Did the ACC wait too long for the ACC Network? (Updated)

The ACC/ESPN will just keep moving the goal line for what is looking more and more likely ESPN3 with some SEC talking heads on it (cause they haven't hired any pro ACC talking heads like they did with the SEC Network)

http://awfulannouncing.com/espn/time-espn-rethink-future-espnews-espnu.html?utm_source=dlvr.it&utm_medium=twitter

First for ESPNU, ESPN is moving its studio programming for its college sports channel from its Charlotte office back to Bristol. While the SEC Network programming and some production will remain in Charlotte, most of what you’ll see on ESPNU airwaves will resonate from Bristol. Several ESPNU on-air personalities were also involved in the recent round of layoffs.
The future of ESPNU should be something ESPN is seriously deliberating. The channel has gained significant increases in carriage in recent years, up to 69 million homes. And while the impact of layoffs might leave some wondering about ESPNU’s future, the bigger question is what ESPN can do with all of its college sports rights.
Although there were some fears over its future with ESPN’s budget cuts, President John Skipper has confirmed the network will launch in 2019. Combine all that ACC inventory with ESPN’s involvement in the SEC Network and Longhorn Network and there’s some dilution of rights that will naturally happen. Combined with ESPN’s decreasing share of Big Ten rights with Fox and ESPN has even less power five games for its main channels of ESPN, ESPN2, and ESPNU.
  Will ESPNU have enough premier, attractive college games to justify its current strategy? Or will the network need to go to a deeper well of college sports rights and tap into some of its ESPN3 inventory online which features a ton of games from across the spectrum. (Seriously, go check it out some time just how much sports ESPN shows online from across college sports and international sports and it will make your head spin.)

In fact, the SportsCenter episodes that were once on ESPNEWS all day long are already being minimalized. Today for instance, ESPNEWS will only air 3.5 hours of SportsCenter with most of the programming being replays of other ESPN studio shows and radio simulcasts. It’s really only “ESPNEWS” in name only at this point, so a rebrand makes a lot of sense.
For years now ESPNEWS has been showing live sports overflow from other ESPN networks. Especially during the college season, ESPNEWS features a multitude of games. ESPNU has also seen some interesting programming during special events. Just last weekend during the NFL Draft, ESPN aired a Wizards-Hawks playoff game on ESPNU because they needed to show two playoff games and the draft on the same night. ESPNEWS has also aired NBA playoff games in past years when Bristol was faced with a scheduling overload.
Taking into account the current sports media landscape, is it now time for ESPN to pull the trigger and recalibrate and rebrand these networks?
In all likelihood, an ESPN3 or even an ESPN4 television channel would be a lot more valuable to consumers and cable companies than ESPNEWS or ESPNU. Especially in the case of ESPNEWS, it’s an outdated name from a past time when people actually got news from television instead of their computer or smartphone.
What makes more sense for ESPN’s future – continuing forward with “U” and “NEWS” as is or taking a proactive step to increase the viability of both channels in a constantly changing environment? The value in being a sports network is live sports rights. The biggest thing working for ESPN, and the thing that will always secure its place as the unquestioned top dog in the industry (and maybe all of cable television) is live sports. It’s the games! It always has been and always will be. But it’s never been more important given how challenging the current climate is for ESPN and other sports networks.
 It doesn’t take strenuous mental gymnastics to see a scenario where ESPN turns “U” and “NEWS” into ESPN3 and the ACC Network. The ideal scenario would be ESPNU becoming ESPN3 with its superior reach and carriage and eventually turning ESPNEWS into the ACC Network. That would give ESPN a head start on carriage negotiations for the new conference network that could potentially get contentious given the bearish sports market and a nationwide footprint. If ESPN really wanted to get aggressive, they could create an ESPN3 and ESPN4 and try to strike deals for a newly created ACC Network all on its own.
Does an ESPN4, halfway to the Ocho, sound a little crazy? Maybe so, but when you think about it ESPN already has seven channels – ESPN, ESPN2, ESPNU, ESPNEWS, ESPN Classic, SEC Network, Longhorn Network – and that’s not even counting what’s online or on subscription services. ESPN has way more than enough sports rights to go around and can stock an ESPN3 and even an ESPN4 with wall to wall live sports.
Imagine a future where ESPN3 shows not only college sports, but international sports like the World Darts Championship or Super 14 rugby (both of which ESPN has shown online). Yes, streaming rights are different than television rights, and this would be a serious rebrand, but think of all the possibilities. ESPN could send a message to FS1 and all their competitors that while things might not be as smooth as they’ve ever been, they’d be doubling their commitment to live sports and showing the world that they still intend to be known as the self-proclaimed worldwide leader. If ESPNU and ESPNEWS are going to show events like real live NBA Playoff games, they’re already acting as ESPN3 and ESPN4 as is.
Of course, it’s not just live sports. There could be 30 for 30 marathons, replays or simulcasts of the existing studio shows like we see now, and so much more. ESPN wants a future where their talent is more multi-faceted and able to check multiple boxes, so why not do the same thing with their programming? ESPN wouldn’t have to lessen their focus on college sports or news, but by opening up the gates to ESPN3… and maybe even ESPN4… they could give themselves more options for the future. And right now anything that can give the company more options should be strongly considered.

