Category Archives: Sports

Why the Proposed “Hulu Skinny Bundle” Will Be Set Up to Fail

The Wall Street Journal reported Sunday night that Hulu is developing its own over-the-top “skinny bundle” for release sometime in the first half of 2017. (Note: since the WSJ article is paywalled, most of this info comes from a Mutlichannel News writeup of it.)

According to the WSJ, the bundle would include, at minimum, channels associated with two of Hulu’s co-owners, Disney and Fox, including ABC and Fox owned-and-operated stations and other popular channels they own, including ESPN, FS1, and Fox’s regional sports networks. The reports I’ve seen don’t say whether the service would include channels from anyone else other than the third co-owner, NBC Universal, but one analyst speculated a little over a week ago that it might end up including channels from CBS and Time Warner, both of which have contributed to Hulu’s existing on-demand service (with Time Warner even approached about a stake in the company last year). In other words, it would include the five companies that offer substantial sports content and that, together, keep the cable bundle together. Even if Disney and Fox were only able to get the Turner networks on board, the Hulu service could conceivably be a one-stop-shop for sports fans with every nationally-televised game from MLB, the NBA, and every major college conference, every bowl game of significance, and every NCAA Tournament game not on broadcast television, plus, for fans of local teams, games of any team with an agreement with a Fox network. The main reason to get NBCU on board would be to appeal to NHL, NASCAR, golf, and soccer fans, as well as fans of teams on Comcast’s RSNs. All told, it could well be the biggest step yet towards the breakup of the cable bundle.

Which is precisely why the companies creating it, especially Disney, won’t let it be.

Both the analyst that speculated about this a couple weeks ago and the WSJ report suggest that a Hulu skinny bundle would cost around $40 per month. After slashing the price earlier this year, PlayStation Vue currently offers broadcast stations and a broad selection of popular channels, including ESPN, ESPN2, FS1, FS2, and all three of Turner’s networks that carry NCAA Tournament games, and popular networks from NBCU (but not NBCSN) and all of the non-sports four, for $39.99 a month in the markets where it carries broadcast stations. If you have an antenna and live in one of Vue’s non-broadcast markets, for just $5 more than the proposed Hulu skinny bundle, you can add most of the channels left out of Vue’s base package, including NBCSN, Golf Channel, beIN Sport, ESPNU, BTN, SEC Network, and regional sports networks. Of course, considering PS Vue dropped its price at the same time it added the uber-expensive Disney networks, it may well be operating at a loss in an attempt to spur adoption, and may hike its prices again later. Still, if the Hulu skinny bundle is competing with PS Vue at those prices, not to mention Sling TV currently offering (with the single stream package) all the ESPNs, including SEC Network, plus TNT and TBS for $25 a month or (with the multi-stream package) FS1, the Fox RSNs, and all three Turner networks for $20 a month (suggesting Sling would probably offer all those channels for around $40 once it synchronizes its packages, depending on the effect of adding the Viacom channels), there’s really little reason to sign up for the Hulu skinny bundle unless you really want NBCSN and Golf Channel or you just want to deny the non-sports four your money out of principle.

It’s hard to see who the Hulu skinny bundle would appeal to that wouldn’t be better served with Vue or Sling – which, of course, is probably the point. Disney and Fox don’t really want to do anything that would hasten the breakup of the cable bundle, so it’s not surprising they’d price it to be uncompetitive with Sling and Vue given its selection, even though they could theoretically offer a lower price since they’re not really going through middlemen, potentially setting it up to fail and giving them a reason to claim skinny bundles and going direct-to-consumer doesn’t work. If they did try to competitively price it, Disney likely wouldn’t sign off on launching it unless it had the non-sports four on board, effectively making it the same as Vue, because there’s nothing Disney fears more than cutting the non-sports four out of, and thus motivating them to become independent from, the cable bundle. (Incidentally, that same analyst that speculated about a Hulu skinny bundle, and about a skinny bundle with the non-sports four, suggests that the latter could cost just $9 a month. That’s cheaper than anything I speculated about at the time, though only barely.)

It’s become increasingly apparent that the current batch of “skinny bundles” is more about the Big Nine declaring their independence from cable companies and networks not owned by the Big Nine (not to mention broadcast stations) than from the cable bundle itself, with all of them too scared of the consequences of leaving the others. In that sense, there is some importance to a Hulu skinny bundle that gives Disney and Fox a distribution mechanism independent not only of cable companies but of any middlemen whatsoever. But don’t be fooled by the uncritical pro-cord-cutting media touting it as some sort of landmark development in the breakup of the cable bundle. In the end, a Hulu skinny bundle will do little to benefit the consumer, at least in the short term, only its owners.

Why is the NCAA Basketball National Championship on TBS?

Tonight, Villanova and North Carolina will face off for the NCAA Men’s Basketball National Championship – but you won’t see it on CBS. For the first time ever, college basketball will crown its national champion on cable, with Jim Nantz, Bill Raftery, and Grant Hill calling the action on TBS (and slanted “team stream” coverage of each team on TNT and truTV). How did this happen? Why was the NCAA willing and able to take the smaller audience of cable? Well, I gave the short answer in my book, The Game to Show the Games:

By 2010 CBS wanted to get out from under a contract to air the NCAA Tournament that was set to lose it considerable amounts of money each year, to the point of engaging in talks to get ESPN to take it off its hands. Certainly the NCAA was very interested in moving most of the tournament to cable, which not only had the potential to increase the rights fees the NCAA collected but also allowed every game to be shown nationally, without the regionalization CBS had engaged in. CBS ended up retaining the tournament by forming an alliance with Turner to show games on TBS, TNT, and truTV in addition to the CBS broadcast network. Turner had never shown college basketball before and truTV, once known as Court TV, had never shown sports of any kind before, but Turner, which was paying a larger portion of the rights fee, went so far as to start alternating the Final Four with CBS starting in 2016 (later negotiations allowed TBS to show the national semifinals in 2014 and 2015 while the national championship game remained on CBS).

The long answer? You’ll have to get the book for that, and for how television money has completely upended the world of sports over the last decade, especially since the BCS blazed this trail with its 2008 agreement with ESPN, how the race for sports rights has changed the TV industry in turn, and how it might all prove to be built on a house of cards that might already be tumbling down. For this week only, until Friday, April 8th, you can get it for Kindle absolutely FREE, or you can buy the paperback at most online booksellers anytime. By the time you’re done reading, you might wish you hadn’t watched the game at all.

Breaking down the new Thursday Night Football deal

Earlier this month the NFL announced a two-year deal with CBS and NBC to split the Thursday Night Football package, pocketing a cool $900 million in the process. CBS will have some games in the early part of the season, with NBC having the later part and NFL Network having some exclusives sprinkled between both parts. The NFL also still wants to sell the TNF package to an over-the-top outlet.

That’s a huge chunk of change, and it’s easy to look at that price and go “what sports rights bubble?” Certainly it looks like CBS and NBC don’t agree with Rich Greenfield that the massive amounts ESPN has paid for sports rights are rooted in assumptions that no longer hold and will end up undermining it, at least within the next two years. As I explain in the book, cord-cutting should actually make sports rights even more valuable, and in fact the forces driving it have arguably been underlying the sports rights boom all along, as one of the few pieces of content guaranteed to keep people watching linear television and keep them signed up for cable. If you look at this deal, you’re thinking it’s a good sign for the Big Ten’s ability to collect a hefty chunk of change from ESPN and Fox (not coincidentally two of the three outfits that didn’t get in on this deal).

