The Game to Show the Games

What does the future of broadcast television look like?

If there’s one tweet that sums up the conundrum broadcast television has found itself in for going on 15 years now, it’s this:


As I’ve been writing about for years, most notably in Chapter 7 of my book, this dynamic has led broadcasters to neglect their own nominal medium in the years since the dawn of the modern retransmission consent era – not merely to collect more money than they could get from advertising alone, but at least before cord-cutting caught on, as an existential lifeline allowing them to hope to compete with cable networks that could extract subscriber fees from cable operators without having their leverage undermined by the ability of people to watch their content for free. Even as cord-cutting has ramped up, the broadcast industry has remained sufficiently dependent on retransmission consent that they have not only done little to take advantage of the phenomenon, they’ve crippled any efforts to help them do so, from killing Aereo and Locast to at-best hesitantly embracing the stopgap technology allowing broadcast signals to be received by mobile devices directly.

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How Thursday Night Football on Amazon Might Be Putting the Final Nail in the Coffin of the Regional Sports Network Market

When word came out that Amazon had guaranteed advertisers 12.5 million viewers for its new Thursday Night Football package, most observers poo-pooed the notion that they would get anything close to that and figured Amazon would find themselves in a massive financial hole trying to make up for it with very limited commercial inventory with which to do so, especially any that would be of any use for reaching Americans. As much as leagues and media companies have been rushing to jump onboard the bandwagon of streaming sports events, whenever streaming numbers for events also airing on linear networks have been publicized they’ve been a small fraction of the linear audience, and even events airing exclusively on streaming have received audiences far smaller than what their leagues are used to. Back in 2020, when Amazon aired a Niners-Cardinals game on a December Saturday – the only previous time, to my immediate recollection, that the NFL had aired a non-London game exclusively on streaming – it attracted an audience of 4.8 million, hammocked by games exclusive to NFL Network that picked up audiences of 6.1 and 8.4 million. To be sure, becoming the consistent, weekly home to Thursday Night Football, including games involving popular, valuable, relevant teams, would help Amazon achieve better ratings, but at best they would be in the neighborhood of those NFLN-exclusive games on Saturdays and Thursdays, approaching but almost certainly not passing 9 million, let alone coming close to 12.5 million; even executives within the league itself suggested the expectation shouldn’t be more than 7 or 8 million. Outside of Amazon’s own offices, the question wasn’t whether Amazon’s sky-high guarantees would turn out to be folly if not outright scamming advertisers, it was by how much.

But whatever it was Amazon did or had on its side that no one else was taking into account, be it heavily advertising TNF on anything associated with them, having an established subscriber base, or just having viewership on mobile devices count towards their Nielsen-rated numbers when it counts for no one else, it paid off, in a way that, as Amazon executives would have you think, exceeded even their own expectations. When the numbers finally came in for Amazon’s season-opening game between the Chargers and Chiefs, it clocked in at a whopping 13 million viewers – a number that included viewing on local TV stations in the teams’ respective markets, but even for the most popular teams that shouldn’t ever exceed 1.5 million for any game. (The numbers have fallen below the initial advertiser guarantees in the subsequent weeks, but have remained above 11 million.) It was a jaw-dropping number that hit the sports media Twitterverse like an atom bomb – and could turn out to be a turning point for sports on TV more generally. 

Read moreHow Thursday Night Football on Amazon Might Be Putting the Final Nail in the Coffin of the Regional Sports Network Market

How the Rise of Superconferences is Killing the Soul of College Football

Thursday, June 30, 2022 may go down as the day college football as many fans knew it officially died, as that was the day the Big Ten stunned the college football world, as the addition of USC and UCLA to the conference went from being reported by various reporters, initially with the clarification that it wasn’t a done deal, to being officially announced in the space of a few hours. It’s easy to see the move as a desperation bid by the Big Ten in response to the SEC poaching Texas and Oklahoma a year earlier, which created the first sixteen-team “superconference” in college football, crippled the Big 12 and left them in a liminal state where they’re likely to be seen as only barely a power conference at best, and threatened to create a gap between the SEC and other conferences that might be insurmountable. None of the other schools in the Big 12 could bring nearly as much of a brand name or fanbase to any of the other conferences to even be worth splitting the pie more ways, let alone make up the gap to the SEC, and the Pac-12 and ACC seemed to be cohesive enough conferences, with strong relationships between their member institutions, as to be off-limits to be poached by the Big Ten or each other.

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Is MLS’ Deal with Apple TV the Future of Sports?

