Google Bidding for Sunday Ticket??

[ChicosBailBonds]

Hmmm

From today's Sports Business Daily


FUTURE OF SUNDAY TICKET UNKNOWN: The more pressing concern for Bornstein, who is leaving the NFL following the Super Bowl, is the Sunday Ticket out-of-market package. The NFL and DirecTV currently are negotiating to renew that deal, which expires after next season, and Bornstein said talks "are going well." "The timing of all this stuff is not anything I want to comment on because I honestly don't know," he said. NFL officials have spoken with alternate platforms, like Google, about the out-of-market package. But Bornstein dismissed the idea of a company like Google competing for existing rights. "To me, 'compete' is not the word; it's 'complement,'" he said. "We believe that the network package, along with the two cable packages that we have currently, along with what we do with our out-of-market package and how we¹ve developed the RedZone, is all complementary to the experience and rises all boats."

[ChicosBailBonds]

Yesterday's conference.....


"Brian Rolapp, COO of the NFL spoke about Sunday Ticket and was very quick to basically say at this time an OTT (Google, Netflix, etc) competitor for Sunday Ticket was not realistic.  He said its a combination of say Google not being in the subscription business and for the ones in it they are not in the live TV subscription business, so if 25M people watch a game on TV, no one can handle 25M concurrent streams.  "


Ding ding ding...we have a winner

[ChicosBailBonds]

Very interesting


http://www.reuters.com/article/2013/12/12/us-nfl-directv-idUSBRE9BB1CW20131212

[ChicosBailBonds]

http://www.cnbc.com/id/100977900

Very interesting

It's over.....for a long time

http://finance.yahoo.com/news/the-nfl-only-cares-about-money--green-bay-packer-josh-sitton-202227058.html?.tsrc=applewf

[Canned Goods n Ammo]

It's certainly a good deal for the NFL, but I wonder if this is the bloated contract that finally slows everything down.

Obviously directTV is betting that ratings are going to continue to be huge, and that football demand will help drive their business.

But, there is a saturation point with every product (Coke, Marlboro, Kraft Mac&Cheese, Budweiser, etc.) and there will be a regression at some point.

[ChicosBailBonds]

It's certainly a good deal for the NFL, but I wonder if this is the bloated contract that finally slows everything down.

Obviously directTV is betting that ratings are going to continue to be huge, and that football demand will help drive their business.

But, there is a saturation point with every product (Coke, Marlboro, Kraft Mac&Cheese, Budweiser, etc.) and there will be a regression at some point.

A lot of very smart people been working on this for a long time.  I think the market has reacted accordingly along with the analysts.  I was chuckling when the first stories coming out the way they did last year because it just wasn't going to go away any time soon.  Even though I'm on the digital side now, linear is going to be around a long long long time and will dominate on the dollar front for a long long long time. 

A regression at some point....in what sense?  Popularity...sure....but that doesn't mean revenues slow down, etc.   MLB isn't as popular as it once was, but the revenue growth has been very high.  It comes down to what the consumers of that specific product want to buy and what are they willing to pay for it. 

[Canned Goods n Ammo]

A lot of very smart people been working on this for a long time.  I think the market has reacted accordingly along with the analysts.  I was chuckling when the first stories coming out the way they did last year because it just wasn't going to go away any time soon.  Even though I'm on the digital side now, linear is going to be around a long long long time and will dominate on the dollar front for a long long long time. 

A regression at some point....in what sense?  Popularity...sure....but that doesn't mean revenues slow down, etc.   MLB isn't as popular as it once was, but the revenue growth has been very high.  It comes down to what the consumers of that specific product want to buy and what are they willing to pay for it. 

Well, put it this way: The market can't just grow indefinitely.

Networks cannot wait to get into bed with the NFL right? It's a can't lose proposition. They pay HUGE dollars for live NFL coverage, and the NFL delivers TONS of eyeballs and ad revenue.

At some point in the future, viewership is going to level off, or even decline. At that point, advertisers might put there money elsewhere, in which case the networks won't be able to generate enough ad revenue to justify the high cost of NFL programming.

I'm not saying it's going to happen overnight, but there is only so much football people will be willing to watch. At some point, it's going to slow down.

Football will still be huge. It will still be #1. But, at some point, one of the networks is going to overpay for the rights, struggle to have NFL programming make sense, and then you might see the contract prices come back down.

[ChicosBailBonds]

Well, put it this way: The market can't just grow indefinitely.

