Which leagues could be used to acquire the most big name content?
Putting aside for a moment the talk of a breakaway...
The thought occurred to me that Disney/ESPN could use the next few years to pivot their holdings. Obviously, the SEC will become a wholly owned product. That opens up certain opportunities. The ACC will be behind the 8-ball financially and that requires a certain response.
The future is not going to look particularly good for conference networks, regardless of the league. The standard cable bundle is weakening with every passing year. More and more content-based streaming services are being launched all the time. In fact, the most recent addition to that stockpile was HBO Max...a product of Warner Media which is basically the a combo of Warner Bros. and the newly acquired Turner properties. Comcast/NBC just launched their new service called Peacock and it's even available to Xfinity customers at no extra charge.
Point being this, the market is in significant flux. Sony/Playstation got out of the delivery game when they dropped Vue. AT&T keeps putting too many logs in the fire with their offerings, but maybe they'll settle on a few eventually(AT&T Now for cable replacement and HBO Max for content). There's talk of AT&T selling off DirecTV and Dish Network isn't doing great either as traditional satellite TV is losing steam.
The one thing that is progressing is the unification between internet delivery, cable delivery, and content streaming. All the serious players are kind of moving in that direction. So for the companies that are used to making money off of sports, they will inevitably put more stock into their online sports packages.
Disney will push ESPN+ eventually not just as a nice little addendum to your cable subscription, but as a destination for some of the prime games. In the end, I think several SEC games will end up on the platform. The Big 12 has already struck with a deal with them which has begun to make me think Disney/ESPN is looking longterm with that relationship.
While it costs more to produce live sports content, it's also extremely profitable. You can certainly make good money with scripted content, but the hits are fewer and far between. Most series or movies won't give you a blistering ROI.
In large part, sports broadcasts have been so important because they help buoy the cable subscription model. Therefore, there's a balance that must be struck between utilizing sports broadcasts for traditional cable channels and putting sports online because the latter will never garner the same audience. The added caveat is one has to intentionally purchase a streaming service whereas all the sports networks get a guaranteed revenue stream simply by being included in a cable package.
Now, I think this is in part why you've seen cable companies, who are usually the same entities delivering internet services, start offering broader streaming packages and online cable replacement services. The bundle is still very valuable for their business model even if they're willing to alter the delivery method a little bit.
Take a closer look at the cable companies that also have a division on the entertainment side:
Comcast - NBC Universal
AT&T - Warner Media(Warner Bros and Turner)
The major player here that has combined sports, movie and TV production, along with streaming is Disney. The only thing Disney lacks is a direct connection to internet and cable infrastructure. They attempted to get into that game with their 21st Century Fox purchase as the original deal would have had them owning a key portion of Sky...a large cable provider in Europe. My bet there is they wanted to get into the delivery game and that this move would have preceded a larger infrastructure expansion in the US market and probably others internationally. That didn't materialize for regulatory reasons, but my prediction is they will try again. This time, I think they'll make a play for a cable company domestically.
Who would they go after? Might be a combination of a few different companies so as to broaden their reach. AT&T and Comcast are the top 2 so I imagine whatever Disney went after would be in an effort to compete for marketshare. Hard to be specific here, but if I were them then I would seriously consider making a play for Verizon.
1) Their Fios cable system already has over 4 million subscribers which is not bad for a cable product that hasn't been on the market as long as most others.
2) Phones...it's one of the few serious players in that market with a large network across the country. What better way to ensure that Disney+, ESPN+, and Hulu are easily accessible to millions of people than getting those services directly into their hands through cellphones. This also has the added benefit of competing less directly with other internet providers. Disney will want their product streaming across all internet services so they don't really want to tick other companies off when unnecessary.
Outside of that, I could see Disney making a play for Charter because they have a large subscriber base. Altice USA would also be interesting just because they control so much of the New York market.
