Yesterday, Sports Business Daily reported that "Fox is close to signing a deal that gives it half of the Big Ten’s available media rights package..." This would be a huge shift for the Big Ten Conference; while Fox already owns a majority of BTN, they currently only have the rights to the B1G Football Championship game, while everything else is shown on the ESPN networks, BTN, and CBS (basketball only).
Nothing has been officially confirmed, as the terms of the deal are still fluid, but it appears that Fox will have the rights to around 25 football and 50 basketball games, which will be carried on FOX and FS1 starting in the fall of 2017. According to SBD, this deal will run "six years and could cost Fox as much as $250M per year."
The second half of the package is still up for grabs, which includes another 25 football and 50 basketball games, as well as the football championship game every other year. However, these terms are still fluid, so expect those numbers to change between now and when the deal is officially signed. ESPN had presented "a non-competitive bid several weeks ago, as the company continues to look for areas to save costs" but it seems Jim Delany and the conference are shifting their attention to Fox Sports if they remain the largest bidder.
This is obviously a huge blow to ESPN, but it's one that most of us saw coming. ESPN has been falling apart for over a year now. From 2013 to 2015, ESPN lost 7 million subscribers, according to Business Insider. While a drop from 99 million to 92 million may not seem like a lot, it is still a decent chunk of revenue that ESPN no longer has. After all, ESPN is one of the most expensive cable networks in your cable package, often costing over $6/month for each subscriber, according to the Wall Street Journal. That's at least $42 million per month in lost revenue for ESPN (per my back of the envelope calculations), and that's not even considering ESPN2 and other ESPN networks.
A large part of ESPN's fall is the cord cutting trend; it has certainly gained momentum in the last 5 years, especially among the younger generations (myself included). As Netflix, Amazon, Hulu, and HBO expand their streaming services, many are dropping their cable packages for these cheaper alternatives and buying a digital antenna to pick up their local channels for free.
Now certainly, we can argue on here that most of us won't cut cable because we want to watch our sports, and cable alternatives, like Sling and Playstation Vue, are still limited and have their bugs. However, it is important to remember that we are in the minority. A survey commissioned in January by BTIG Research found that 56% of those surveyed would drop ESPN and ESPN 2 from their cable package just to save $8 per month on their cable bill. These results did not vary by age groups as well.
ESPN is a sinking ship, and it has been sinking for awhile. With its failure to launch the ACC Network on time, laying off over 300 employees last year alone, and now losing a majority of B1G media rights, ESPN will no longer be the "Worldwide Leader in Sports" and will require a massive downsize.
Okay, enough about ESPN falling apart. How is the change going to impact you?
For starters, many of you might have to alter your cable subscriptions. While most of us have access to FOX, either through a TV antenna or basic cable, FS1 and FS2 may not be available in your current cable packages. I went ahead and quickly looked at the channels offered by Comcast, Dish, and DirecTV, the 3 largest TV providers in the country. I have made a table below of the cheapest packages that carry BTN, ESPN, FS1, etc. by those three.
Please note that these packages might be different in your area, as I live in Ann Arbor and seeing what is offered here. Do not use my table as your proof to change packages, do your own research first. I am also not listing the prices, as I do not have any of these TV packages, so the prices I am seeing are the promo rates (and I don't want to go into the fine print to find the actual prices for each of these). And of course, these packages could change between now and the fall of 2017 when Fox will pick up more B1G games.
|(As of April 20th, 2016)||Comcast||Dish||DirecTV|
|BTN||Digital Starter (140+ channels)||America's Top 120+||Choice (175+ channels)|
|ESPN||Digital Starter (140+ channels)||America's Top 120||Entertainment (150+ channels)|
|ESPN2||Digital Starter (140+ channels)||America's Top 120||Entertainment (150+ channels)|
|ESPNU||Digital Preferred (220+ channels)||America's Top 120||Choice (175+ channels)|
|ESPNews||Digital Preferred (220+ channels)||America's Top 120||Choice (175+ channels)|
|FS1||Digital Economy/Starter||America's Top 200||Entertainment (150+ channels)|
|FS2||Not Offered||America's Top 120+||Xtra (220+ channels)|
Right away, we see there isn't too much of a difference. In most cases, if you're already paying for BTN and/or ESPNews/U, you should be receiving at least FS1 (in Ann Arbor, of course). However, it becomes a little tricky with FS2, as it is either included in the more expensive packages, or not offered at all. I would expect this to change once the Fox Networks pick up more Big Ten games, as more customers will ask for them to be included in their packages. Of course, that doesn't always go so well.
While the money coming in from Fox will be a boon for the conference and its members, there's still concern about viewership. Though its viewership is growing, FS1 has had terrible ratings, and still has less views than ESPNU for men's college basketball. Now, a basic linear trend analysis would show that FS1 should surpass ESPNU in the next year or 2, but it still isn't close to the numbers ESPN 1 and 2 pull in, even if their numbers are declining. One could argue that FS1 is limited since it is focused on the Big East and other smaller conferences, but Creighton's most watched game this season was their NIT game against Alabama, which aired on ESPN, not FS1. Overall, people just aren't watching Fox Sports, as Deadspin called FS1 "a ratings wasting disease..."
And let's not forget that FS1 still struggles to get their facts right at times:
Pretty sure that's closer to 40,000 @FS1... pic.twitter.com/iPhgyB1zPn— Juan Crespo (@Air_Force_Juan) September 6, 2015
So what are we left with? While we'll still see some B1G games on ESPN, most of the coverage will be shifting to FOX, FS1, and FS2 (along with BTN) as ESPN cannot afford B1G media rights anymore. Though this will be an exciting and new opportunity, with more money for the B1G and its members, there's still a concern about ratings and viewership. If Fox fails to grow its viewership, will the Big Ten fall into media darkness? And let's not forget the cord cutting: as Fox Sports continues to grow, it is losing subscribers like everyone else. Perhaps they will look into more standalone streaming services, but only time will tell. I am hoping that Fox is investing in the B1G so that it does boost their networks and builds momentum for their channels.
Even though I am not an expert, I do think this will be a positive contract for the Big Ten and its members, but I am cautiously optimistic. This sort of is the Big Ten's only option if ESPN wants to cut costs, unless NBC or CBS can offer a better deal, but even their cable networks rate lower the FS1. We will just have to wait and see when the 2017-18 athletic year kicks off for the Big Ten on Fox.