Networks cannot wait to get into bed with the NFL right? It's a can't lose proposition. They pay HUGE dollars for live NFL coverage, and the NFL delivers TONS of eyeballs and ad revenue.

At some point in the future, viewership is going to level off, or even decline. At that point, advertisers might put there money elsewhere, in which case the networks won't be able to generate enough ad revenue to justify the high cost of NFL programming.

I'm not saying it's going to happen overnight, but there is only so much football people will be willing to watch. At some point, it's going to slow down.

Football will still be huge. It will still be #1. But, at some point, one of the networks is going to overpay for the rights, struggle to have NFL programming make sense, and then you might see the contract prices come back down.

Viewership is already in decline, but revenue is already going up.  That's my point, I think you are thinking about it incorrectly.  In a fractured world with many alternative choices, viewership is going to decline.  It is inevitable.  The question then becomes, how valuable is that viewership in a world where there are 10 million other options?  For live advertisers, INCREDIBLY valuable.  So despite viewership flat or declining, the value of that viewership has actually become greater because the NFL is still diluted at a much lesser rate than anything else.

[brandx]

Or..... Maybe one thing follows the other. Contracts are already in place - so OF COURSE revenue is not gonna drop when viewership does. But what happens at the next negotiations after viewership has dropped 3,4,5 years in a row.

[Canned Goods n Ammo]

Viewership is already in decline, but revenue is already going up.  That's my point, I think you are thinking about it incorrectly.  In a fractured world with many alternative choices, viewership is going to decline.  It is inevitable.  The question then becomes, how valuable is that viewership in a world where there are 10 million other options?  For live advertisers, INCREDIBLY valuable.  So despite viewership flat or declining, the value of that viewership has actually become greater because the NFL is still diluted at a much lesser rate than anything else.

Right, so the NFL is dominating a shrinking/segmented marketplace.

That's great... but is it sustainable?

How long is (insert brand) going to pay a premium to advertise during NFL broadcasts & shows (where viewership is shrinking)?

Look, I'm not saying that the NFL is going to collapse tomorrow, but the television growth can't go forever. Eventually it's going to reach a tipping point where the ROI isn't worth it.

Superbowl ads are still expensive and popular for marketers, but they are not the magic bullet they were once thought to be.

NASCAR was the hottest thing in sports/marketing in 2001/2/3. There was a market correction 5 years later when brands realized the ROI wasn't what they thought.

At some point, the NFL isn't going to meet the ROI projections, and we'll see it come back to earth a little bit. Not a collapse. It will still be #1... but there might not be hundreds of hours of NFL programming every week of 10 different networks. (CBS, FS1, ESPN, FOX, CBS Sports, HBO, Showtime, NFL Network, NBC Sports Network, NBC).

It's just a little bloated right now (IMHO). It will look quite a bit different in 5 years. 
 

[ChicosBailBonds]

Right, so the NFL is dominating a shrinking/segmented marketplace.

That's great... but is it sustainable?

How long is (insert brand) going to pay a premium to advertise during NFL broadcasts & shows (where viewership is shrinking)?

Look, I'm not saying that the NFL is going to collapse tomorrow, but the television growth can't go forever. Eventually it's going to reach a tipping point where the ROI isn't worth it.

Superbowl ads are still expensive and popular for marketers, but they are not the magic bullet they were once thought to be.

NASCAR was the hottest thing in sports/marketing in 2001/2/3. There was a market correction 5 years later when brands realized the ROI wasn't what they thought.

At some point, the NFL isn't going to meet the ROI projections, and we'll see it come back to earth a little bit. Not a collapse. It will still be #1... but there might not be hundreds of hours of NFL programming every week of 10 different networks. (CBS, FS1, ESPN, FOX, CBS Sports, HBO, Showtime, NFL Network, NBC Sports Network, NBC).

It's just a little bloated right now (IMHO). It will look quite a bit different in 5 years. 
 

Well, for the next 9 years at a minimum, that's the deal.  That's the minimum length of the contracts and they drive it all.  Just wait until 2017, your head will spin when the wireless in market rights are up.  The $$$ is going to be off the charts.

Not an opinion....fact

[Canned Goods n Ammo]

Well, for the next 9 years at a minimum, that's the deal.  That's the minimum length of the contracts and they drive it all.  Just wait until 2017, your head will spin when the wireless in market rights are up.  The $$$ is going to be off the charts.