The latest

• Jay Cutler reportedly might retire to work in broadcasting
• Is ditching cable for an OTT service worth it?
• ESPN’s John Skipper has allegedly given “total confirmation” of linear ACC Network launch in 2019
• ESPN satisfaction among Republicans has been dropping steadily

Will ESPNU have enough premier, attractive college games to justify its current strategy? Or will the network need to go to a deeper well of college sports rights and tap into some of its ESPN3 inventory online which features a ton of games from across the spectrum. (Seriously, go check it out some time just how much sports ESPN shows online from across college sports and international sports and it will make your head spin.)

Ira Schoffel‏Verified account @IraSchoffel 2h2 hours ago

Ira Schoffel Retweeted Richard Deitsch

Notable: Jim Miller, who literally wrote the book on ESPN, says he doesn't think ESPN will go through with an ACC channel beyond digital.https://twitter.com/richarddeitsch/status/859100220667383812 …

Ira Schoffel added,

Richard DeitschVerified account @richarddeitsch

 

Jon Pence‏ @scacchoops 23m23 minutes ago

Twitter's live TV investment could be lifeline for ACC Network http://www.scacchoops.com/twitters-live-tv-investment-could-be-lifeline-for-acc-network …pic.twitter.com/bJWFiqnPD2

http://www.scacchoops.com/twitters-live-tv-investment-could-be-lifeline-for-acc-network

Last week’s ESPN layoffs created some concern around what happens next for the ACC Network (and the payouts that would follow for the Syracuse Orange and the rest of the league). SU athletic director John Wildhack attempted to calm those concerns a bit. But nonetheless, what happens next for ESPN and the conference network should be top of mind.

Assuming this thing ends up pretty focused on digital content delivery and consumption, one option could be the emerging platforms popping up around the more social parts of the web.

Twitter, if you didn’t notice, has tossed itself into the live TV ring with full force. Yesterday’s announcement of new live programming initiatives from Bloomberg (24-hour news), MLBAM, Players’ Tribune, STADIUM, the WNBA and many more.

On top of Twitter, Facebook’s gotten itself into the live TV game as well, and same goes for Hulu, Amazon and YouTube (among countless others).

So when Wildhack voiced his belief in ESPN, he also never said the result of the ACC Network’s formation would be a traditional, linear television network.

Now, with all of these additional platform options and the obvious effect of cord-cutting, perhaps it would behoove the ACC and ESPN to end up pursuing something like what Twitter’s offering instead. Rather than asking users to subscribe to individual ACC Network programming -- or an expensive cable/satellite package featuring ESPN -- the option may soon exist for users to just watch for free on Twitter.

The earnings would come from in-stream ads, which would be more worthwhile for brands (and more lucrative for Twitter) because they’d potentially reach a much larger audience.

The key there is, of course, potential. For niche programming like ACC Network events, perhaps the viewership upside is there (vs. linear television). But for larger events, hosting on Twitter could end up being a major shortcoming — especially if it doesn’t appear elsewhere.

It’s not just the ACC that has these sorts of concerns around audience, either. The NFL’s fighting its own ongoing battle around the evolution of video content, and for the first time ever, saw falling audience numbers in 2016. NFL games on Twitter last season (there were 10 in all) averaged less than 300,000 live viewers, versus over 15 million for most live national broadcasts on actual TV.

So therein lies the problem for the ACC: What are you sacrificing by going a non-traditional route? Sure, the deals the Big Ten and SEC received years ago would be fantastic. But that is no longer the reality we live in.

Twitter, Facebook or Amazon live programming could be the new normal, and that could end up being just fine. It could also be problematic — even if like Wildhack stated himself, ESPN puts their full weight behind a network.

This isn’t to play alarmist. It’s actually just a look at a potential emerging platform that could be a more viable option for the ACC Network within the next five years or so.

Agree? Disagree? Share your own thoughts below.

http://www.al.com/sports/index.ssf/2017/05/how_espns_struggles_could_dera.html

At some point that could force the market to correct itself and the money that grew and grew for each media rights deal could finally come back down to earth. That would have far-reaching implications across sports including potentially in college football. Television money, particularly from ESPN, has dramatically changed the college football landscape over the last decade. It was the engine behind conference realignment, exploding coaching salaries and ostentatious facilities upgrades. It is the defining reason the gulf between the Power 5 and Group of Five keeps growing wider.

The major question is what happens when ESPN and other TV networks decide they don't want to keep upping the ante each time a rights deal comes up for renewal?

Could cord-cutting and other issues eventually negatively impact the more powerful Power 5 conferences? In theory, absolutely.