That said, I do have to wonder if this is actually that great a deal for CBS and NBC. Analysts at Barclays looked at ad sales vs. rights fees and concluded that CBS lost money on Thursday Night Football last year, though they expect CBS to come out slightly ahead this year with the lower game load; throwing in production costs, Morgan Stanley thinks CBS lost $200 million on the deal and both networks could lose over $100 million a year under the new deal. Of course, ad sales aren’t the only benefit CBS gets from TNF; more NFL games increases the retransmission-consent value of CBS stations, high-rated NFL games increase the lead-in for local news, and CBS gets to use TNF as a platform to promote its other shows. On top of that, under normal circumstances networks do, in fact, make money off ads alone from NFL games. But CBS had to share its Thursday night package with NFL Network, meaning it likely had to share ad revenue with NFLN as well, and might have to share it with whatever OTT partner the NFL gets on board. That also means that, in theory, any retrans benefit from TNF games would be limited if cable operators could still pick them up off NFL Network, though I wouldn’t be surprised if the NFL would require cable operators to pick up CBS to get TNF games on NFL Network.

But selling games to an OTT partner could cripple the amount of money all three networks can get off TNF games from cable operators, even the NFLN-“exclusive” games their deals with cable operators require them to keep. The best-case scenario is that games are sold to Verizon or AT&T under similar terms as Verizon’s existing smartphone deal, where you have to sign up to their existing services to watch the games, meaning subscribers to rival carriers would have to watch on one of the linear networks. The next-best case is if the games are sold to a subscription service, meaning if you aren’t signed up for that service already there’s value in finding a service that carries one of the linear networks or getting an antenna, but by all accounts that’s unlikely. Where there could be a real problem is if the games are sold to an outfit like Yahoo under similar terms as their London game last year, where the stream is free to everyone. Besides making it more likely that Yahoo would want a cut of ad revenue, that means TNF games provide little to no incentive for cable operators to pay more for CBS, NBC, or NFL Network than they otherwise would, with the main incentive to want any of the networks being to avoid seeing Tweets that are as much as a minute ahead of the online stream. It also means some of the suggestions I’ve seen, where the cockamamie scheme where some games air on CBS, some NBC, and some NFL Network leads people to just watch all the games on NFLN, might instead lead people to watch it on the OTT outlet, limiting the amount that any of the networks benefit from the games.

If I’m CBS I’m not sure I agree to this deal without at least securing rights to the games for CBS All Access (and with NBC getting the second half of the season I’d want to find out how much to pay them to get the rights to the season-opening kickoff game, reducing the perception that the balance of Thursday games is tilted towards NBC with that and the Thanksgiving game); if I’m NBC I think long and hard about becoming a party to a scheme that could accelerate the growth of streaming video, potentially at the expense of my parent Comcast’s cable business. I certainly don’t think five games apiece, plus producing four more for NFL Network, with all the games airing on NFLN and an OTT outlet, is worth anything near what CBS and NBC are paying for them.

The NFL is talking about still having an opportunity to “grow the profile” of the Thursday night package, but if the NFL has to come up with this confusing scheme to split the games between two different broadcast networks and sell them to an over-the-top outlet, I think they’re bumping up against the limit of how much value the Thursday night games actually have, and I think this probably puts the nail in the coffin for the notion that the NFL will eventually sell part of the Thursday night package to a cable network like FS1 or NBCSN. The NFL is running up against the inherent limits of the Thursday night timeslot, the questionable quality of the games played on short rest and the need to give every team exactly one game played on short rest, meaning you inevitably have to put the Titans and Jaguars on at some point and you’re limited in how much you can showcase the marquee teams. NBC is salivating over the late-season games they get to show, but the lack of flexible scheduling means they could easily get shafted with dog games involving dog teams; at least early in the season you can put on name teams and people will watch before they know just how good or bad they actually are. (Of course, expect NBC to get the Cowboys the week after Thanksgiving every year, which is guaranteed to pop a rating no matter how much they or their opponents suck.)

Honestly, I wouldn’t be surprised if Thursday Night Football doesn’t last beyond the end of the current long-term deals in 2022. If selling it to a cable sports network is a dead letter – and Fox, NBC, and ESPN are all likely going to be badly hurting from their hefty investments in their cable sports networks by then – and there isn’t the oversupply of linear TV space there is now, then given the constraints on the product TNF really only makes sense as long as the NFL still has its own cable network, and while you’d think if any outfit could justify its own network, even in a future age of linear television contraction and a la carte, it would be the NFL, the limited live game inventory it would have would make it a tough proposition (something that’s not necessarily the case with college conferences like the Big Ten or SEC), especially given the pros and cons of continuing to sell some of it to another outlet. Depending on how viable an option ESPN is looking, I could see the NFL trying to monetize Monday Night Football in much the way they’ve been doing with Thursday nights, where they can offer more consistent, better matchups and better quality of play than what they can offer the networks and over-the-top outlets that have been bidding on TNF. It’s doubtful they can get the kind of money ESPN pays them for MNF, but then it’s doubtful ESPN itself will be able to pay that much by then.

The realities of trying to turn Thursday Night Football into an institution on par with MNF and SNF are coming home to roost, and while CBS, NBC, and an over-the-top outlet to be named later may be allowing the NFL to keep deluding itself otherwise for now, it may be about to bite all of them in the ass.

2016 Pro Football Hall of Fame Watch – The Top 50 Active Resumes

Surefire first-ballot players:

  1. QB Peyton Manning
  2. QB Tom Brady

These two stand far and away on top of the pack, and their lead has become a yawning chasm. If this is the end of the line for Manning, it will leave Brady standing alone in this category, and it may take at least a few years for anyone else to join him…

Borderline first-ballot players:

  1. RB Adrian Peterson
  2. QB Drew Brees
  3. QB Aaron Rodgers
  4. DT Kevin Williams

…by which I mean, maybe one or two more years of Adrian Peterson performing as he has. His career is all the more remarkable for how short most running back careers have been recently. In general, this year marks the point at which the current generation of players officially grabbed the brass ring and started positioning themselves for potential first-ballot induction. As such, the list is going to get a bit awkward the next few years until the All-Decade Team of the 2010s is named, which’ll be before any of the names on this year’s list are up for consideration; there’s considerable evidence the Hall of Fame voters weight All-Decade teams fairly heavily when deciding who to induct, with All-Decade players ending up inducted more often than not. As such, there’s increasingly going to be a divide between players who’ve played long enough to make the 2000s All-Decade Team and those who haven’t and are waiting for the 2010s Team to be named. I’m assuming Peterson and Rodgers are making that team, but the divide really makes itself felt in the next category; starting next year I may attempt to start predicting who makes the All-Decade Team and re-sort the list accordingly.

Surefire Hall of Famers:

  1. TE Antonio Gates
  2. CB Charles Woodson
  3. WR Calvin Johnson
  4. DE Julius Peppers
  5. CB Darrelle Revis
  6. TE Jason Witten
  7. LB DeMarcus Ware
  8. DE Dwight Freeney
  9. WR Andre Johnson

I’ve seen talk that Charles Woodson not only might go in first ballot, but might be in the running for best cornerback ever. Yeah, no. Even with Champ Bailey retiring a couple years ago, it’s only this year he even became the best active defensive back by resume, as his resume remains comparable to Troy Polamalu (Woodson has one more Pro Bowl selection with his swan song this year, but the AP at least named Polamalu a first-team All-Pro an additional time). Polamalu should get in the Hall of Fame in his first few years on the ballot and the same is true for Woodson, but best-ever they are not. As for Calvin Johnson and his own retirement talk, he should get into the Hall without too much delay (realistically I think his resume is on par with Gates), but the shortness of his career is likely to cost him a first-ballot spot.