Not an opinion....fact

You know, I keep trying to be the wet blanket on this deal, so maybe I should flip it.

Do you see an end in sight for the NFL, or are LARGE sums of money going to keep coming indefinitely? Could the NFL become one of the largest industries in the US?

I guess I just keep seeing larger and larger and larger sums of money being invested (live programming, recorded content, merch, etc.), and I just can't see how it can go on forever. At some point, it has to level out and possibly decline.

[Chicago_inferiority_complexes]

He's making money off this, so of course it's gonna be seashells and balloons forever.

Question is, how long are lower to middle class baby boomer white males going to dominate the entertainment market?

[ChicosBailBonds]

You know, I keep trying to be the wet blanket on this deal, so maybe I should flip it.

Do you see an end in sight for the NFL, or are LARGE sums of money going to keep coming indefinitely? Could the NFL become one of the largest industries in the US?

I guess I just keep seeing larger and larger and larger sums of money being invested (live programming, recorded content, merch, etc.), and I just can't see how it can go on forever. At some point, it has to level out and possibly decline.

NBA TV rights deal just closed....$24billion for the next 9 years.....................................................

[ChicosBailBonds]

He's making money off this, so of course it's gonna be seashells and balloons forever.

Question is, how long are lower to middle class baby boomer white males going to dominate the entertainment market?

Nothing is seashells and balloons forever, but you make bets based on data, customer behaviors, etc, etc.   I think you are pigeon holing yourself by saying "middle class baby boomer white males".....look at who is consuming these sports products and paying for them, many more people than what you just described.  That's why the bet is placed where it is.

[Canned Goods n Ammo]

NBA TV rights deal just closed....$24billion for the next 9 years.....................................................

I saw that. Seems insane to me, but obviously the demand for live programing.

I guess the question still stands: Is there an end in sight? How high can it go?

I totally understand the demand/premium, but it can't go on forever right? Seems like the growth is just too rapid.

[ChicosBailBonds]

I saw that. Seems insane to me, but obviously the demand for live programing.

I guess the question still stands: Is there an end in sight? How high can it go?

I totally understand the demand/premium, but it can't go on forever right? Seems like the growth is just too rapid.

No one knows, these are calculated bets, but they are bets made by very smart people with a lot of data.  That kind of money, you just don't do it without an incredible amount of homework behind it.  Nothing is guaranteed in life.  Ratings will wane, but the value is in those that are actually watching live which has been placed on a per watcher at very high levels.

I've been hearing that this can't go on forever since I got into this almost 15 years ago.  I agree, it can't go on forever, but I haven't seen one lick of evidence that it has slowed.  In my former gig, we tried to slow it with the Pac 12, no Dodgers deal this year, etc.  The dollars are out of control, but they still keep coming.  The TNT and ESPN announcement basically means that huge increases are coming in television rates to pay for those channels, and since Turner and ESPN are on nearly every basic offering, everyone will pay.

[Canned Goods n Ammo]

No one knows, these are calculated bets, but they are bets made by very smart people with a lot of data.  That kind of money, you just don't do it without an incredible amount of homework behind it.  Nothing is guaranteed in life.  Ratings will wane, but the value is in those that are actually watching live which has been placed on a per watcher at very high levels.

I've been hearing that this can't go on forever since I got into this almost 15 years ago.  I agree, it can't go on forever, but I haven't seen one lick of evidence that it has slowed.  In my former gig, we tried to slow it with the Pac 12, no Dodgers deal this year, etc.  The dollars are out of control, but they still keep coming.  The TNT and ESPN announcement basically means that huge increases are coming in television rates to pay for those channels, and since Turner and ESPN are on nearly every basic offering, everyone will pay.

Man, I know you are right, but this kind of thinking seems exactly like what happened in previous bubbles/over-values.

People start breathing in their own fumes, and nobody turns a real critical eye towards the outside forces, risk, and unintended consequences. It's just "Well, it's still going, and the projection looks good."

I know on paper all of this stuff makes sense, but my spidey sense tells me the growth is too rapid, and there could be a snapback.

(I know it sounds cliche... I guess we'll see what happens in the coming years).

[Benny B]

Nothing is seashells and balloons forever, but you make bets based on data, customer behaviors, etc, etc.   I think you are pigeon holing yourself by saying "middle class baby boomer white males".....look at who is consuming these sports products and paying for them, many more people than what you just described.  That's why the bet is placed where it is.

