DIRECTV unlikely to keep NFL Sunday Ticket

[Juan]

Well its almost fall

 

[Bruce]

Well its almost fall

It became Fall 5 days ago.

 

[SamCdbs]

A la carte isn't anti-consumer if you're not a big sports fan, like me. It's just shifting the cost of sports more squarely onto the folks who actually watch it the most. Which is fair.

What you're failing to factor in is that the number of folks who choose to keep paying for the ever-increasing cost of cable TV, including ESPN, keeps falling. Disney isn't going to keep ESPN forever chained to a TV package that typically costs $70/mo or more as we approach the point in the next few years when 50% of US households don't subscribe to such a package. Would some of those households buy ESPN if they could get it for substantially less than the cost of a cable TV package? Sure, some would.

DTC ESPN won't need to cost 4-5 times as much as they charge cable operators. As the number of cable subs dwindles, we can surmise that a growing % of them are sports fans who actually care about ESPN. If half of them watch ESPN enough that they would pay for it alone once the cable bundle is gone, then a DTC ESPN would likely be priced at about 2 times what they charge cable operators for it. I think that amount is probably around $12-13/mo. So maybe the entirety of ESPN as a DTC product would cost $25/mo., with a discount for bundling it in with Disney+. Admittedly, $25/mo sounds like a lot. Which is why I think they might break ESPN up into two DTC products, maybe $15/mo each or $22.50 for both (i.e. second one half-off). Who knows.

Well twice the price of cable, assuming everything else is assuming a buy rate of 50%. Most people expect a buy rate of about 20% or less.

The math for charging that little for linear ESPN just doesn’t add up. It is a pathway to bankruptcy. ESPN would be paying more to rights than it takes in.

That is the point of the “well, someday they will just have to sell it to me, at a price I can afford” mentality. No. Disney is in business to make a profit, and the cable bundle system has been very good to them. Selling linear ESPN a la carte will require a fee of upwards of $50 to make money. Which is why a la carte is anti-consumer.

In the end, no, I don't think DTC ESPN will be as profitable overall as cable ESPN. But then cable ESPN is also becoming less and less profitable over time as more and more households, even those who are sports fans, leave cable TV behind. As regional sports networks become available DTC, and we see more major sports available on general DTC streamers like Peacock and Apple TV+, some portion of ESPN viewers will decide they can live without it if it means they can drop a $70-$100/mo cable TV package.

Sports on general streaming is another issue. Really a problem. Many people have no real interest in general streaming, but will, very soon, need multiple streamers to get all the sports.

Further, of course, the main reason people left linear TV was to avoid sports. Worked for a little while, kind of like open key C-band in the 70s and early 80s.

But the big issue is the commercial side. Asking a bar to pay for access to 1000s of hours of melodrama it has no desire to show just to get access to the game or race or match or whatever, is really a problem

If Disney had foresight, they shouldn't sold off ESPN a few years ago when it could've fetched a higher price

I sure you meant to say should and yes, that is in hindsight what they should have done.

We will learn a lot, IMHO, about Disney and ESPN when ESPN’s most toxic asset comes up for renewal. The NBA. Disney pays the NBA a grossly disproportionate payment considering what the actual ratings are.

 

[Bilbo1]

People want the sports... whether the sports become streamed or are on linear programming, the demand for sports will be there. I'm uncertain why you are so angry about streaming.

Sports have been on TV pretty much since TV was created… first broadcasts of the NFL and MLB were in 1939!

In a lot of ways, streaming opens up opportunities for niche sports, speaking of which…

Then why did you bring up cricket?

Kind of wandering into the weeds there.

Cricket is an interesting example. It’s not really unpopular… I saw there were something like 4 million fans if it in the US. Not sure how that converts to viewership…

The Twenty20 format has each team bowling up to 20 overs. That takes about the same amount of time as a current MLB baseball game. This past year in the US, minor league cricket was started in preparation for the start of Major League Cricket next year, and the cricket T20 World Cup will be played in North Carolina in 2024.