Three years ago, back in the Before Times, SportsBusiness Journal reported that Major League Soccer had opted to do something rather eyebrow-raising. MLS had told its existing and future teams not to sell local broadcast rights beyond 2022 when its national TV deals were set to expire, in hopes of maximizing the value the league could offer to potential media partners. With both national and local TV revenue falling short of other soccer or American professional sports leagues, this represented a big gamble to try and maximize the league’s media revenue going forward, but Awful Announcing observed that it carried a big risk of backfiring regardless of whether or not it was successful. It would almost assuredly only work if MLS reached a deal with a streaming service, at a time when tech companies had shown little serious interest in American sports and legacy media companies were only just starting to dip their toes in the water of streaming, and most companies would likely balk at taking on both national and local MLS rights; by not being able to sell local rights to the most valuable teams separately those teams’ rights would be undervalued, and with them, potentially local MLS rights as a whole; but on the flip side, if MLS didn’t sell local rights to anyone, all the teams would be stuck with what the state of the local rights market, and of local MLS TV ratings, would be in 2022, for better and worse.

In the end, though, MLS’ gamble paid off brilliantly – and in a way that could forge a path for other leagues going forward. Two weeks ago MLS announced a 10-year agreement with Apple unlike any other in American sports. While Apple is guaranteeing MLS $250 million a year, and will have the rights to show some games for free and on Apple TV+, the core of the deal is a partnership MLS and Apple are entering into to create a new streaming service, accessible through the Apple TV app, with rights to every single MLS game, across the country and around the world, whether in- or out-of-market. MLS will produce coverage of every game with commentary in English and Spanish (and French for Canadian teams) or from each team’s local radio broadcast. MLS still hopes to reach an agreement with a linear TV partner(s), but any such games would be simulcast with Apple, not exclusive, and in a “letter to fans” from Commissioner Don Garber, it’s indicated that any such agreement would only be for the “early years” of the partnership, meaning if streaming of live sports was sufficiently mainstream down the line, MLS could yet abandon linear TV entirely. 

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What Does the WarnerMedia-Discovery Merger Mean for Sports (At Least Stateside)?

Earlier this month AT&T announced it was ending its involvement in the media business after only three years from the closure of its merger with Time Warner. The assets now known as WarnerMedia would be merged with Discovery to form a new entity with no AT&T ownership and with Discovery head David Zaslav in charge of the merged company, which might sound an awful lot like Discovery buying WarnerMedia (and AT&T would get plenty of compensation in the form of cash and absorption of debt obligations, albeit amounting to pennies on the dollar from the original Time Warner acquisition), except AT&T shareholders would own nearly three-quarters of the new company. WarnerMedia’s diverse portfolio of adult and children’s entertainment networks, plus news networks and sports content, premium cable, and the HBO Max service launched under AT&T, would now be joining forces with Discovery’s documentary, reality, and other nonfiction programming.

A number of analysts in the aftermath suggested this would be a “game changer” for sports with “one more bidder entering the market” for sports rights, with one analyst claiming it would have “profound implications” as the new company could create a “must-have sports streaming service”, but considering that WarnerMedia already had high-profile sports rights and Discovery didn’t have any US sports rights whatsoever, nor does either company have a broadcast network presence, it’s hard to see how the new company is any more of a factor in sports rights negotiations than WarnerMedia already was. To be sure, before this year it had been a long time since Turner had been much of a factor in trying to acquire rights they didn’t already own and that were in any way competitive, the main exception being a run with the UEFA Champions League that only ended up lasting a year and a half and didn’t particularly impress soccer fans.

Then sports media watchers were blindsided when Turner came seemingly out of nowhere to take the half of the NHL package Disney hadn’t locked up, effectively saving the league from having to take significantly less money than they were hoping for after NBC was lukewarm at best to continuing their involvement, Fox set a ceiling on how much they would pay, and CBS wasn’t interested at all. The rights could be said to have fallen into Turner’s lap, but it’s still impressive that Turner was able to pay pretty close to what the NHL was looking for and beat out all other comers (including the possibility that Disney might have simply taken the whole package), and as incredible as it was that ESPN, the outfit more responsible than any other for keeping two Stanley Cup Final games on cable over the past two decades, would be the outfit to finally put every Final game on broadcast, it was even more incredible to find out that the other three Finals over the course of the deal would air entirely on cable, after the great care NBC took in the latter portion of their relationship to ensure NBCSN wouldn’t air a Game 4 where the Cup could be awarded. Zaslav’s comments that he’d been working on the merger for months before word got out (and had been badgering AT&T about a deal pretty much from the instant the Time Warner merger was completed) could serve as fuel for speculation that he was the driving force behind the NHL deal all along, and suggests that if the only impact a WarnerMedia-Discovery merger has on the former company’s sports operation is an infusion of resources (even though the merged company is probably smaller than AT&T as a whole during the WarnerMedia era), that’s still going to be enough to shake up the sports landscape.

