive TV deal for a 12-team college football playoff. And they just spent $250 million to retain Woj and Schefter while adding Joe Buck and Troy Aikman (which, in Buck's case, actually required them to trade a Big Ten game to Fox).
It's possible ESPN might decide that keeping the majority of their existing package is good enough, thus allowing Fox or a new partner to come in to grab some of what they are willing to part with. With that in mind.....
How would Amazon or Apple get into the picture?
Thinking about this a bit more, I think Amazon and Apple are actually more viable as Big Ten media partners than CBS and NBC at this point. Here is my thinking.......
I don't think ESPN will renew and then just throw a bone to NBC or CBS, who they will compete with every Saturday. ESPN muscled CBS off the SEC. That was a huge win. Why let them back in the mix by leaving them something here? It's somewhat the same situation with NBC, who largely is out of the way on the college football front.
What I imagine Amazon and Apple would by far be the most interested in is a largely uncontested viewing window. And what sticks out there is Friday night, where the Big Ten has already been putting games as part of their last deal. Amazon and Apple know it's unlikely they'll draw casual fans to their games if they are competing with five to fifteen other games competing on easier-to-access networks and cable TV. It's just not as easy to get someone to change from cable, launch a streaming service, and find a game vs. just changing the channel between different games that are both on TV. But if Apple or Amazon had the only one game on at one time or maybe one of two or thee games on a Friday night, that's of way more value to them, as there is just less competition in that window. (We've seen this with MLB streaming deals with Apple and Peacock.)
While ESPN would probably also like the idea of having a ESPN+ game of the week on Friday or even just keeping a game on there on cable, I'm not sure they could pony up like these two tech giants can right now. We saw that recently with Thursday Night Football, which bounced around NFL Network, CBS, NBC and FOX before heading to Amazon. Amazon can just pay more, because Amazon Prime is growing and already has a much bigger subscriber base and other revenue streams, including linked ecommerce. A one-two punch in the fall of TNF and a Big Ten game of the week would really cement Amazon as the tech giant most serious about sports, which many in the industry have already crowned them as and are awaiting a few more deals before the coronation is final.
Meanwhile, Apple has been lurking and is beginning to make some moves like their recent MLB deal. They're also rumored to potentially be the new home of the NFL's Sunday Ticket. The acquisition of the Sunday Ticket and a Big Ten weekly game would very much put them as the Pepsi to Amazon's Coke, while the rest of the tech giants largely flail around as RC Cola contenders in terms of sports rights.
As I write this, I'm talking myself into thinking that FOX+ESPN+Amazon or Apple as the rights holders combination is probably on equal footing as the most likely scenario with just FOX+ESPN.
How would CBS, Turner or NBC get into the picture?
First off, I think Turner is really unlikely here. Ourand's article said they were the only one of the listed companies yet to pitch the Big Ten. It wouldn't surprise me if that meeting actually ended up never happening. That said, and to their credit, they did seemingly come out of nowhere to acquire NHL rights a year ago. Putting them aside.......
It's hard for me to see FOX, ESPN and either CBS or NBC all sharing Big Ten rights together. Perhaps I'm proven wrong here but I think the most likely way for CBS and/or NBC to enter the picture here is if the longshot scenario that the Big Ten and ESPN relationship dissolves, which again I think is pretty unlikely. I think it's much more likely ESPN parts ways with either the Pac-12 or the remnants of the Big 12, which has been largely gutted already. The Big Ten is just too big, and it's a critical part of their audience that they have a lot of history with to just suddenly have no relationship with at all.
But, if somehow ESPN is out of the picture, I think a) the Big Ten would feel a bit better about that outcome if another major network (or maybe even two more?) were now in the fold, b) FOX would likely need another partner to work with because of scheduling conflicts with other conference obligations and MLB playoffs. ESPN has ABC, ESPN2, ESPNU, ESPN+, ACC Network, SEC Network and obviously ESPN itself to move games around as needed. FOX only has FOX, FS1 and BTN. They don't have a streaming service for live sports (they don't intend to make Tubi that), and FS2 might as well be QVC when it comes to actually broadcasting football, which has led to overruns even going to Fox Business Network. They basically would need the shelf space of another network to absorb the entire package.