Borderline Hall of Famers:

  1. WR Larry Fitzgerald
  2. WR Steve Smith
  3. WR Wes Welker
  4. DE Jared Allen
  5. RB Jamaal Charles
  6. RB LeSean McCoy
  7. RB Arian Foster
  8. OT Joe Thomas
  9. DE J.J. Watt
  10. TE Rob Gronkowski
  11. S Earl Thomas
  12. QB Ben Roethlisberger
  13. CB Patrick Peterson
  14. RB Marshawn Lynch
  15. DE Haloti Ngata
  16. WR Antonio Brown
  17. QB Eli Manning
  18. WR Brandon Marshall
  19. QB Michael Vick
  20. P Shane Lechler
  21. OT Jahri Evans
  22. DT Ndamukong Suh
  23. QB Philip Rivers
  24. KR Devin Hester
  25. K Adam Vinatieri

Because this list assesses players’ resumes if they retired today, it’s only this year that J.J. Watt, who may well prove to be one of the greatest defensive players ever, and Rob Gronkowski amass resumes good enough to even have a chance at the Hall. See the Class of 2020 list to see what can easily happen to players with Hall of Fame-caliber talent that cut their careers too short. Vinatieri remains an interesting situation: very few non-quarterbacks have been propelled into the Hall of Fame on the strength of their Super Bowls… but Vinatieri could be one of them, despite being a kicker, a position with only one other representative in the Hall at all.

Need work:

  • RB Chris Johnson
  • LB Navorro Bowman
  • T Jason Peters
  • S Eric Weddle
  • S Eric Berry
  • DT Gerald McCoy

A couple other players have similar resumes to McCoy and Doug Martin, but those two actually improved their resumes this year, so I can avoid having anyone “back” onto the list just because of players retiring. Probably I should have just thrown on one or two special-teams players, maybe a fullback like Mike Tolbert.

Young stars (exclamation marks indicate players with resumes already strong enough to be among the top 50):

  • LB Von Miller (5th year)
  • WR A.J. Green (5th year)
  • CB Richard Sherman (5th year)!
  • RB DeMarco Murray (5th year)
  • LB Justin Houston (5th year)
  • QB Cam Newton (5th year)!
  • WR Julio Jones (5th year)!
  • QB Russell Wilson (4th year)
  • WR Josh Gordon (4th year)
  • LB Luke Kuechly (4th year)
  • RB Doug Martin (4th year)!
  • LB Bobby Wagner (4th year)
  • RB Le’Veon Bell (3rd year)
  • C Travis Frederick (3rd year)
  • WR Odell Beckham Jr. (2nd year)
  • G Zack Martin (2nd year)
  • DT Aaron Donald (2nd year)
  • DE Khalil Mack (2nd year)
  • RB Todd Gurley (Rookie)
  • CB Marcus Peters (Rookie)

Exactly two rookies made the Pro Bowl in their own right this year, and they also just so happened to be Offensive and Defensive Rookies of the Year.

Players to watch for the Class of 2020:

  • S Troy Polamalu
  • WR Reggie Wayne
  • LB Patrick Willis
  • DE John Abraham
  • RB Maurice Jones-Drew

After last year’s potentially three-first-ballot class, this year should provide some breathing room for players that have been waiting to get in. I’m not sure Polamalu has a good enough resume (or a long enough career) to get in first ballot, but he should get in within a couple of years, so any reprieve is short-lived. No one else is assured of getting in, although Willis’ own short career will make a very interesting case study, as he was shaping up to be a surefire Hall of Famer before his abrupt retirement but now looks decidedly on the bubble. Perhaps more than anyone else, he epitomizes why Rob Gronkowski and J.J. Watt only this year became even borderline Hall of Famers. (I’m not actually sure Wayne will be eligible this year, as he remained on the Patriots’ roster into September before being cut. It’s always fun to see where the Hall of Fame considers a player’s career to have “actually” ended in these borderline situations where a player never played, and wasn’t on a roster during the actual season, but was on the roster for just long enough for you to make an argument either way.)

Does ESPN Have a Fixed Cost Problem?

Recently ESPN President John Skipper was interviewed by the Wall Street Journal about the numerous challenges facing the company in the age of cord-cutting, as became apparent over the past year. Here’s a telling excerpt from the interview:

WSJ: A lot of your sports rights deals are locked in for years. Given how pay TV is changing, how will that affect your negotiations with the leagues?

Mr. Skipper: It’s too soon to predict. Sports is a growth business. I think it would be foolish to predict that sports rights (prices) will decline. We hold more sports rights than the rest of the sports media combined. All we have to do is use all those rights to create continuing growth in revenue to cover them. To date, we’ve demonstrated that we’ve been able to do so, and I’m highly confident we will continue.

WSJ: Do you have any wiggle room with your league partners to adjust payments if things change and cord-cutting really picks up? Would you want that flexibility?

Mr. Skipper: We don’t have any contingent payment plans. We have rights agreements with defined payments. It’s probably not practical. I wouldn’t particularly entertain it if people came to me and said, “Gee, I’d like to do a deal with you, but if the economy’s worse I’d like to pay you less.”

Of course, there’s a big difference between a sluggish economy and cord-cutting: a sluggish economy is, in theory, a temporary phenomenon. Cord-cutting is a permanent shift in the way we consume our entertainment, and while declaring it a fad that’ll end once my generation has kids might be a good way to try and delude Wall Street into keeping investing into the business, deluding yourself into thinking that to the point of making long-term decisions based on that assumption would seem to be suicide. Indeed, BTIG analyst Rich Greenfield, perhaps the loudest voice on Wall Street casting doubt on ESPN’s long-term viability in the age of cord-cutting, identifies this as the single biggest fatal flaw that could come back to bite ESPN later:


Most of these sports, of course, ESPN “overpaid” for under a very different set of assumptions, that of the sports TV wars and the need and desire to keep valuable sports out of the hands of Fox and Comcast (the latter of which Greenfield has acknowledged elsewhere). In retrospect of course, the best approach for ESPN might have been to let Fox and Comcast have valuable sports to shore up the cable bundle, but to some extent they did that, particularly by tag-teaming with Fox on a number of rights. In the case of the NBA deal, Adam Silver quoted ESPN a price that Fox and Comcast were willing to pay, and ESPN could either pay that price, or wait for the exclusive negotiation window to end, at which point either the price would go up, Fox or Comcast would steal the rights away from ESPN, or both. Perhaps in retrospect ESPN should have let Fox or Comcast steal the rights and have them take the financial hit, but that would mean ESPN wouldn’t be able to sell NBA games (its most valuable non-football content) as part of any hypothetical future direct-to-consumer offering, and more to the point, Fox or Comcast would. As much as ESPN might suffer from accelerated cord-cutting, as it stands they’re much more able to monetize the rights they do have than Fox or Comcast, and those two companies might be poised to suffer much more (especially Fox), though their regional sports network interests might help offset that. It’s worth noting that ESPN consciously left a number of potential rights deals on the table, most notably NASCAR, in order to save up for an NBA deal, so it’s not like ESPN had the right to spend like Midas before; after all, even before cord-cutting became a household word, Disney was vigorously fighting a la carte bills in Congress. (And while ESPN and the NBA haven’t launched the OTT service that was part of the deal yet, its very inclusion as part of the deal suggests ESPN has taken at least some steps to shore up its empire against cord-cutting.)