MLC investors are listed here: ACE announces full Founding Investor Group for MLC - Major League Cricket

Some pretty heavy hitters in the tech industry.

 

[Juan]

It became Fall 5 days ago.

Yet no announcement

 

[Yespage]

Sports have been on TV pretty much since TV was created… first broadcasts of the NFL and MLB were in 1939!

In a lot of ways, streaming opens up opportunities for niche sports, speaking of which…

Niche sports and non-niche sports.

The Twenty20 format has each team bowling up to 20 overs. That takes about the same amount of time as a current MLB baseball game.

Yeah, T20 is kind of the black sheep of cricket (assuming T10 is never raised in civil company). It is MLB equivalent though, timewise. Kind of why it has grown because it is TV friendly compared to ODIs and the Test series setup. England has a 100 ball tournament now called "The Hundred"... get it? 100 balls instead of 120 balls in T20.

This past year in the US, minor league cricket was started in preparation for the start of Major League Cricket next year,

There is an effort to develop the sport in the US. Production quality for the games is understandably... quite awful. Covid-19 bumped its arse in the way of the debut of a Major League Cricket. The possibly interesting thing for the US is that Cricket is cheap, so top players can be had for relatively low amounts, so a CPL like tournament in the US is possible. The draws wouldn't be big though. But no where to go but up.

In other cricket news, the US just fell short of making this years T20 World Cup and are looking good to at least make it to the final qualifier for the ODI (T50) World Cup, where they will likely get dismantled by the second tier nations like Ireland and Netherlands.

and the cricket T20 World Cup will be played in North Carolina in 2024.

MLC investors are listed here: ACE announces full Founding Investor Group for MLC - Major League Cricket

I don't think venues have been selected yet for the World Cup. Though there aren't many ICC approved pitches.

But I digress. This is taking the thread off-topic and dangerously close to becoming constructive.

 

[NashGuy]

Well twice the price of cable, assuming everything else is assuming a buy rate of 50%. Most people expect a buy rate of about 20% or less.

The math for charging that little for linear ESPN just doesn’t add up. It is a pathway to bankruptcy. ESPN would be paying more to rights than it takes in.

That is the point of the “well, someday they will just have to sell it to me, at a price I can afford” mentality. No. Disney is in business to make a profit, and the cable bundle system has been very good to them. Selling linear ESPN a la carte will require a fee of upwards of $50 to make money. Which is why a la carte is anti-consumer.

Sports on general streaming is another issue. Really a problem. Many people have no real interest in general streaming, but will, very soon, need multiple streamers to get all the sports.

Further, of course, the main reason people left linear TV was to avoid sports. Worked for a little while, kind of like open key C-band in the 70s and early 80s.

But the big issue is the commercial side. Asking a bar to pay for access to 1000s of hours of melodrama it has no desire to show just to get access to the game or race or match or whatever, is really a problem

I sure you meant to say should and yes, that is in hindsight what they should have done.

We will learn a lot, IMHO, about Disney and ESPN when ESPN’s most toxic asset comes up for renewal. The NBA. Disney pays the NBA a grossly disproportionate payment considering what the actual ratings are.

LOL. Disney's CEO has repeatedly said that they're going to offer Disney DTC. And there's no way in hell they're going to charge $50 for it. And as for the $13/mo carriage rate I quoted, yes, that's in the ballpark based on various industry sources I've seen.

No, cord-cutters weren't looking to avoid sports, per se, we were looking to spend less money on TV while getting a better mix of content, all conveniently on-demand and with better picture quality to boot. It's unavoidable that some sports content will end up embedded in the big streaming services -- it already is, and that amount will grow. So folks subscribing to those services will have to pay for it. But most sports content will end up segregated off into dedicated sports streaming services from ESPN and the various teams/leagues/conferences themselves as the existing RSN model fades away. Each of the mainstream general entertainment services will have to be careful how much sports they take on, because those costs will obviously have to be passed on to consumers, some of whom will leave if the price goes up too much for sports that they don't watch.