That's where CBS and NBC would jump to be involved. Both have little to almost no college football. Both would love to also non-exclusively stream these games to Peacock and Paramount+ if possible. Having some type of Big Ten deal would also set the framework for them to hover over upcoming Big 12 and Pac-12 renewals, in which FOX may find itself needing another partner similar to this hypothetical situation with the Big Ten. FOX also currently shares custody of those conferences' rights with ESPN.
It should be noted, though, that it is hard to see one of these two networks getting a big bite of the rights. NBC nixed their sports cable network (NBC Sports Network) and additional games beyond one a week on NBC would be put on USA, which doesn't seem ideal. CBS's sports network (CBS Sports Network - CBSSN) is also a pretty meager destination in terms of large sports rights, and I think the Big Ten would prefer to avoid that route as well. Both networks are likely looking for one game a week and with FOX already having secured a sizeable portion of the rights, I don't think we'd see anything bigger than that here. I view both as more or less the safety net just in case the Big Ten falls off the tightrope in trying to extend with ESPN.
What else?
A few quick thoughts:
- Obviously FOX getting their deal done means Big Noon Saturday will be around for the rest of the decade. The strategy that FOX loves, and that delivers big audience numbers for them, but fans and administrators absolutely detest, was largely dependent on having a relationship with the Big Ten. About 75% of the Big Noon games were Big Ten, and most of the rest involved Texas and Oklahoma, who are moving on from the Big 12 and will no longer be available to FOX.
So unless the Big Ten put in some language about limiting usage of various host schools participating in Big Noon, those games are definitely going to continue to roil fans for years to come. On another note, the extension also further cements FOX's Big Noon Kickoff pregame show as a continued contender for College Gameday.
- Something more interesting to me is if the Big Ten will continue to operate BTN+, their streaming service for the other lesser-watched sports like hockey, women's basketball, wrestling, softball, baseball, etc. They signed a partnership with Sportradar for that last fall. While this is more of an afterthought in these deals, I think ESPN, via ESPN+, and potentially Amazon Prime or Apple TV+ would have some interest in absorbing BTN+ into their services.
The Big Ten has seen increased ratings for wrestling, women's basketball, and hockey the past few years. There are subscribers to he bad like Minnesota for their hockey team or Iowa and Penn State for their wrestling team and a lot of other smaller pockets of fans out there who subscribe to the service. I think many fans would love BTN+ to be bundled/absorbed into an actual broader service like Amazon Prime or ESPN+, as opposed to being its own little service used a handful of times a year.
- The Big Ten has done a pretty masterful job of putting some early season games either in Week 0, Thursday nights, and Friday nights. This usually slows down as the year goes on. I think regardless of who wins what rights, you're likely going to continue to see more games moving to these types of windows. Particularly with the NFL's TNF moving off of network TV to streaming, there is going to be an appetite for having better college football games on television on Thursday nights. Additionally, I think tech companies will really be interested in Friday nights.
- There has been some smoke out there that FOX has increased their stake in BTN from 51% to a number higher than that. I'm obviously curious if that's true but also what that looks like. Would they just plunk down a huge amount of money and it's split between the schools? When and how would that actually be announced? Would FOX fully owning BTN be the endgame there, just like ESPN owns SECN and ACCN? If that's the case, it makes the Big 12's upcoming extension (they have no network) and the Pac-12's upcoming extension (their fully owned network can be mostly viewed as a failure) a bit more interesting if indeed FOX is seeing some value to be unlocked by owning more conference networks.
(Update: The FOX corporate annual report last year shows that the company's ownership in BTN has increased to 61%.)
So there you have it! Sports and capitalism, always a fun thing to discuss!