Skipper argues that his company’s deals allow them to increase revenue, both by selling ads against the content and by using it as justification to raise subscriber fees further. So long as the cable bundle continues to exist, that’s true, even in the face of cord-cutting: the more audiences that find indispensable content locked up with ESPN, and thus find ESPN itself indispensable, the more indispensable ESPN is to cable operators, the more indispensable the cable bundle as a whole is to people that might otherwise consider cord-cutting, and the more audiences find value in any offering that has ESPN in it. Of course, I would argue that because of how much non-sports fans have been subsidizing sports networks, sports networks are probably overvalued compared to if they had to stand and fall on their own merits, so if the cable bundle completely broke up ESPN’s revenues would have no choice but to decline – the commonly-quoted $30 a month ESPN would supposedly have to charge to break even on an over-the-top offering is based on how many people would subscribe to ESPN in an a la carte world in the abstract, divorced from price, or at best at the $8 a month price ESPN and ESPN2 charge cable operators now, without regard for how many people wouldn’t be able to afford it at $30 a month. But realistically, the cable bundle isn’t going to break up tomorrow; Dave Warner estimates that, given ESPN’s continued carriage fee hikes, it wouldn’t even start making less money than the prior year until at least another year from now, and those losses wouldn’t become catastrophic until 2019 or 2020 at the earliest. By that point it’ll be time to renegotiate the Major League Baseball and Monday Night Football deals, allowing those deals, at least, to be brought up to date with the new reality, if ESPN’s able and willing to keep them at all, though it’ll be stuck with the NBA and college sports deals worth hundreds of millions of dollars a year until mid-decade and running the SEC Network into the 2030s.

But even if cord-cutting reaches the point that ESPN finds itself caught between deals signed under a very different environment and a present-day environment that doesn’t allow them to monetize it, there’s one more factor that could allow them to renegotiate many of those deals or may have justified the negotiation of contingency plans that go beyond a “sluggish economy”: sports entities would be just as upset about a contracting ESPN as ESPN is, even if they’d still be collecting the same money.

The College Football Playoff is the example I always bring up on this front. When the BCS first signed its blockbuster deal moving the Rose Bowl and college football’s national championship to cable in 2008, they made a lot of noise about how people wouldn’t be deprived of the games because ESPN was in the vast majority of homes and those homes it wasn’t in tended to fall outside of valuable advertising demographics, were disproportionately less likely to watch the games to begin with, or otherwise wouldn’t represent any big loss for ESPN and the BCS. That’s not a given anymore; my generation lies right at the heart of the cord-cutting movement, and as I alluded to earlier, not every sports fan, even those that find ESPN indispensable, will be able to pay $30 a month for it. I have always said that no major sports competition wants to go the way of boxing, with all the fights anyone would care about on premium cable and pay-per-view, and $30-a-month a la carte ESPN would be even more of a luxury than HBO, indeed would cost twice as much. There’s no way college football would want its national championship hitched to that wagon (assuming they actually want the playoff to succeed); the entire sport’s mindshare would plummet.

So if cord-cutting started accelerating to the point where ESPN is in only a third of households, I would imagine the CFP would want the playoff moved to ABC, and in return ESPN would be able to win lower rights-fee payments. Similarly, the NBA could win more regular-season and playoff games on ABC in exchange for lower rights fees, and the same might go for college conferences although there would be more restrictions there (in football, most of them are probably already on ABC as much as they realistically can be, except for the SEC which has exclusivity with CBS). This process is already starting: witness the move to simulcast this year’s NFL Wild Card playoff game on ABC, as well as the much-hyped move of regular-season NBA games to ABC Saturday Primetime, even if they’re coming out of ABC’s Sunday slate at the moment.

Of course, this depends heavily on broadcasting itself continuing to remain viable, and I’m not sure it should continue to be necessarily free if it does. Still, the fact remains that the cord-cutting revolution is going to put a big hurt on all media companies, and ESPN might be able to weather it better than most, and have a better chance of getting out from under the rights-fee payments Greenfield worries about than the text of the contracts might suggest. A big bellwether is going to be the Big Ten negotiations that should wrap up sometime this year; the most likely outcome seems to be ESPN and Fox sharing the rights, and for ESPN to leave them on the table entirely would effectively be admitting that Greenfield is right and ESPN has paid too much for sports rights overall and is now trying to ratchet them down quickly in the age of cord-cutting, to the point of letting competitors have a property as valuable as the Big Ten, which may be second only to the SEC among college conferences. At the same time, it would be foolish to simply ignore cord-cutting and the prospects for its continuation when valuing the Big Ten rights, so if ESPN and Fox pay in the same vicinity of what they would have paid in the pre-cord cutting era, it might be less a mistake in and of itself, as Greenfield might see it, as a sign that ESPN still believes its rights portfolio will prove to be worth what they’ve paid for it even if cord-cutting accelerates. On the other hand, if they pay substantially less but still leave the Big Ten walking away with a decent chunk of change we’ll get a better sense of the real value of sports rights when they aren’t inflated quite so much by the cable bundle. But if they pay a fraction of what might otherwise have been expected, maybe even behind inflation compared to ESPN’s existing deal and what Fox is paying for the conference’s football championship game? That’s when it’ll be time to panic, both regarding the struggles ahead for ESPN and the house of cards (no pun intended) all of sports has come to be built on.

The Sling TV-style service ESPN really fears (and why Sling TV has what it has)

According to SNL Kagan estimates from last spring (listed here), here are the most expensive channels on cable (not counting broadcast retransmission fees or regional sports networks):

  1. ESPN ($6.61)
  2. TNT ($1.65)
  3. Disney Channel ($1.34)
  4. NFL Network ($1.31)
  5. Fox News ($1.12)
  6. USA Network ($1.00)
  7. FS1 ($.99)
  8. TBS ($.85)
  9. ESPN2 ($.83)
  10. Nickelodeon ($.73)

The heavy presence of sports channels on the list, topped by ESPN having several times the figure of the next most expensive network, may be the most obvious thing that jumps out at you, but there’s something else remarkable about this list. I mention in the book that the vast majority of channels on your cable lineup are controlled by nine companies, but seven of the ten most expensive networks are controlled by just three companies: Disney, Fox, and Time Warner, who also represent two of the four major broadcast networks and the largest owner of regional sports networks. An eighth, NFL Network, isn’t controlled by any of the Big Nine. The remaining six members of the Big Nine account for just two of the ten most expensive networks, USA and Nickelodeon. Add Comcast to that group of three and you have three major broadcast networks, most of the country’s regional sports networks, and eight of the top nine most expensive national cable networks, not to mention HBO, with Showtime owned by the remaining broadcast network.

Last month I suggested that ESPN actually benefits from having as many companies as possible invested in sports, keeping them tied to the cable bundle and preventing any attempt to defect from it from being much use for sports fans. But only those four companies – Disney, Comcast, Fox, and Time Warner – have any serious investment in sports on cable, with CBS the only other Big Nine member with any stateside presence in sports at all. I talk about the Big Nine, but the reality is there’s a divide within the Big Nine between the Sports Four-and-a-Half – which as it happens, make up the most valuable members of the Big Nine according to the Fortune 500, in rough order of the level of their investment in sports aside from Comcast being propelled by its cable-operator business ahead of the rest – and the remaining members with no presence in sports. What would happen if those four companies – Viacom, Discovery, AMC, and Scripps – decided to defect from the cable bundle themselves, on their own or individually?