But there aren’t a whole lot of high-value rights left. MLS rights, currently shared by ESPN and Fox, expire in 2022, but the value of those rights are a shadow of even the NHL. The NBA is the only one of the traditional four major sports that hasn’t locked up new rights deals in the past few months and Turner will be playing defense there when those rights come up by 2025. The NFL hasn’t settled the future of NFL Sunday Ticket, and SportsBusiness Daily’s John Ourand thinks DiscoverWarnerMedia might become a player there, but it feels like an odd fit without holding any exclusive or linear rights.

With ESPN picking up CBS’ SEC contract, there aren’t any major college conference rights up for renewal before 2024, when the Big Ten and Pac-12’s deals expire, with the Big 12 and Big East following suit the following year; the NCAA’s deal with ESPN for less-prominent sports expires then as well, and those deals could be an opportunity for DiscoverWarnerMedia to deepen their relationship with college sports and the NCAA (whose web site they already run) and avoid simply parachuting in for March Madness. But both ESPN and especially Fox are likely to spend profusely to defend their Big Ten rights, and the Pac-12 right now is in a place where they’re in danger of becoming the clear fifth conference of the Power 5, while the Big 12 has the least valuable demographics of the Power 5 and the Big East has no football and hasn’t moved the needle for FS1 as much as they thought it would. The College Football Playoff, whose current deals run through the 2025 season, is likely to come up at this point as well, but I doubt they have much interest in continuing to be a cable-only enterprise given their popularity and the direction media is headed, and they certainly won’t go with an outfit without any other college football rights (covers ears and sings loudly to drown out people bringing up the BCS on Fox). That’s not even getting into the notion of a large-scale shakeup of college football that might come mid-decade (one that, depending on the players involved, could yet see DiscoverWarnerMedia benefit).

NASCAR comes up for renewal in 2024 as well, but Turner seemed like an odd relic last time they had those rights with a handful of early-summer races, both they and ESPN pretty much didn’t want anything to do with the sport anymore by the time that deal ended, and NASCAR ratings didn’t finish crashing through the floor until a few years into the Fox/NBC era. On the other hand, the shutdown of NBCSN means NBC could be vulnerable to a concerted effort from a determined rival, which, given their portion of the schedule coincides with football season, would mean either Turner or ESPN. Everything else that could move the needle, including the World Cup, SEC, and ACC, are all locked up for the rest of the decade, and anything else that is coming up in that time isn’t likely to move the needle very much.

What Discovery does bring to the table that might make an impact on WarnerMedia’s sports operations is their Eurosport network, and a lot of the excitement surrounding the merger concerns the possibility of blending the Turner networks’ sports rights with Eurosport’s to form an unbeatable sports streaming service. But Eurosport’s slate of rights is singularly unimpressive, at least from an American standpoint, which might be surprising given its prominence; in fact Turner’s rights slate might benefit Eurosport more than the other way around. (Also, the opportunities for synergy are limited given Eurosport broadcasts in each of Europe’s many languages.) What rights Eurosport does have that would be relevant to Americans – the Olympics and PGA Tour – are among the rights already locked up stateside into the next decade (and Turner’s efforts to pick up PGA Tour rights were simply embarrassing, talking about converting one of their networks into a duplicate of what NBC already had), and everything else is a hodgepodge of rights.

It has plenty of soccer, but not much of it applies throughout its territory (in fact very little applies outside Scandinavia and Romania) and what does apply tends to be decidedly lower-tier; they technically have domestic rights to the German Bundesliga (extending to much of Central and Eastern Europe) but resold those rights (as well as those in Austria and Switzerland) to DAZN (which led to DAZN launching German linear channels only reluctantly and while griping about how they shouldn’t be necessary, once again overlooking the true value of linear television). Both outlets would likely be interested in acquiring Premier League rights for as many territories as possible, but that seems to be NBC’s top priority now that Sky Sports, the outlet arguably responsible for the Premier League’s very existence, is a corporate sibling. Eurosport also has rights to the three Grand Tours of bicycle racing, and the Tour de France might be up for the taking with NBCSN shutting down, but it’s not like being on TNT or TBS is actually any different than being on USA.