 

[SamCdbs]

Glad I sold my Disney stock, that is a recipe for bankruptcy.

Anyway, SBJ is reporting that the NFL and A & A are still “very far apart” and the NFL is very disappointed with their bids.

The NFL, for once, may have read the market wrong. The willingness of A or A to lose this kind of money is apparently limited as the economy continues to sour.

 

[Juan]

Glad I sold my Disney stock, that is a recipe for bankruptcy.

Anyway, SBJ is reporting that the NFL and A & A are still “very far apart” and the NFL is very disappointed with their bids.

The NFL, for once, may have read the market wrong. The willingness of A or A to lose this kind of money is apparently limited as the economy continues to sour.

Enter ESPN

 

[Bruce]

Enter ESPN

I read that article that he posted about, all it said was Apple, had no mention of Amazon in the story, also said the NFL reached out to others, they assume the NFL is just trying to use them to drive the price up for Apple, so no interest in doing that.

 

[Juan]

I read that article that he posted about, all it said was Apple, had no mention of Amazon in the story, also said the NFL reached out to others, they assume the NFL is just trying to use them to drive the price up for Apple, so no interest in doing that.

Except they can't reach a deal

 

[cosmo_kramer]

Well its almost fall

This is a classic example of the amazing information and discussion that I come here for.

 

[Bruce]

Except they can't reach a deal

did not say that, it just said the NFL is trying to get more money, looks like Apple is ready to make the deal at the price they wish.

NFL needs to be careful, if they get more then the $1.5 billion it is a win, but in today’s economic times, if the NFL prices it too high, they will have no one to make a deal with.

The other problem is, the only companies with cash right now is Apple, Amazon and Google.

 

[Juan]

did not say that, it just said the NFL is trying to get more money, looks like Apple is ready to make the deal at the price they wish.

NFL needs to be careful, if they get more then the $1.5 billion it is a win, but in today’s economic times, if the NFL prices it too high, they will have no one to make a deal with.

The other problem is, the only companies with cash right now is Apple, Amazon and Google.

But the NFL ISN'T

 

[slice1900]

Except they can't reach a deal

We don't know that. They might have a deal but just aren't ready to announce it yet. Announcing a new deal for NFLST in the middle of this season might be counterproductive as it would confuse people who think they can get from it from Apple now.

The NFL really doesn't care when it is announced, but Apple might have some strategy about when they choose to do so. The only real constraint is that it needs to be announced a few months before the season starts so people can make plans (especially commercial accounts, who traditionally do early renewals for NFLST in May) but they could easily wait another six months if they wanted.

 

[Juan]

We don't know that. They might have a deal but just aren't ready to announce it yet. Announcing a new deal for NFLST in the middle of this season might be counterproductive as it would confuse people who think they can get from it from Apple now.

The NFL really doesn't care when it is announced, but Apple might have some strategy about when they choose to do so. The only real constraint is that it needs to be announced a few months before the season starts so people can make plans (especially commercial accounts, who traditionally do early renewals for NFLST in May) but they could easily wait another six months if they wanted.

Read Sam's update

 

[Bruce]

Read Sam's update

The article did not exactly say what Sam said, he is reading more into it like he did when he posted it looks like DirecTV would keep ST for Residential, based on the line in the story that DirecTV wanted to talk to the winner of the bidding.

This is what we know-

NFL Sunday Ticket deal still likely months away​

The NFL Sunday Ticket negotiations seem to be generating at least a story a week. My sources say any deal still is months away.

My pal Tripp Mickle wrote last week that the NFL’s “most extensive negotiations have been with Apple.” He also wrote that the NFL has "signaled its frustration with Apple by reaching out to representatives at other media companies to encourage them to put forward a bid. ... But some of those companies have been wary of becoming a tool that the NFL can use to induce a bigger offer from Apple.”

This is what Sam posted-

Anyway, SBJ is reporting that the NFL and A & A are still “very far apart” and the NFL is very disappointed with their bids.