Let’s do some back-of-the-napkin math. Let’s start by assuming that the average American sees $50 of their cable bill go towards programming costs. Just getting rid of every network that’s not Nickelodeon on the list above takes out $15.70 of that total. Take out another 87 cents for ESPNU, NBCSN, and Golf Channel (based on numbers here). Take out another $5 for retransmission fees for broadcast stations, and another $3 for regional sports networks. Take out another $2.28 for another seven networks listed here, and around 10-20 cents for each additional network owned by one of these five companies in over 75 million households, so about 14-ish – let’s say that comes out to $2.15 so we get a nice, round number of dollars. That comes out to $29 in savings, over half of that $50 figure. That would mean a service from those four companies could cost as little as $21, about the same as Sling TV, though realistically in order to make up for the consequences it would charge at least $25. On the other hand, that figure also includes networks not owned by any of the Big Nine, as well as networks in under 75 million homes (which is still a substantial majority of homes), and it also undercounts the total for markets with multiple RSNs not counting college conference networks and might undercount the retransmission haul as well (not to mention the price for the remaining networks being taken out), so it’s possible the true figure might come down below $20. Viacom is the only company not already present in Sling TV, so if you take that as a baseline our service might cost as little as $10 just from taking Sling and removing the Disney networks, and if necessary Viacom has both the most expensive single network and a suite performing weak enough small cable operators are increasingly comfortable going without it and shareholders are questioning Sumner Redstone’s mental fitness to run the company, so jettisoning them would probably shave at least $2.40.

Whether $10, $20, or $25, what would that give the consumer? Well, there’d be an eclectic mix of documentary and lifestyle programming from the Discovery and Scripps networks. If you kept Viacom in the mix you’d have kids and family programming from Nickelodeon and Discovery Family, plus popular reality and other shows from MTV, VH1, and Spike, some of which might complement the Discovery/Scripps selection. Viacom would also have a back library of TV shows and it and AMC would have a decent movie selection, though maybe not on-demand, while AMC might also contribute some popular British shows from BBC America. And of course you’d have The Walking Dead and other popular and critically-acclaimed original shows from AMC, plus other original shows from OWN and the Viacom networks including South Park. Other than sports, the main thing you’d be lacking would be news or anything from the last decade that wasn’t originally produced for one of these networks (the main exceptions probably being on Comedy Central), and if you’re looking for anything specific associated with a network owned by one of the Sports Five you’d be out of luck, but as a complement to other services that exist such as Netflix and Hulu it could be a decently valuable collection, especially if you can price it substantially lower than Sling TV’s $20, and/or if Viacom brings enough value to the table to make up for the loss of the Disney and Turner networks.

Perhaps more important than the raw price, however, would be the fact anyone signed up for such a service would not be paying any form of sports tax. Unlike Sling TV, our service would allow anyone without a lick of interest in sports to get valuable cable content previously unavailable outside of a cable bundle without subsidizing a single sports network of any kind. That means even if it’s less popular than a Sling TV, if it gained any kind of traction whatsoever it would be a much bigger existential threat to the cable bundle and ESPN’s business model than anything else that exists so far. For the record, in the piece I linked to in my post a month ago about how a standalone ESPN would break up the cable bundle, the analyst in that piece specifically talks about a service consisting of precisely these four companies plus Turner, priced at $15 a month, suggesting $10 for these four companies alone is quite reasonable.

When talking about the cable-bundle business model, sports writers often note that just as non-sports fans subsidize sports networks, so do sports fans subsidize networks like AMC.  Of course, this attempt at equivocation, even if it comes down to a single sentence in an article, seems way overblown; if you believe the total amount being spent on the cable bundle reflects fair market value for whatever each consumer gets out of it, then if some networks are getting more than their open-market value others are getting less, and it seems likely that by and large, sports networks fall into the former category and most non-sports networks the latter. But in this area, the notion that non-sports networks are receiving some value from remaining attached to the cable bundle, and being subsidized by its sports fans, seems to be an important one. It is quite telling that while only two of the Sports Five are associated with Sling TV, three of the non-sports four are part of it. How much do Discovery, AMC, and Scripps continue to value remaining tied at the hip with ESPN, or at least keeping the cable bundle stable? Were they already aligned with Sling TV and either ESPN felt obligated to join them or Dish felt obligated to recruit them? Conversely, if ESPN came first, did they have any say in what other companies would be part of Sling TV? And how long until the calculus changes and these companies decide they have enough to gain to be worth defecting from, and thus potentially destroying, the cable bundle? Right now ESPN and the non-sports four need each other enough to be tied at the hip even into their ventures into OTT, even more than the companies with sports investments, but one day the time will come where ESPN needs them more than they need ESPN – or worse, they come to see their association with ESPN as a liability – and that may well be the day the cable bundle dies, or is at least terminally injured.

TGTSTG Bonus Content: The Saga of the Longhorn Network

ESPN and Fox had saved the Big 12. Their commitment to pay the Big 12 the same with 10 schools as with 12 schools, coupled with virtually the entire college football world outside the Pac-10 converging to try to prevent conference realignment Armageddon, enabled Big 12 commissioner Dan Beebe to offer Texas, Texas A&M, and Oklahoma enough of a financial inducement to stay in their conference and not defect to the Pac-10. Texas athletic director DeLoss Dodds effectively said as much, though not in so many words. Though a Longhorns network was “really important” to the school, and a move to the Pac-10 would have precluded that by forcing the school to surrender their rights to the conference for their own network, it wasn’t the “deal-breaker” to back out of the deal. Chris Plonsky, who headed the school’s women’s sports, similarly said that the ability to start a network wasn’t the “linchpin” that kept them in the Big 12, but it was a “very important variable”. Certainly it was a key element allowing the math to work out, and was widely perceived as the bedrock on which the foundation of the entire conference would be built going forward. Unlike other conferences that could plausibly claim to have an all-for-one, one-for-all mentality, the Big 12, it was just made clear, existed only because Texas allowed it to exist, and Texas allowed it to exist because it could collect much more money than the conference’s other schools, with many millions staked on a Longhorn network, an entire network dedicated to one school and potentially beamed directly into the campuses of many of its conference rivals, that would prevent the Big 12 from even considering going down the conference network path their peers were headed down. But Texas, despite having one of the biggest brand names and fan bases in college sports, was about to learn starting their own network would not be easy.

If anyone was as disappointed in the outcome as Larry Scott and the Pac-12, it was probably cable operators and satellite providers across the country. The formation of a handful of superconferences at least would have kept to a minimum the number of networks each of them would have tried to launch. Now, however, Texas, Oklahoma, and even Missouri were each talking about launching their own networks, and it wasn’t clear whether or not SEC or ACC schools would try to follow suit. There seemed to be a sense that launching a network was an automatic ATM guaranteed to let the money flow in. Cable operators wanted to make clear that things were not that easy and that they would take steps to protect their bottom line, and potentially, their customers’ bills. And they intended to make an example out of a Longhorn network.

Perhaps sensing the uphill battle ahead, Texas planned to invest no money in the enterprise and carry no risk if it failed. It would find a partner that could help with distribution and was willing to shoulder all the risk. Fox seemed to be the early leader in the clubhouse; it held most of the rights a new network would need and could conceivably use FSN’s existing deals with cable operators and satellite providers to get the network widely distributed right from the start. Fox also had experience partnering with the Big Ten on the Big Ten Network, something the other major contender, ESPN, had no experience in. But ESPN was able to make a renewed push to score the rights to, and full ownership of, the Longhorn Network. It would have to launch the network from scratch and go through all the bruising battles with cable operators, but as it turned out, if Texas did have to launch the network from scratch, it couldn’t ask for a better partner than ESPN.