Anyway, I think you'll see Disney make a play for someone in the not too distant future with the goal being having greater control over the delivery of their product through the internet. This will also protect their investment in ESPN because they can guarantee more subscribers to the traditional cable bundle as well as supplement their Hulu Live subscriptions. In other words, Disney would want to capitalize on the online revolution, but they have an interest in protecting the traditional cable model as well.
So anyway...
I went on with that a little longer than I intended, but I did want to say that ESPN has some interesting opportunities in the next few years.
More or less, they outright own much of college sports and have exclusive contracts with some of the biggest names in that sphere of the sporting world. ESPN, to a large degree, was built on college sports and still uses that content to fill out a large portion of their daily schedule across multiple platforms...the latest of which is ESPN+.
The SEC will be the keystone of their college sports content for some time. I now believe the Big 12 will form another wing of that just based on the relationships they've established.
The ACC, by contrast, may be on the chopping block so that certain moves can be made...one of those being the enticing of the Big Ten to give over more of their content to ESPN.
The Big 12, PAC 12, and Big Ten contracts are all expiring around the same time. We've heard that before. The SEC is now wrapped up although the contracts may not be official in every sense and it remains to be seen whether the last few years will be bought from CBS.
With that said, the ACC is not in a position to negotiate much of anything. Their deal runs well into the 2030s. The ACC Network, and we don't know how much money they made this year, was a key cog in supplementing their otherwise woeful income. Long term, that product is simply not viable due to changing market demands which means ACC schools will be behind the 8-ball economically speaking. Most of them will be happy to move and pretty much do so wherever ESPN tells them.
By contrast, not only has the Big 12 formed a closer relationship with ESPN through their 3rd Tier deal and ESPN+ contract, the nexus of Texas and Oklahoma is incredibly strong. They don't really have to do anything that much of anyone tells them, especially Texas. You could probably talk them into doing certain things for more money, but the question becomes the price it takes.
So the thought occurred to me that content will become ever more important, but the thought also occurs that a network like ESPN won't have a great deal to gain by putting too many big dogs in one league. The ratings will be fantastic for that one league, but it will limit their market share in other respects. I think Texas and Oklahoma in the SEC would be of great benefit to all parties, but I think keeping the Big 12 intact will be of greater benefit to all parties. Here's how...
The PAC 12 may in fact be dying. Larry Scott's days are numbered either way, but they've made a series of missteps that makes them vulnerable. In part, their focus on non-revenue sports has left a gap in focus on the only sports that really buoy the value of a conference...football and to a lesser extent basketball. PAC 12 basketball has been woeful for years despite the fact they use to be among the better leagues and still contain some of the better brand names. The football product has been weak overall and the dynamics of the CFP have exacerbated that. Even if the CFP expanded to 6 or 8, it's not going to matter much for the PAC because they've been fairly non-competitive.
1) The vast majority of D1 athletes in the PAC 12 footprint reside in Southern California. The programs of USC and UCLA are not only weakened by the fact that everyone is raiding their backyard, the competition is diluted because everyone is raiding their backyard. In other words, none of the other programs can build a sufficient team on the national level simply by getting their share of LA-based players. There's a ton of quality kids down there, but not enough to make 12 separate programs of high quality. Something has to give.
2) The value of the PAC 12 is limited from a TV perspective. Most sports fans on the West Coast are interested in pro sports which reduces the value of the PAC 12 out of the gate. That not only hurts their ability to compete, but it makes it harder to market them back East. The product isn't top notch and the time zone differences just make everything worse. That's two fold because you have to start games on the West Coast extra late to get them into a reasonable time slot back East. In other words, no one is going to stop watching the prime games from the East simply to tune over to your run of the mill PAC match-up. That has the additional negative impact of reducing interest on the West Coast because their games begin and end later...not a great combo for fan bases that are less engaged anyway. Something has to give.