Article says nothing about Amazon ( part of the A & A) or the bidding price, just that the NFL is frustrated, but that could be about anything, Commercials, length of the deal, etc.

It could be about money, since that is what other companies assume it is, or not.

The NFL, for once, may have read the market wrong. The willingness of A or A to lose this kind of money is apparently limited as the economy continues to sour.

Again, nothing was mention about Amazon, the NFL has been very upfront they rather Apple gets the deal because they want to spread the rights around.

We do not know if Apple is willing or unwilling to lose money on the deal, which is also not in that story.

SBJ Media: Amazon starts strong

www.sportsbusinessjournal.com

 

[cosmo_kramer]

“Sunday Ticket, I’m told not to expect anything until the end of the year, if not a little bit sooner than that,” Ourand said.

“Despite what many see as a delay from the originally projected timeline, Ourand did indicate that the long-time assumption that Apple would be the broadcaster to land the out-of-market package was still the most likely outcome.”

“Apple is the only one that’s had significant discussion so far with the NFL,” he said. “If Apple doesn’t get it, then maybe it’s NFL+? I don’t know.”

Report: Apple Still Seen as NFL Sunday Ticket Favorite, Decision Likely Coming Near End of Year

The NFL season is underway, with record-breaking audiences tuning in to the games, including on the new Prime Video Thursday night broadcast. Many NFL observers had expected a decision to be made on the future of NFL …

thestreamable.com

 

[Bruce]

Well twice the price of cable, assuming everything else is assuming a buy rate of 50%. Most people expect a buy rate of about 20% or less.

The math for charging that little for linear ESPN just doesn’t add up. It is a pathway to bankruptcy. ESPN would be paying more to rights than it takes in.

That is the point of the “well, someday they will just have to sell it to me, at a price I can afford” mentality. No. Disney is in business to make a profit, and the cable bundle system has been very good to them. Selling linear ESPN a la carte will require a fee of upwards of $50 to make money. Which is why a la carte is anti-consumer.

Found this from May-

ESPN’s Destiny As Streaming Stand-Alone Gets Nod From Disney CEO Bob Chapek: “It Will Be The Ultimate Fan Offering”

While the idea of ESPN going “over the top” as a stand-alone streaming offering has been bruited about for years, Disney CEO Bob Chapek enthused about the scenario Wednesday during the …

deadline.com

While the idea of ESPN going “over the top” as a stand-alone streaming offering has been bruited about for years, Disney CEO Bob Chapek enthused about the scenario Wednesday during the company’s quarterly earnings call, describing it as an inevitability.

“It will be the ultimate fan offering,” he said during the call with Wall Street analysts. “It will appeal to superfans that really love sports, and I think there’s nobody but ESPN who could frankly pull that off. We don’t have a lot of specifics when it comes to structure, but we do believe that because sports is so powerful — in fact, in the last quarter, 46 of the top 50 most-viewed programs on linear TV were sports.” Sports is also “the third leg of our domestic offerings,” he added. “Right now, that expression is through the bundle and I think that can become very powerful for us going forward into the future.”

Asked multiple times by analysts during the discussion of fiscal second-quarter results to outline how such a shift of ESPN’s focus might affect its financials, Chapek declined to offer preliminary analysis. Even so, he also expressed more distinctly upbeat sentiment than either he or predecessor Bob Iger have in recent years. Chapek used the phrase “when it comes time to actually pull the trigger” (as opposed to “if”), but also cautioned, “We’re not ready to share the specifics of our models in terms of how it would take for us to reach profitability on that or the impact it would have on our linear business.”

 

[Yespage]

The NFL wants a sure thing... so they want the money up front, regardless how many subscribe. Can't blame them. That'd make NFL+ a less likely outcome. With interest rates rising, debt is getting more expensive, so I think some of these deals are going to start contracting in growth. NFL got in at the wrong time. Had this been two years ago, probably better.

An announcement will be made at some point. And ST will exist somewhere, likely on the InnerTubes. And Directv will likely broadcast to the pubs and speak-easies.

And people shouldn't take any of it personally.