The road was very bumpy to start. Even before engaging in high-level negotiations with cable operators, the network had an early misstep when ESPN decided it would be a good idea to air high-school football game, only for other schools to wonder whether that might violate NCAA recruiting rules or otherwise give Texas a recruiting advantage above and beyond that represented by the network itself. That, coupled with ESPN securing the rights to a conference football game, caused some to wonder whether the conference was on the brink of collapse again, and helped push Texas A&M and Missouri to jump ship to the SEC.

Meanwhile, ESPN went to distributors asking for 40 cents a subscriber, expensive for a cable channel but chump change compared to major-conference and regional sports networks (BTN started out charging 70 cents). Nonetheless, as the launch approached the network was far apart in talks with Time Warner Cable, DirecTV, and Comcast, in part because of the uncertainty surrounding high school and conference games, and in DirecTV’s case, because they wanted to wait for conference realignment to settle down (A&M was actively engaged in negotiations with the SEC as the network launched). It did have a deal with Verizon, but lacking a deal with TWC meant most people in Austin and a substantial proportion of people across the state wouldn’t be able to watch Texas’ 2011 home football opener against Rice. With even Verizon’s deal not kicking in until about a week after the network launched, the Longhorn Network opened in just 20,000 households. For all the controversy the network had engendered, almost no one, even within Austin let alone the state of Texas, could see it, and in a prelude to the CSN Houston and SportsNet LA showdowns to come, cable and satellite operators were remaining steadfast; by June, TWC and DirecTV weren’t even talking about carrying the network.

The network added AT&T U-Verse in time for the 2012 season, but the network was starting to look like folly; Oklahoma had gone deep into negotiations with Fox on a branded network, but what eventually emerged was merely a block of programming on Fox’s existing regional sports networks, while football coach Mack Brown, always uncomfortable with the level of access LHN wanted, seemed to imply that the distractions and added intelligence LHN provided may have contributed to Texas’ slow start that season. By 2013, it looked like LHN would enter a third season still without coverage on the largest distributors, casting a shadow over ESPN’s efforts to launch the SEC Network.

But just as the season prepared to begin, ESPN finally reached an agreement for Time Warner Cable to carry the Longhorn network. In March 2014, Disney reached a wide-ranging deal with Dish Network that included carriage for the Longhorn and SEC Networks, with DirecTV doing the same in December. What, exactly, changed to cause such a breakthrough, and whether it was a concession more on ESPN’s part or with distributors, may never be known, but one thing that is clear is that ESPN’s leverage with its panopoly of other networks was key to securing deals, certainly with satellite providers. Would the Longhorn Network have been able to overcome its early struggles to secure deals with distributors with any other partner, or certainly if Texas had opted to go it alone? It’s a question worth asking, and it helps explain why the ACC is still thinking about pursuing a network as a conference rather than individual schools looking into their own networks. Ultimately, the Longhorn Network’s success, as qualified as it is, may have more to do with the power of ESPN’s brand than Texas’.

Note: I’m probably not going to finish this initial series of Bonus Content posts this week; among other things, I still need to help put the finishing touches on the paperback. Hopefully the entire series will be done by the end of next week with whatever other posts I want to put together coming out over the rest of the month.

A Last-Ditch Case for Moving the Raiders, Not the Rams or Chargers, to Los Angeles

It’s looking increasingly like Los Angeles’ long national NFL-less nightmare is coming to an end. A week ago, the Chargers, Raiders, and Rams all filed paperwork to move their respective teams to the Los Angeles area. The Los Angeles Times reports momentum is building behind a proposal to have the Chargers and Rams share a stadium in Inglewood backed by Rams owner E. Stan Kroenke. Chargers owner Dean Spanos is sticking by his own proposal for a stadium in Carson shared with the Raiders, but there seems to be a lot more momentum behind the Inglewood project among the league’s other owners.

Which is good! The notion that half the AFC West would be playing in the same stadium always seemed kind of harebrained to me; that works in the NBA where the only division and conference divisions are geographical, but it smacks of absurdity in the NFL, where New York, the Baltimore-Washington corridor, and most two-team states are evenly balanced between AFC and NFC. It would also cause a television nightmare forcing a large number of crossflexes and/or primetime games to allow LA to see both teams (though they are the only two Pacific-time teams in the division, so Denver and Kansas City could play early when hosting one of them). I’m not convinced LA can actually support two teams, but if it is the second team was pretty much always going to be the Rams.

I also understand why the Chargers and not the Raiders are the AFC team with momentum behind a move to LA. All three markets have turned against the publicly-funded stadium charade and have done little to nothing to help any of the teams secure a new stadium in their home market, and don’t seem to have much support even among fans; in all likelihood, at least one of the teams was going to have to go back to a still-unsettled stadium situation. The Chargers have long seemed further apart with San Diego on a new stadium than the Raiders have with Oakland, and the Raiders have long been the black sheep of the league thanks to their rowdy fans; even LA politicians don’t seem to want the Raiders to return to LA.

But it’s at least conceivable that the NFL might still have a future in San Diego or certainly St. Louis. I’m not sure the NFL has a future in Oakland. The Times suggests that any deal that kept the Raiders in Oakland would include streamlining the process for them to move somewhere else, namely San Diego, St. Louis, or the 49ers stadium in Santa Clara. If it were the Chargers forced to stay put, St. Louis would be their only option. Only the Raiders can make the Bay Area a two-team market; for any other team, it’s not worth it. If a team is going to leave a market for another market, only for a team from a third market, already under consideration for moving to the second market, to fill the void in the first market, what was the point? Why not move the third market’s team to the second market to begin with?

Moreover, the Raiders’ problems seem deeper than those of the Chargers or Rams. The Raiders probably need a change of stadium more than any other team; they’re the last team to share their stadium with a baseball team, and that stadium is a literal sewage dump. Qualcomm Stadium and the Edward Jones Dome have their own problems, but by comparison with the Raiders, they smack of just another couple of owners upset that their stadiums don’t allow them to wine and dine the 1% enough. Even beyond the stadium situation, the Raiders seem to be slowly divorcing themselves from the Bay Area. A few years ago, a brawl between fans at a preseason game between the Raiders and 49ers resulted in the termination of the Raiders-49ers preseason series. Without a geographic rivalry preseason game, there’s barely any point to sharing a market.

While Angelenos themselves seem to want the Rams to return more than any other team, the Raiders certainly place second in terms of teams with roots in the area; the Chargers may have been based in LA their first few years in the AFL, but today’s Angelenos have no connection to them despite the best efforts of the Spanos family, while Ice Cube made an entire documentary a few years ago about the degree to which the Raiders became part of the identity of the city during their relatively brief time there. More than the importance of the Raiders to LA’s identity, though, is the importance of LA to the Raiders’ identity. As much as the suit-and-tie executives running the other teams or calling the shots in LA politics may not like the Raiders’ image, it’s one of the few remaining marks of authenticity in an increasingly corporatized league, and the Raiders would not be the Raiders outside Oakland or Los Angeles. The Raiders’ identity is wrapped up in their working-class roots and West Coast, California attitude; moving them to San Diego or St. Louis just because those cities are free would betray that (San Diego is enough of a vacation spot to undermine its other virtues), and moving them to Levi’s Stadium with its wall of luxury boxes also would mark the corporatization of the team, even if it happened against the Davis family’s wishes. (Besides the fact it would likely mean teams called “San Francisco” and “Oakland” would be playing in a stadium located in neither city, an outcome nearly as absurd as two AFC West teams in the same stadium.)