3) There are nonetheless some quality brands in the PAC 12 that are worth preserving because they'll attract a national audience. That is doubly true if you pit those brands against behemoths back in the Big 12. These games are more likely to attract ratings on a national scale because you're not only crossing regions, but you're capable of pitting big time programs against each other more frequently than either of these leagues could produce on their own.
So I think the Big 12 will be used to acquire certain schools from the PAC 12 if at all possible. I could see it working like this...
UCLA and USC don't need the PAC 12. They need each other to some degree, but their market is fantastic and their brands are still strong. They just need some fresh blood. Mainly, they need PAC 12 programs to stop raiding their backyard and they need the crucible of better competition.
Arizona and Arizona State are the prime programs in a growing state. They likely won't leave the CA based schools on their own, but I don't see why they wouldn't vacate the PAC 12 if a couple of CA schools are leaving first.
Utah and BYU are two peas in a pod. This is a state much like many back in the South and Midwest that is dedicated to college sports and teams that connect well with the community.
So here you have 6 quality programs that could undergird a new Big 12. You have several good basketball brands there as well.
In addition, I think you have a unique opportunity to snag Notre Dame. In this scenario, the ACC is breaking up which removes them from the equation. The Big Ten is not terribly appealing to the Irish while a league that stretches across multiple regions and includes a traditional rival in USC should be pretty appealing if they have to join someone in full. This is the play that gets Notre Dame to go all in for ESPN.
Now back to the East...
The Big Ten needs some additional content in order to be lured into providing more of their product to ESPN. The SEC, by contrast, doesn't need that as much as they need to secure their borders. A lot of what the SEC wants to accomplish in matching more quality brands against each other can be done by expanding out of the ACC. Instead of big dogs like Texas and Oklahoma though, they expand from the middle so to speak...something that has always served them well in maintaining a political and financial balance.
The ACC can be effectively divided by securing both sets of interests...
The SEC starts by taking West Virginia so that the Big 12 can adequately realign geographically. There's no chance WVU wants to play most of their road games in some combo of the Central, Mountain, and Pacific time zones. Moving WVU out is also what makes room for Notre Dame in the new Big 12.
In addition, the SEC takes Florida State, Georgia Tech, and Clemson. These are the 3 in-state rivals that will likely need political cover and will provide some good quality regional match-ups otherwise.
Virginia Tech, NC State, and Louisville are added as well. The SEC taps a couple of new states and gets another quality athletic department which also doubles as one of the in-state rivalries. Now it may be that Kentucky isn't terribly interested in adding Louisville, but I don't think they'll oppose it.
If you're keeping count then that's 7 schools. I'm not talking about going to 21. In this scenario, I think Missouri is going to move to the Big Ten. It's a better fit for them and it's a consolation for the Big Ten in that they've now missed out on Notre Dame.
The Big Ten adds North Carolina, Duke, Virginia, Pittsburgh, Missouri, and Colorado. They've now consolidated a larger region and brought on new markets in CO, NC, VA, and MO. They also cover a greater territory back East.
The only 4 ACC schools not accounted for are Wake Forest, who is probably dropping football at this point anyway; Boston College, Syracuse, and Miami. These schools will still probably compete in some sort of AAC or larger conglomerate. Perhaps the Big East becomes their home with independent football.
What happens to the remaining 6 in the PAC 12? I have no idea other than maybe they finagle a few smaller flagships and get back to 10. The league as a whole isn't going to be too popular either way.
The point here though is that the Big Ten is at 20. The SEC is at 20. The Big 12 is at 16. Virtually all the quality programs in the country are now contained within this 56 school/3 league nexus. ESPN isn't going to own absolutely all of it, but they'll have the strong majority of it. In other words, college sports is still very much a national game, but it's been consolidated in such a way to trim some fat while ensuring that each league is relevant. Mostly, each league is significantly influenced by ESPN and that's marketable for a company that needs large amounts of sports content for the majority of the year as well as lots of games for their ever more important investment in streaming.
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Which leagues could be used to acquire the most big name content?
