Atlanta Braves New Stadium to Protect Future Revenue Streams
ESPN’s Sportscenter.
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How Much Money are We Talking About?
In the short-term the revenues going to pro leagues are relatively safe: many of them were inked in recent years just before this cable cutting crisis got kicked off:
- NFL (2011): $15.2 billion through 2021.
- MLB (2012): $5.6 billion through 2021.
- NBA (2014): $24 billion through 2025 (w/TNT; ESPN’s share is roughly half)
- Hockey (2015): World Cup rights in 2016 ($2 billion)
… and there are others, but those represent the current highlights. Again, this adds up to $6 billion annually, so ESPN must get that much from subscribers and ad revenue even before thinking about production costs (which are high) and profit.
Exacerbating the situation is that we’re talking about a publicly-traded growth company that becomes an attractive stock to purchase only when profits increase. ESPN’s profit represents a sizable portion of Disney’s total haul, so any reduction in coin coming in from the network could scare off investors.
In other words, it isn’t just about ‘weathering the storm’, it is more about getting ahead of it and convincing jittery investors that all is well. After all, Wall Street runs on two things: greed and fear. If you can’t feed the first, you’ll be courting the second. As you can see below, Disney’s stockholders have been kept very happy lately, and that’s why the cost-cutting has begun in earnest at ESPN.
amigobulls.com
There are other networks, of course, but many don’t have the wherewithal to compete against ESPN, but there have been limited victories. In 2011, FOX Sports won the rights to the 2018 and 2022 FIFA World Cup events for $1.2 billion, beating out ESPN.
One recent change has occurred, however: ESPN has now ended a long-standing relationship with NASCAR and has effectively turned over live race coverage to NBC and FOX (that deal is for 10 years and $8.2 billion). Though this was decided some time ago, it’s also possible that the hand-writing may have been on the wall.
Next: The Braves Have Been Paying Attention