To be clear, I would, all things considered, be fine with the Chargers and Rams moving to LA, certainly compared to an all-AFC move, but I do think it would likely result in one of the teams angling to leave within a decade. But please, NFL owners, don’t let your quest to take advantage of the loyalty of NFL fans to appeal to corporate suits at all costs and desire to still have a “relocation magnet” city (which the deteriorating situations with these teams suggests is becoming a less potent tactic anyway) blind you to the facts on the ground. For once, let common sense reign. If you move two teams to LA, please, at least give serious consideration to restoring the status quo ante 1995.

TGTSTG Bonus Content: How European Soccer Conquered America (With Fox’s Help)

Chapter 3 of the book devotes three sections to soccer, and that was cut down from my initial draft of that part of the book. Because of the number of different important competitions represented, soccer presented several different examples of the fight between different sports outfits to pick up rights, and the most obvious example I found of how smaller, more niche sports and competitions benefitted from the competition. Even if soccer weren’t enjoying a boom in popularity, there would probably be a lot of it available on sports networks in the digital-cable era, especially given how much of it airs at times when no American sports are on. But my initial draft of the chapter would have spent a lot more time on the soccer boom itself, and just how much Fox Sports World/Fox Soccer Channel, and later ESPN’s World Cup coverage, contributed to it.

If I had to guess, I doubt anyone at Fox had any high-minded notions of increasing soccer’s popularity in the United States when they launched Fox Sports World. They just wanted to get their piece of the digital cable boom and supplement the Fox Sports Net group of regional sports networks they were building, and international rights Fox already held was an easy way to build such a network. Besides the rights Fox owned itself, the Prime network that was FSN’s foundation had aired a weekly hour-long highlight show of matches from England’s Premier League until losing the rights to ESPN in 1996, as well as airing the 1995 FA Cup final live, and operated a Spanish-language RSN in the Los Angeles area Fox converted into the (nationwide) Spanish-language version of Fox Sports World. To be sure, Fox ran an ad campaign for the network centered around its soccer coverage during the 1998 World Cup, less than a year into the network’s existence (until ESPN put the kibosh on cable companies and ABC affiliates running ads for a competitor), but Peter Ligouri, head of marketing for the division that included Fox Sports World and FSN, claimed the ads were targeted at people who were already familiar with the world-class leagues Fox Sports World aired. “We are not trying to grow the sport, we are trying to showcase our inventory,” he said. Even within Fox, it must have seemed doubtful anyone would be interested in FSW’s programming other than expatriates looking to keep up with the action back home.

Two years later, though, people at Fox were already starting to change their tune, as a quote from FSW’s then-general manager in the book shows. Fox Sports World’s programs, later Fox Soccer Channel’s programs, may have been shot out of broom closets at public-access budgets, but besides exposing many would-be soccer fans to action never before available in America (or in many cases, outside their home country) before, it served as a place where they could get soccer news and information at a time when the Internet was in its infancy, and became the hub of an entire soccer community, one destined to change the course of American soccer history. Their impact was already being felt in the aftermath of the 2006 World Cup, when they expressed outrage with ESPN’s lead announcer, Dave O’Brien, a baseball announcer with limited soccer experience. As a result, part of John Skipper’s strategy for the 2010 Cup was to build an announce team consisting entirely of British announcers known for their work on the Premier League – mostly people that had appeared on ESPN’s coverage they had already begun sub-licencing from Fox.

Jon Miller, who helped create the NHL’s Winter Classic and became President of Programming for NBC Sports after the Comcast acquisition, tells a story about getting up early on a Saturday morning to play golf, only a year or two after the 2006 World Cup, and seeing the surprising sight of his son, having come in late the previous night, up barely five hours later watching Manchester United play. His other son also got up early to watch Liverpool games, and he saw other neighborhood kids get up at the crack of dawn to watch the Premier League. “I said to myself, ‘There’s got to be something here to this.’ If you don’t learn from your kids you’re making a big mistake,” he reflected several years later. It was his first inkling of just how powerful a property the Premier League could be, and how successful it was already being for Fox Soccer, which would soon become Nielsen-rated and put numbers on the Premier League’s stateside popularity.

MLS, which had attempted to court youth soccer players at its launch, pivoted to embrace a more European model of soccer fandom based on older fans with more of a connection to the team. Seattle Sounders FC was a pioneer of the strategy; it reached out to local bars and restaurants at its launch and capitalized on many older fans’ connection with the team’s prior incarnation in the NASL, and was rewarded by shooting to the top of the league’s attendance charts, pulling in attendance figures higher than most MLS stadiums even held in capacity (many of them “soccer-specific stadiums” built in the preceding decade) and that would put them in the middle of the pack in the Premier League. By 2015, when the new New York City FC club created a new intra-New York rivalry, both sides did their best to try to imitate the European model of soccer fandom – in both its best and worst aspects: in August, fans of NYCFC and the older Red Bulls threw sandwich boards and curses at each other and sang taunts straight out of the English playbook. Thanks in part to increased interest in the league and the increased rights haul from the most recent television deal, MLS has also become a more attractive destination for players from around the world, even some in the prime of their careers, particularly from Latin America.

As for Fox Soccer, the international soccer fanbase it helped build not only proved its undoing, it ended up turning on its creator, the result both of its increased power as the fight for sports on cable heated up and the increased attention soccer was getting from people higher up the chain of command. Towards the end of Fox Soccer’s run, Fox began making a number of moves to target the general American sports market that succeeded only in alienating the hardcore soccer community it had built, the most infamous of them being an attempt to groom Gus Johnson as “the voice of American soccer”. Johnson had become a cult figure with his exuberant calls in the NCAA basketball tournament, but putting him on high-profile Champions League, Premier League, and FA Cup matches with next to no soccer experience only led to him becoming nearly as reviled as O’Brien among soccer fans. The Johnson experiment and other ill-fated moves, and a general perception of falling behind ESPN in production quality, meant many soccer fans weren’t all that broken up to see Fox Soccer go. Fox Soccer, the chief vector for the increasing popularity of the sport in the United States, had ended up collapsing under the weight of the very phenomenon it helped spawn.

TGTSTG Bonus Content: How Comcast Went from Cable Company to Sports Power

As promised, this week I’ll be posting supplementary material consisting of content excised from the book before publication or that I just didn’t have time to write before getting the book out the door, as we prepare for the book’s availability in paperback. This week I’ll try to have one outtake from each chapter from 2 to 8, in order; in coming weeks I hope to have further outtakes ready, some on topics that didn’t fit the structure of the book.

Though his father Ralph may have been the founder of Comcast, Brian Roberts was not groomed to take over the company at an early age – though not for lack of his trying. The elder Roberts attempted to gently steer his son away from the business, but Brian remained persistent and began working for Comcast full-time in 1981, shortly after graduating from his father’s alma mater, the University of Pennsylvania’s Wharton School of Finance. It took a decade for him to prove himself to the point of being named the heir apparent in 1990, when he became president of the company.

Both before and after that point, Roberts found time to pursue his other passion: squash. An All-American at the sport, Roberts helped lead the United States to silver medals at the Maccabiah Games in 1981, 1985, 1997, and 2009, winning the whole thing in 2005. As my book chronicles, sports was a big driver for the cable industry from the beginning, even before the launch of ESPN, with boxing on HBO and Braves games on TBS, and many cable companies had interests in regional sports networks and other sports programming interests. But during the late 90s and early 2000s, as cable companies such as TCI and Cablevision surrendered their RSNs to Fox and as they chafed under ESPN’s post-1998 rate increases, Comcast under Roberts’ leadership set out to build its own sports empire that would make it as much a beneficiary of the latter-day sports boom as a victim.