If ESPN continues to lose subscribers at its current rate, it might have no choice but to pass on expensive college rights given its billions of dollars of overhead for NFL and NBA media rights. The company has already made small cost-saving measures like last week's layoffs, but if it wants to save significant money, it'll have to reevaluate its right-securing process. Live sports television has long been considered the antidote to cord-cutting, but any time even a non-sports fan drops cable, ESPN feels it.

If ESPN isn't as interested or as aggressive as it has been, it lowers the demand and likely reduces the cost of the rights. That'll mean less TV money for university athletic departments to bankroll new facilities, $5 million coaching salaries and other major rising expenses. It should come as no surprise that 13 of the 20 highest-paid football coaches reside in the SEC and Big Ten, the two conferences that receive by far the most TV money.

That would likely be years off, though, as the next Power 5 conference to hit the market again, the Big Ten, won't do so until 2022-23. The SEC (2033-34) and the ACC (2035-36) are locked into deals for nearly two more decades. Even if it wanted to, ESPN can't get out of those long-term contracts.

The Big Ten should be an interesting bellwether for an evolving market. When it agreed to a deal in 2016, media observers believed ESPN might not bid on the rights given its shrinking distribution. ESPN ultimately decided to pay an average of $190 million annually but for a lesser package after reportedly bidding low on the initial package that went to FOX. Given the way the industry has changed so quickly, ESPN could be in a significantly different place, for better or worse, when the Big Ten's rights come up for bidding again.

Adam Gajo, the sports business analyst for SNL Kagan, doesn't expect demand to crater, though.

"Growth may slow a bit, depending on a number of factors, but the values will continue to grow, especially for top tier programming like the Power 5 conference rights," Gajo said. "As the rights continue to increase, they may continue to be shared by multiple networks."

Each Power 5 conference could be impacted by the trends differently. The Pac-12, which has retained ownership in its conference network, could be well-positioned if over-the-top platforms like Sling TV keep growing. The Pac-12 has had major problems with distribution, leading athletic directors to grumble about less revenue compared to other conferences, but the Pac-12 isn't as tied to the cable subscription model as many of its peers. Still, the demand for the Pac-12 channels in an a la carte model would likely be significantly less -- meaning it'd have to charge less -- than its Power 5 conference peers.

The ACC, teamed with ESPN, is slated to get its linear network in 2019 though there are questions about whether that will come to fruition given the current landscape. The conference has publicly been optimistic about its upcoming network, but there are those in the industry who believe it may have waited too long to launch. No one expects there to be as much demand for an ACC Network as there was for the SEC Network when it launched in 2014. ESPN could decide there isn't enough demand to create an ACC Network channel which would limit revenue growth for the conference's schools. A more optimistic outlook is the ACC Network could take a spot on ESPN's lineup currently held by ESPNU, ESPNClassic or ESPNNews.

If not the Big Ten, the SEC could be in the most stable position. It is already generating huge money from TV -- the league listed $420 million in revenue from TV, radio rights in its 2016 filings -- and can always bank on a large, passionate fanbase wanting its product. The downside for the SEC is that it doesn't own a stake in its network -- ESPN maintains 100 percent ownership -- and instead agreed to split revenue at a rate believed to be less than 50-50 for the conference and its members. The SEC is the Power 5 conference most tied to ESPN given it leveraged ESPN's distribution model for massive early success rather than maintain ownership but that is still far more beneficial than detrimental at this point. The SEC Network is the strongest of the three conference networks -- its average subscriber cost is more than three times the Pac-12's -- and as long as it keeps showing football games, that doesn't figure to change.

"Even in the midst of cord-cutting, we've seen progression in revenue," said SEC commissioner Greg Sankey. "I think there's actually more good news there than there is anything that's problematic for us."

Another important factor to consider is that as the market evolves, new potential distributors will pop up. Twitter and Amazon have both shown an interest in live sports programming, signing deals to stream some of NFL's Thursday Night Football package. It's certainly conceivable that a digital operation like Amazon or YouTube could make a play for college sports rights if ESPN and other traditional companies shy away. Thus far only smaller conferences like CUSA have opted for non-traditional partnerships, largely out of necessity, though if the money and platform is good enough, eventually bigger conferences could be enticed.



The passion for college sports, and subsequent strong viewership, will always make it attractive to rights-holders. It's properties like college football that earn companies significant money through both subscription and advertising revenue. Even if ESPN, FS1 and other companies continue to see significant subscriber losses, the market for college media rights isn't going to suddenly evaporate.

"One theory out there is there is a sports bubble that is about to burst for properties, but I don't see that as being the case," said Dan Shevchik, vice president of Sports Media Advisors. "Maybe there is greater margin pressure for people who distribute the content."

A financial doomsday isn't likely for college football's premier conferences though they could be dinged. If anything, it'll be a course correction as media companies try to be more financially prudent when securing rights.