The Big Ten and the future of media for college sports

Over the last few years, millions of Americans have cut the cord and cancelled their cable, citing the exorbitant costs and the growing number of alternatives. Streaming services like Netflix and Hulu offer subscribers the same programs and movies as cable at a much lower cost. Until now, live sports programming has been a major reason to keep cable, but even diehard sports are starting to abandon cable.

The timing couldn’t be worse for the Big Ten, Big 12 and ACC which are all currently discussing media rights contracts. In a previous era, the major cable sports networks, like ESPN or Fox Sports 1, would be licking their chops at the opportunity to sign exclusive contracts with these conferences, but can those networks afford to shell out billions for an uncertain future?

ESPN is losing serious money

ESPN became the worldwide leader in sports by gobbling up the rights to college football and basketball games. Fans didn’t mind shelling out $6 a month, ESPN’s monthly cable cost, to see their alma mater or favorite team on the field on or hardwood. However, a new generation of fans, who grew up with on demand and a la carte streaming services, do not see the value and have cancelled cable at an alarming rate.

ESPN has lost seven million subscribers over the last two years. Using that $6 a month figure, ESPN’s financial losses are $42 million a month or $504 million a year. Since it’s safe to assume that ESPN will continue to hemorrhage customers and lose hundreds of millions of dollars, does it make sense for them to pay billions of dollars for television rights?

Even though it may not make sense, competition from other networks will likely push the price for television rights sky high and television is still big business – for now.

Will cable go the way of newspapers?

Technology has the potential to disrupt and even destroy industries. Not too long ago, everyone got their news from papers and print media was big business. Cable television could have a similar precipitous decline or it could adapt and change with the times.

The length, not the value of the Big Ten’s media rights contract may give a few hints about the future of cable television. If the contract is for only a few years, the writing is on the wall and the most lucrative days of cable networks are most likely over.

In the meantime, the major cable sports networks better be working on their own streaming applications or they run the risk of suffering the same fate as the newspaper conglomerates.


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