During the decade from Brian Roberts’ ascension to the president spot in 1990 to when his father transferred him his voting stock in 2000, Comcast was involved in the launches of Speedvision, the Outdoor Life Network, and the Golf Channel, and acquired the Philadelphia Flyers and 76ers in 1996 to launch its own Philadelphia-area RSN along with the Phillies, soon acquiring a second RSN in Home Team Sports in the Washington, DC area. As chronicled in Chapter 6 of the book, after Roberts spearheaded the acquisition of AT&T Broadband, Comcast set out to expand its RSN empire by selling stakes in its RSNs to teams, using the template laid out by YES Network to its advantage. But Comcast had its eyes on a far bigger prize.

In 2004, with Disney CEO Michael Eisner under fire for questionable performance and decision-making, Comcast launched a hostile takeover bid of the company worth $54 billion in stock and assuming nearly $12 billion of Disney’s debt, with ESPN, whose agreement with Comcast was slated to expire the following year, widely figured to be a key motivator of the deal. But the offer popped Disney’s stock price above what Comcast’s offer valued it at, Comcast refused to raise its offer, and less than three months later the offer was withdrawn.

Rebuffed in its attempt to own ESPN, Comcast began to focus on competing with it. Comcast held talks with the NFL about forming a new sports network, possibly in combination with other cable companies, or putting NFL games on OLN, and the NFL hadn’t yet decided to put its Thursday night package on its own network – and Comcast was considered the favorite among non-league bidders – when the NHL fell into Comcast’s lap. Though the casual sports fan may have scoffed at the notion of the NHL moving to the Outdoor Life Network, Comcast had already been talking about transitioning OLN into a general sports network, potentially competing with ESPN, and while there were few paying attention to the sports television business at the time that weren’t in that business, those that were had at least an inkling of Comcast’s plans.

By 2009, though, any dreams of OLN, now Versus, competing with ESPN had become a distant memory. At least publicly, Versus President Jamie Davis disclaimed any notion of trying to compete with ESPN, instead focusing on “super-serving” fans of those sports Versus held the rights to. Though Comcast had never been as bombastic about competing with ESPN as Fox would be, nonetheless Comcast had learned firsthand how difficult it could be, especially after failing to get NFL or (in 2006) MLB rights.

NBC Universal was a prime target for another takeover attempt. It was never particularly on-brand for owner General Electric, with most other broadcast and cable networks owned by companies focused on being media conglomerates, and 2009 seemed like a particularly ripe time for GE to get out of the media business. It was the aftermath of the BCS deal, broadcast advertising had been battered in the Great Recession, and the retransmission consent market had not yet heated up. NBC in particular had become a laughingstock, mired in last place for years and going through the Jay Leno Show fiasco, and the Universal movie studio wasn’t much better. Cable networks, though, backed by the stability of their subscription fee revenue streams, were thriving, with NBC Universal’s outlets like USA, SyFy, and MSNBC gaining in viewership. By most accounts, it was those cable networks, which would give Comcast control over more of the content it would deliver over its pipes, that was Roberts’ main target when he set out to acquire NBC Universal, with the broadcast network being heavily de-emphasized and potentially spun off if regulators put up objections strenuous enough to seeing one of the Big Four broadcast networks owned by over-the-air broadcasting’s nominal competitor.

But for those in the sports field, it was NBC’s broadcast operation and its bucket of sports rights, led by the legendary Dick Ebersol, that seemed to be the most valuable part of the deal. Ebersol’s expertise at producing top-notch productions of big events, especially the Olympics, would raise the quality and prestige of Comcast’s sports operations, and NBC would both be able to share its existing sports rights with Versus and provide much-needed muscle, and an attractive broadcast outlet, to acquire higher-profile rights for the network, while Comcast could integrate its regional sports networks in Chicago, Philadelphia, the Bay Area, and Washington, DC with NBC’s owned-and-operated stations in those markets. In turn, having an all-sports cable outlet and its subscription fees would in turn help NBC acquire rights it might not otherwise be able to score; Ebersol made comments both before and after the deal closed suggesting he had long looked wistfully at ESPN’s subscriber-fee income and welcomed the opportunity to play with a sports network that could take advantage of it. For many, a merger would create the most credible competitor to ESPN yet, at least until Fox’s Fox Sports 1 plans came to light. Just how valuable sports really was to Comcast in making the deal became apparent shortly after the deal closed in early 2011, when Ebersol began making sweeping changes to both sides of the newly-formed NBC Sports Group, including promising a name change for Versus – it would eventually become the NBC Sports Network, leaving no doubt as to the impact the merger had on Comcast’s sports operations – and re-branding NBC’s golf coverage as “Golf Channel on NBC”, much as ABC’s sports operations had become “ESPN on ABC”.

But barely four months after the deal closed, and less than three weeks before the International Olympic Committee was set to accept bids for Ebersol’s beloved Olympics, Ebersol abruptly resigned after he and Comcast were unable to reach terms on a contract extension and following much friction between Ebersol and Comcast, especially over how much they were willing to pay for sports rights, in the interim. Without Ebersol and his passion for the Olympics and relationships with the IOC, it was widely believed Comcast would be less willing to bid as much for an Olympic contract, especially given how much money the last contract was losing, and ESPN and Fox smelled a golden opportunity to steal the Games. CBS and Turner, which had previously met with the IOC but had little interest, even started talking about making a joint bid, though didn’t make the trip to Lausanne, Switzerland. The IOC had told bidders it expected to at least match the $2 billion NBC had paid for 2010 and 2012, but with NBC’s losses and Comcast expected to be more responsible, ESPN and Fox prepared to give the IOC lowball offers.

Three days after Ebersol’s resignation, Roberts and Steve Burke, the man he’d installed at the head of NBC Universal, as well as Mark Lazarus, Ebersol’s replacement, met with the people that had been working on NBC’s presentation to the IOC. The executives sat through the presentation that had been prepared and listened to the employees tell them what the Olympics meant to them and to NBC. By the end of the meeting, the employees were fully reassured of Comcast’s commitment to the Games.

The final presentation included a video of NBC employees talking about their Olympic memories and what the Games meant to them, which had IOC officials tearing up. It had also, apparently, moved Comcast executives. When the sealed bids were opened, ESPN and Fox offered up bids in the $1.4-1.5 billion range for two Olympics, not much higher than Fox’s bid from last time, which had IOC officials wondering whether Fox was even serious about pursuing the property. Comcast, on the other hand, bid nearly $2.4 billion. The IOC also gave networks the option of bidding on four Games, an option ESPN didn’t even take; Fox bid $3.4 billion for that package, but NBC paid a billion more than that in the bid the IOC ended up taking.

Comcast would end up bringing back Ebersol for the 2012 Games in an advisory capacity, and unexpectedly announced a stunning, no-bid 12-year extension of their agreement in 2014, ensuring NBC and Comcast will continue delivering the Games into American households into the 2030s. But other than the Premier League and a brief, two-year spell with MLS, NBC has acquired few other sporting events it didn’t already have the rights to before the merger; ESPN and Fox beginning to tag-team on sports rights made Comcast’s climb even more uphill than it was already, and the advent of Fox Sports 1 meant a more attractive alternative to ESPN for sports leagues. There are still hopes for NBCSN to acquire the NFL’s Thursday Night Football package, but they have become increasingly distant since the NFL’s broadcast-centric negotiations awarded it to CBS in 2014. NBC knows just how hard it is for them to compete with ESPN for sports rights. But at the very least, they’ve ensured that Comcast has some sports muscle of its own to flex with other cable operators.