What stands out to me, looking at Eurosport’s slate of rights from the perspective of the Turner networks, is tennis. Eurosport has pan-European rights to the French and US Opens (excluding rights to the US Open in the UK and Ireland, where Amazon holds rights), to the Australian Open in the vast majority if not all of Europe, and Wimbledon in a majority of countries they serve. They also hold rights to the ATP Tour in France, Russia, Scandinavia, Romania, and Hungary, and the WTA Tour in Denmark and Russia. In the United States, rights to most events outside the Grand Slams are held exclusively by Tennis Channel, which just locked up a deal to become the exclusive home of ATP Tour events, including the most prominent events in North America, for an indeterminate amount of time, though the similar deal with the WTA expires after 2023. Tennis Channel is also the main rightsholder at the French Open, with ESPN holding rights to the other three Grand Slams, though I haven’t seen anything indicating that they’ve reached an agreement with the Australian Open extending past 2021. Their deal with Wimbledon runs through 2023, while the US Open deal runs through 2025; Tennis Channel’s deal with the French Open runs through 2023, with NBC’s deal ending the following year. DiscoverWarnerMedia could be a surprisingly motivated bidder for rights to each of the four Grand Slams, at minimum, over the next four years. Anything else would likely require a relationship with Tennis Channel, and Sinclair Broadcast Group likely doesn’t see a reason to part with it (and certainly not to have the whole company being acquired if it means they don’t get to spread conservative propaganda on their broadcast stations anymore, and DiscoverWarnerMedia likely doesn’t have much stomach for running broadcast stations anyway). Still, this might be the biggest immediate impact of the merger.

There’s one more wrinkle to consider here, albeit one that’s only incidentally related to the merger itself. Though AT&T’s regional sports networks were acquired through the purchase of DirecTV, after the Time Warner merger they were placed in the same part of WarnerMedia as Turner Sports in the News and Sports division under Jeff Zucker, actually separate from the rest of the TBS and TNT networks in the Studios and Networks division. I haven’t seen any mention of the RSNs in any discussions of the deal, and there were rumors for a while that not all of the WB Games division would make the transition to the new company so it’s not a sure thing the RSNs will, but I would normally assume the RSNs will in fact make the transition. Certainly the RSNs were long subject to rumors that AT&T was hoping to unload them in some way, arguably predating the AT&T-DirecTV merger but shifting into overdrive as the RSN market seemingly collapsed, with the prospect of a reunion with their former Fox Sports Net bretheren at Sinclair being particularly floated. With the NHL deal, though, WarnerMedia now has national rights to each of the three sports that make up the backbone of most RSNs, and while ideally you’d want a larger group than just four RSNs (not counting the separate feeds for Utah and Nevada) for this, there’s an opportunity to create some form of synergy between the RSNs and the national outlets, if Zaslav wants it. At the very least, if the RSNs aren’t part of AT&T anymore they’ll probably need a change of name.

In short, there are a lot of obstacles to a combined Discovery-WarnerMedia being a bigger player in sports rights than either company alone, not the least of them being that there isn’t a single package of rights held by both Turner and Eurosport as it stands, other than Russia-specific rights to the NHL, which means there’s not a lot it can do at the moment to create a streaming service that would be fundamentally the same on both sides of the Atlantic. The ability to offer international rights in Europe would certainly help in WarnerMedia’s negotiations with sports leagues, but the entities that would be most interested in that are either locked up for the next decade, already with Turner, or have limited appeal, and Eurosport has shown little interest in the European leagues and competitions that would be interested in a stateside presence, so it seems doubtful the American sports consumer would notice much of a difference. Tennis is probably the only sport where joining forces with Eurosport would pay dividends for the Turner networks in the short term, but even there the impact is likely to be limited. So while this merger is likely to have a significant impact on rights to American sports leagues in Europe, could impact stateside rights to tennis and cycling, and gives both entities an infusion of cash and the ability to bid for trans-Atlantic rights to fuel the pursuit of more sports rights, hyperbolic claims about its impact on the sports landscape are probably unwarranted in the short term; if anything, a good chunk of the impact may have already happened. Still, it’ll be worth keeping a close eye on NBA rights negotiations in the next few years if the deal gets approved; to the extent DiscoverWarnerMedia can launch a trans-Atlantic streaming service, NBA rights will probably have to be the linchpin for it.

A Blast from the Past that will Shape the Future: What Does the NHL’s Return to ESPN Mean for the Future of Live Sports Video?

