I know that everyone likes to discuss politics and I am as guilty as the rest but I thought I would talk about a different subject today. What I would like to discuss is college sports and to a degree professional sports.
Anyone that knows me is aware that I am a big sports fan. As I am writing this I am checking the clock on the time of the Penguins game. I got engaged at Forbes Field in August of 1969. The Pirates lost that game to the Braves but I came away a big winner since she said yes.
Over the past 15 years I have watched college conference morph into different versions of themselves all in the goal of chasing more media dollars. Gone are the days when conferences were based on regional rivalries. Today they are organized for the sole purpose of attracting larger contracts from the television networks. In many cases it appears that a football or basketball team has a university attached to it as opposed to the university having teams. In basketball it has become acute with players making one and two year pit stops on their way to the NBA. The “one and done” players do themselves no favor since studies show they take the minimum requires hours their first semester and enroll in the easiest classes they can find. They are not concerned with the second semester since they have no commitment to returning the following year. Class attendance in that semester is spotty at best.
The result of all this upheaval has been contracts that reward schools with between $30-50M per year. I further divides the haves and haves not and has created a two tiered system. You have the so-called Power 5 conferences and they you have all the rest.
But something is afoot that might upset the financial structure that now exists. Television ratings for college sports is dropping and even the mighty NFL has seen its ratings drop. Some would attribute this to the increasing glut of games available and fans grow weary of games being broadcast on more and more nights. In the NFL you have the normal Sunday afternoon games only to be followed by the Sunday Night Game, the Monday Night Game and finally the Thursday Night Game. In college football we have games on just about every night.
The millennial generation is cutting the cord. I watch my own family and two of my daughters don’t have cable TV in their homes. ESPN, the flagship of sports broadcasting, has seen the number of subscribers plummet in recent years and the numbers show that as many as 9 million households no longer have ESPN. Since ESPN is the largest dollar figure in your cable bill this starts to hurt. ESPN gets $7.21 per subscriber so when you lose that many subscribers you are seeing a hit of about $63M per month. The network did what any business would do in the faces of smaller revenue, they cut jobs and many long time ESPN employees were shown the door.
So what does this mean long term for college and professional sports? I think it means when the current contracts expire the networks are going to find they are holding the trump cards in the negotiations and the bidding wars that have allowed the schools to drive up fees will no longer be in play. Schools that have grown accustomed to having this large amount of funds available will have to retrench and think about some austerity moves on their own. The era where just about every game is televised, which leads to the differing game times, may be coming to an end. If a particular game is not that sexy the broadcasters might opt to pass on broadcasting the game. Of course the fans of those teams will be upset but money will be the driver on this decision.
In professional sports the NFL has been the bell ringer when it comes to negotiations with the networks. They have adeptly been able to parcel out games to all of the major networks and keep them all in a state of bidding for the best packages. Then they teamed with DirecTV to allow fans of each team to watch every game, no matter where they are living, for an increasing fee. In 2017 that fee will be north of $350 for the season. But if ratings continue to drop the networks will have a more difficult time selling the advertising necessary to meet those costs and the amount they are willing to pay to the NFL might start to decrease.
In summary (because the Penguins game is about to start) I suspect we will see sports on TV begin to make an adjustment. The amount of money flowing to the coffers of the athletic departments will decrease and the number of games being broadcast may also decline. This may actually be a good thing since being a student first and an athlete second might actually make a resurgence. In my opinion that would be a good thing.