PHXCATS wrote:
What he says is the truth. The next round for broadcast rights is going to go way down in terms of dollars for each school. ESPN and Fox wont be able to pay as much. And Hulu, Google and Netflix already make tons of money in their other core businesses, not live sports broadcasting. What that means is that they will not risk losing their nestegg to bring in live sports, which means their bids wont be that high. All the more reason why attendance matters so much.
There's just enough truth sprinkled into the patently false to make that seem reasonable.
There is a reason sports franchises are worth more than ever, and rising at a nearly absurd rate...advertising eyeballs.
While there was some overreach in the first round of league network contracts and sports contracts in general, it has more to do with an adjustment of how we view ratings and share than anything else. Commercials were effective tools before DVRs, and even more so before VCRs. You had a captured audience. Now...who watches a show when it airs? Not many, unless they are just guide-surfing and watching a bunch of different shows, still skipping the commercials.
So pay services with content have done well, but they are oversaturating the market with product. As long as subscribers keep coming back, who cares, I guess. But, like a restaurant with too many items, what happens is nothing is done well. We may be approaching that as more and more companies jump into content providing.
But the one live air item you can count on for eyeballs is sports. Some people DVR and zap through, but most enjoy the shared experience of watching live. And what we now know is it really isn't about the sheer number of eyeballs, but about brand recognition, viewer connection with ads, and how much the owner of the eyeballs is paying attention. That is something that is far more prevalent with sports viewers than general content viewers. We have to adjust the concept of ratings/share and come up with a new standard for absorption or effectiveness. Sports deliver, but those who have to spend the dollar have ample opportunity to use the outdated rating/share model to push for cheaper ad time. Like the FICO/Credit Score model that was developed to predict unsecured credit repayment being used for homes and cars, the ratings/share model is a square peg in a round hole. It was too much for creditors to custom score (most tried) on credit because of fair lending laws.
No such limitation exists within the ad world. So...the first company to property predict effectiveness of audience and weight the score with a modicum of documented success will run the ad rate world. In the meantime, the ad buyers were over-exuberant, and now are pushing back, in part to make up for their loss of effectiveness everywhere else.
But sports still provide brand-savvy and attentive eyeballs. The attendance at games will continue to shrink, and, frankly...no one is going to care as long as media rights cover the freight. Stadiums will get smaller and smaller with more and more amenities to capture high paying attendees, much like music promotion. Many will be priced out of the smaller, luxurious stadiums, but be able to watch games in between 4.5 minute ad holes.