In 2007, after ESPN had screwed over Fox (who had reportedly been thinking of putting the entire Stanley Cup Final on broadcast television) in taking control of the entire NHL broadcast contract and proceeded to barely promote it at all (especially after taking over the NBA contract a few years later) and bump it to ESPN2 if just about anything and everything could be put on ESPN ahead of it, most infamously poker, then turned down a $60 million option to extend the contract in the wake of the lockout leaving the league to turn with their tail between their legs to the outfit then known as the Outdoor Life Network, then made NHL highlights virtually persona non grata on SportsCenter to the consternation of hockey fans who felt ESPN, then at the seeming height of their monopolistic power, was sticking it to any league or entity that didn’t bother to sign a contract with them… if you told hockey fans that ESPN would end up being the entity responsible for putting every game of the Stanley Cup Final on American broadcast television, would they have believed you in a million years?

But indeed, that’s what will happen in four out of the seven years, including (presumably) next year, of ESPN’s new agreement with the NHL announced Wednesday, a deal that will reportedly pay the NHL $400 million a year, close to twice what NBC was paying for only half the national television contract. Perhaps no other recent sports rights deal better captures the shifts in the video (it seems gauche to call it “TV”) business in recent years, and it’s hard to think of one that will have more of an impact (the reported move of Thursday Night Football to largely being exclusive to Amazon feels like more of a paradigm shift but hasn’t been announced yet and may have less relevance to defining the role of linear television going forward). In something that would have been unthinkable, certainly for ESPN, maybe five years ago, this appears to be a deal largely about ABC and ESPN+, with linear ESPN largely an afterthought. 

Read moreA Blast from the Past that will Shape the Future: What Does the NHL’s Return to ESPN Mean for the Future of Live Sports Video?

Thoughts on @Ourand_SBJ’s Predictions for Sports Media in 2021

As we approach the end of the year we see the arrival of the season for reflecting on the past and predicting the future, and in the sports media business there’s always something going on that make the business of predictions exciting; whenever big rights deals come up for renewal the possibilities seem endless for what might happen, and as the legacy television industry struggles to come to terms with the advent of cord-cutting moves taken now will have ramifications for decades to come. John Ourand’s annual prediction column in the Sports Business Journal is generally good for a mix of bold predictions, assessment of the current landscape, and surprisingly odd analysis for someone so well-connected. I’ve dedicated entire tweet threads to his column in the past, but I haven’t entirely abandoned the notion raised way back when I started my Tweeter that anything that took up multiple tweets would go in a blog post instead, so here’s my take on Ourand’s predictions for 2021:

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Handicapping the Thursday Night Football race (again)

Last week, John Ourand reported in SportsBusiness Journal about the state of the NFL’s ongoing contract renegotiations with networks. The league had hoped to have new deals in place before the start of the upcoming season, but the coronavirus pandemic has placed that on hold; however, things seem to be shaping up to mostly continue the status quo. CBS wants to keep its Sunday afternoon package, NBC wants to keep Sunday Night Football, Fox wants to keep its own package and specifically stating it wants to “keep an NFC-focused package”, presumably in contrast to the idea the league has floated in the past of decoupling the Sunday afternoon packages from the conferences. Ourand described ESPN as the wild card, as they have long groused about paying nearly twice as much as the broadcast networks for games but getting a weak package; ESPN argues that retransmission consent has leveled the playing field between broadcast and cable, and if they’re going to spend so much money they should be getting better games, though in contrast to what was reported in 2017, ESPN seems to be focusing more on upgrading its current package than dropping out or even reducing the amount it pays relative to the other networks. As has been previously reported, ESPN also wants to return the NFL to ABC and rejoin the Super Bowl rotation.

However, Ourand also noted that Fox said little about Thursday Night Football and characterized that as the likeliest package to change hands, and that became the biggest headline in other places‘ reporting on Ourand’s article.

Read moreHandicapping the Thursday Night Football race (again)

Cable Companies are Disrupting the Cable Bundle – In a Way Their Streaming Counterparts Aren’t

A little over a year ago, Verizon did something that flew under the radar, and considering how much their deployment of Fios services has slowed, wasn’t really as important as it should have been. Following ESPN’s lawsuit over its “Custom TV” service, Verizon effectively defanged the service and switched to offering two base packages, one with sports channels and one without, to comply with contracts prohibiting the biggest sports channels from being on an add-on tier. A year later, however, Verizon went to a hybrid of the old and new Custom TV packages. Today’s Custom TV service consists of seven different base packages, only three of which (Sports and News, News and Variety, and Home and Family) contain ESPN and other sports networks. It’s not quite a la carte TV, and the Verizon site gives a list price for Custom TV of $64.99/mo, but that’s for bundles containing it; if you order the slowest Internet speed that can be bundled with Custom TV, the quoted price is exactly the same as the same speed without Custom TV. The fine print indicates that you would take on only $20.88 in set-top-box rental, broadcast, and RSN fees, on par with Sling TV, and presumably the non-sports packages without RSNs would cost nearly $6 less than that. That’s pushing less than half of what streaming cable services like YouTube TV and PlayStation Vue charge.