Question, Chicos... will speaking of the concept of "inertia" set off the fire alarm at your office?  As in consumers who are simply "set in their ways."

It's no secret that Boomers and, to a lesser extent, Gen X - regardless of race and socioeconomic status - love their TV sports.  Millennials, not so much.  Even so, if you look at who is consuming and paying for sports, you're going to see a lot of households who are doing so because they subscribed long ago and haven't paid much attention to the marginal increases in rates over the past decade.  These are folks who have subscribed to the same tier/package for 10+ years, and haven't done anything except pay the bill and perhaps occasionally call about a service outage.  The upside is that these customers are profitable and easy to retain because they don't rock the boat; the downside is that if you do lose these customers due to a significant event (i.e. change in employment/income, a move, sticker shock, etc.), chances are pretty good you're never getting them back (because they'll soon be set in their "new" ways).

Over the next decade, millions of boomers are expected to move, and most are going on a fixed income.  This is bad for the cable/sat companies because a) aging consumers are the most prone to "inertia" and b) they are going to face a significant event that may result in them dropping their cable/sat package.  On top of that, you have the Millennial crowd who are migrating to major urban centers where they discover that a DB-4 antenna and a wi-fi connection best serves their minimized need for TV entertainment.

The bet is being placed today because the people making the decisions (and benefiting from them) are simply getting theirs while the getting is still good.  That way they won't need to worry about moving out of their homes or going on a fixed income in 10 years, while their former employees will be looking for new jobs.

[Spotcheck Billy]

No one knows, these are calculated bets, but they are bets made by very smart people with a lot of data.  That kind of money, you just don't do it without an incredible amount of homework behind it.  

that's not how you described the media deal TWC gave the Dodgers

meanwhile trying to view my DirecTV bill online to see why I got hit with an increase this month but your website unnatural carnal knowledgeing sucks donkey balls today and won't display chit  I see now that your site doesn't play nice with IE anymore

[jesmu84]

I'm not in economics or business or any related field. But this sounds like most other bubbles that have occurred. Everyone getting theirs while they can because the projections "look good". I have no doubt that chicos knows what he's talking about all the current trends and research show things being positive. As long as that continues, everyone is going to get all the money they can until it's not.

[brandx]

I'm not in economics or business or any related field. But this sounds like most other bubbles that have occurred. Everyone getting theirs while they can because the projections "look good". I have no doubt that chicos knows what he's talking about all the current trends and research show things being positive. As long as that continues, everyone is going to get all the money they can until it's not.

I agree completely. Have stated so several times here.

Philosophy has been a money maker several times.

[reinko]

Make no mistake, the NBA deal and upcoming college football deals will be on the backs of consumers.  Saddle up to higher cable costs, more fees, and like lambs to slaughter tens of millions of people will pay a few more $ a month to watch Sportscenter and live sports.  ESPN and Turner know consumers are morons, especially when it comes to sports.  They have deduced that enough people pay will pay 10-20-30% more because of football and basketball, and they don't care about 5% of people that might defect.

[brandx]

No one knows, these are calculated bets, but they are bets made by very smart people with a lot of data.

So were the bankers and investment house experts. Ammo's feeling is correct. Nothing goes up forever - contracts or not.

[ChicosBailBonds]

that's not how you described the media deal TWC gave the Dodgers

meanwhile trying to view my DirecTV bill online to see why I got hit with an increase this month but your website unnatural carnal knowledgeing sucks donkey balls today and won't display chit  I see now that your site doesn't play nice with IE anymore

The media deal that TWC gave the Dodgers was one of the worst deals ever, which is why no distributor has signed up for it.  That much money, for local programming is absurd.  This particular deal with the NBA and ESPN\TNT is much different.  It's a national platform deal, it brings product across 30 different teams and fan interest throughout the country, in includes playoffs, in includes OTT rights.  What makes the TWC deal even worse, regardless of whether TWC gets distribution for the product, the Dodgers get paid no matter what.  Absolute insanity.  They want almost $5 per sub per month for 6 months of content and on average about 3.5 hours per day of true viewership from a small niche audience in the grand scheme of things.  Far far different than what another channel delivers at that cost.  If the value was there, Charter, Comcast, Fios, UVerse...somebody....anybody....would have signed a deal.  No one has.

I can see my bill online without any problem whatsoever.  Works fine with IE8, Firefox32, and Chrome 37.  What kind of issues are you having that you can't see your bill?