For that price, you could get most of the most popular cable networks other than sports, news, and Discovery networks on the Action and Entertainment package, or you could regain the mainstream news and Discovery networks while losing more reality-oriented channels on the Infotainment and Drama package. Both of those packages include Disney Channel and other channels owned by the four major companies with investments in sports, so you aren’t limited to channels from a small selection of companies. A truly comprehensive lineup would require upgrading to a more expensive package with sports networks, and some combinations of networks (like both Discovery and History) would require going that route, but Verizon seems to have largely recreated the comprehensive, watch-whatever-you-want feeling cable and satellite companies tried to create in the 80s, 90s, and early 2000s without the downward spiral that created.

What has attracted more attention is Charter’s soft-launch last week of Spectrum Choice, currently being offered only to 100,000 “hand-selected” customers, presumably primarily people who have threatened to cancel their existing Spectrum service and/or as a way to upsell current Internet-only customers. Programming appears to only be available by streaming to Roku or other connected devices (and thus, at least potentially subject to all the delays and problems of streaming), DVR service costs extra and is loaded with restrictions, and there is a confusing maze of restrictions to your ability to watch shows on other devices or outside the home. But once you get past all that, what it offers is remarkable: true a la carte TV. You get all the broadcast networks and Music Choice channels, and then you add any ten channels of your choice. Not all channels are available (and RSNs are among the channels that aren’t), but a sports fan could add ESPN, ESPN2, FS1, NBCSN, NFL Network, and all three channels showing March Madness, and still have two channels left over, having picked up every network showing the most popular national sports events.

But of course, what’s really attractive about this is the ability to stitch together groups of channels with no sports networks whatsoever. Nick Jr. is the most popular primetime network not to be offered, and Disney Junior is still available for families with young children. You could stitch together the most popular general entertainment or reality-oriented channels – USA, HGTV, TBS, TNT, Nickelodeon, Discovery, History, and maybe a handful of others to round it out. Perhaps more to the point, you could join Spectrum Choice with the Philo service, and then use your ten channels on channels not offered by Philo: USA, TBS, TNT, Hallmark, FX, Bravo, Cartoon Network, Freeform, Hallmark Movies and Mysteries, and Syfy, mixing up what channels you order based on what channels have the shows you want and maybe throwing in a news network or two if you want. You’d have access to an incredibly wide variety of entertainment – without any sports-specific networks.

The potential of this is such that to me, the biggest problem with Spectrum Choice is that there is no price feedback to your choices: you pay the same whether you include ESPN or not. This may explain why it costs $25/mo for the first two years and $30/mo thereafter, which makes combining it with Philo non-economical and arguably doesn’t even compete well with other streaming cable providers as is. It smacks of saying “we tried to offer an a la carte offering but no one took it”. Of course, if it did offer ESPN at a different price than other networks, that would smack of offering ESPN separately, as a premium service, which ESPN would probably never stand for, and the other restrictions and constraints might be necessary to appease programmers as well; Verizon may be closer to a more viable approach to shaking up the cable bundle (it’s worth noting that both Verizon’s Action & Entertainment and Lifestyle & Reality packages each contain all but one of the non-Philo networks I listed above, if you’re willing to go without major news networks). The fact that Spectrum Choice is so close to being a true game-changer, however, should not go unnoticed. They may be halting steps, but Charter and Verizon are moving closer and closer to allowing you to watch the programming you want without having to pay the sports tax.

For all the brouhaha over streaming TV services, for the most part they haven’t offered anything that truly sets them apart from the traditional cable bundle. In the name of trying to get enough programming people want to attract customers, they’ve almost all hitched their wagon to all of the Big Nine cable programmers, throwing away the one thing that could truly set them apart from the cable bundle. Even Sling, with a lower base price point and multiple smaller base packages, doesn’t offer a base package without sports networks. Philo has taken the best available approach to building a truly sports-free package and thus a package with the most potential to strike fear in the heart of ESPN. The question surrounding Philo has been whether it has enough valuable programming to attract customers without networks associated with the sports-heavy companies – without USA, TBS, TNT, FX, or Disney Channel. If the programming you want to watch is associated with those companies, you might be stuck paying the sports tax; if there aren’t enough people satisfied with what Philo offers, sports networks, especially ESPN and regional sports networks, will continue to rule the cable bundle for the foreseeable future, even as people increasingly chafe under their power. That is, assuming Disney’s pending acquisition of a large chunk of Fox, including its regional sports networks, doesn’t end up backfiring on them, as I suspect it might, by centralizing enough of the most expensive cable networks in one place that either cable operators or streaming providers decide it’s finally worth it to go without them.

But if the merger does go the way Disney thinks, then if the likes of Charter and Verizon continue to be allowed to be more flexible with their offerings – allowing people to get FX but not FS1 or Fox News, USA but not NBCSN or MSNBC, Disney Channel but not ESPN – that could finally break the stranglehold sports has on the cable bundle anyway. And in turn, that could ironically result in the collapse of the entire cable bundle if the most high-profile sports decide it’s not worth it to continue to hitch their wagon to the smaller audiences of cable networks and focus more attention on broadcast with a side of streaming, potentially starting a downward spiral of cable subscribers touched off by the departure of those that feel they need cable to watch the College Football Playoff, Final Four, or NBA playoffs, leaving the very cable networks that made it possible to either change their business models or die.

Could ESPN Kill Thursday Night Football?

In 1987, ESPN achieved something of a holy grail for the cable industry, picking up a half-season package of Sunday night NFL games, paid for with the imposition of a surcharge on the fees cable operators paid them. In 1998, ESPN picked up the full season of Sunday night games, paid for by the negotiation of clauses with distributors ramping up the fees paid to ESPN every year. This was the start of the process that resulted in ESPN charging every cable subscriber over $7 a month, far more than any other national cable network, and a key component in ESPN’s ability to acquire top-of-the-line sports rights such as the biggest college football bowl games.

In 2005, Disney was outmaneuvered in its efforts to renew both ESPN’s Sunday night package and ABC’s Monday night package, as the NFL struck a deal with NBC to move the league’s marquee primetime package to Sunday night in order to institute flexible scheduling that would ensure good, competitive games late into the season. Disney was left paying as much as it had for both of its previous packages for a single package for airing on ESPN. Ever since, ESPN has paid nearly twice as much as the broadcast networks for a package not much better, if at all, than the marginally-attractive matchups it had been getting on Sunday night. ESPN executives have chafed at this, claiming that for the amount it pays it should be getting matchups at least on par with the broadcast networks; to be sure, part of the fee pays for ESPN’s ability to use highlights across its myriad of programs, but that’s only a fraction of it, maybe no more than a fifth. But when the time came to renew the deal, after nearly a decade of knowing what Monday Night Football had become with the move to cable, ESPN ponied up nearly two billion dollars a year, once again close to double what each of the broadcast networks were paying. ESPN’s package of NFL games may be weak, but they’re a big part of what makes ESPN so valuable to cable operators, what makes it such a must-have for sports fans, and without it ESPN not only becomes a lot less valuable, but that same package of games becomes a tool an FS1 or NBCSN can use to instantly establish near-parity with ESPN.

At the same time it was shaking up its existing primetime packages in 2005, the NFL carved out a package of late-season Thursday night games to air on its own network, hoping to turn NFL Network into a cash cow that could collect hefty subscriber fees directly for the league. The package grew until it eventually took up the whole season, both to coerce holdouts to carry NFL Network and to establish the worth of a package to sell to other parties. Initially, the league was thought to be selling part of the Thursday night package to another cable outlet like FS1, NBCSN, or TNT, any of which would be salivating over the prospect of using NFL games to increase their own worth to cable operators, but instead it ultimately sold the right to simulcast and produce half a season of games to broadcast networks while also selling the right to stream games to Twitter and later Amazon. Sure, Thursday night games meant teams would be playing on a short week, increasing the risk of injury and potentially resulting in sloppy games, and the league’s policy of making each team play on a short week exactly once during the season limited the package’s ability to show marquee matchups. But Thursday night was a place to collect another pound of flesh from TV partners and air the games that made NFL Network worth paying for for cable operators, as well as a place to experiment with new formats and partners. It wasn’t like there were any other places for them to do this. Sundays and Mondays were taken.

Things have changed quite rapidly over the past few years. Cord-cutting has taken off like a rocket as people increasingly turn to on-demand streaming services for their entertainment, undercutting the primacy of linear television. In the short term, this only increases the value of live sports as one of the few types of programming people will willingly watch live, without skipping commercials, and are willing to pay for cable packages to watch, but it also changes the very nature of linear television, as it’s becoming increasingly apparent that anything your network airs that isn’t live events is just filler between live events (as much as ESPN and Fox sometimes don’t seem to recognize this). In that context, highlight rights are considerably less valuable than they used to be.

ESPN and the NFL are also looking at a future where the cable bundle collapses and the NFL can’t simply sell whatever it offers for a billion dollars to whatever cable network pays for it, which is no doubt part of the reason why it sold TNF to broadcast networks and streaming services rather than cable networks. In this context, ESPN’s future is no longer in collecting as much money as it can off the back of every cable subscriber, but in converting itself into a service offering its wares direct to the consumer, and it has less to worry about from FS1 and NBCSN – who have benefitted ESPN more by keeping the cable bundle propped up than hurt it in any way, and which now become more untenable propositions both in general and for the league specifically – than it does from Amazon and its ability to synergize sports rights with its Prime service. A package of mediocre NFL games may be valuable to cable operators that can pass on the cost to all their subscribers and that NFL fans can watch at anytime after paying for the entire cable bundle, but a subscription service offered directly to consumers can best attract subscribers by covering certain sports comprehensively, or else a broad array of important sports events that can combine to make it a must-have service for sports fans, and that single mediocre NFL game each week isn’t going to fit the bill and certainly isn’t going to be worth two billion dollars.

In that context, it’s easy to see why, as James Andrew Miller, the man who literally wrote the book on ESPN, suggested in a guest column for the Hollywood Reporter, ESPN might be thinking about going without NFL rights when they next come up for renewal, for the first time since 1987. ESPN has been removing clauses conditioning its high subscription fees on its continued carriage of NFL games from its contracts with cable operators, which makes sense when you consider the gap in fees between ESPN and NFL Network (and the fact that TNT charges more than NFLN without football or really much of anything other than NBA basketball and select NCAA Tournament games), and freeing up two billion dollars a year of spending money allows them to pay for events that offer a larger tonnage of content and may be more likely to entice more people to sign up for an ESPN subscription service.

Meanwhile, faced with a second year of headlines of declining NFL ratings, networks have begun complaining to the NFL about oversaturation of games and games being taken out of the Sunday afternoon packages. They want to move all London games back to 1 PM ET and end the “breakfast football” games that kick off at 9:30 AM ET. And they want the league to cut the Thursday night package back to eight games. That latter point would be difficult for the league to acquiesce to; all eight games would need to be exclusive to NFL Network to meet the network’s own contractural agreements with TV partners, preventing them from selling the games to another partner or a streaming service and once again forcing them to produce the games themselves, and potentially irking cable operators seeing NFLN’s tonnage being reduced to what it used to be when it was having trouble finding partners. And there’s nowhere else for it to go; again, Sundays and Mondays are all tied up. Or are they?

If ESPN decides NFL games are no longer vital to their business, if they decide to go without the NFL in the next TV contract, because of market forces that mean the NFL can’t prop up the cable bundle or any particular cable network anymore, that opens up a package of games that the NFL likely can’t sell to ESPN or any outlet looking to imitate it, but can use for whatever other purpose the league wants. They can put half the games on NFL Network, at least as long as it remains a tenable proposition within the cable bundle, and sell the remaining half to broadcast networks as they do with TNF now, or to a streaming service like Amazon, potentially selling the full season once the cable bundle completely collapses. Without ESPN preventing the NFL from doing whatever they want with MNF, the league could turn Mondays into the experimental night Thursdays are now, potentially doing away with Thursday games entirely except for opening night, Thanksgiving, and the week after Thanksgiving when both teams can be taken from the Thanksgiving games and play on a full week’s rest, curbing concerns about the league wearing players into the ground to collect a pound of flesh it’s becoming increasingly difficult to collect.

The competitive concerns motivating ESPN to keep paying up for MNF haven’t completely eased; ESPN wouldn’t want to walk away from the NFL only to pave the path for Amazon to become a competitor for sports rights. But I continue to believe that no entity that doesn’t at least control a linear television platform can truly be a player for major sports rights, and while Amazon has a lot more going for it than most Internet outlets, it’s not immune to those fundamental forces. At the very least, if ESPN continues to control a linear outlet it has a major asset to offer to sports entities, and if Amazon were to find its way onto one, and spend as prodigiously on sports rights as media companies have over the past decade, it would risk losing some of the advantages Prime has over cable networks if not recreate the worst excesses of the cable bundle. ESPN can handle creating a new competitor in Amazon while freeing up funds to maintain its supremacy in other ways, the NFL gets to continue raking in money from whatever revenue streams are available even if they aren’t as big, and players and fans could potentially find themselves in a world without Thursday Night Football and all the excesses and problems it represents and perpetuates. Everyone wins.