Could ESPN drop Monday Night Football?

See also: Do NFL owners believe in ghosts?

The current NFL TV contract expires in 2021, and the rights landscape that gave the league multi-billion-dollar deals may be changing.  Streaming services on Amazon and Hulu as well as small rights agreements with social media giants Facebook and Twitter are bringing more players to the bargaining table, which will almost certainly make the right to broadcast an NFL game even more expensive by 2021.

But ESPN, who carries only Monday-night NFL contests, has been bleeding subscribers at an alarming rate.  According to Outkick the Coverage, the network has seen 15,000 subscribers a day drop out in October:

The reality is the network won't have this $2 billion to spend because their business is collapsing. That's why they aren't buying the NFL rights in 2021.

And all of this "spending spree" positive spin neglects a big fact, ESPN is going to have to pay a ton more to keep the rights they have now. ESPN pays $700 million a year to Major League Baseball and that deal is up in 2020. Figure MLB will expect an increase or ESPN will have to walk away here too. Let's say baseball costs $900 million a year. The college football playoff is up in eight years. That's a billion dollar a year property by itself if the playoff expands to eight teams. My bet is the SEC is going to want at least $200 million a year for its CBS package in five years. That's the entire amount of money that ESPN "saves" by not paying for the NFL and all it does is keep the content roughly the same. (Here's an olive branch to ESPN executives, try and convince the SEC to play its CBS game of the week on campus on Monday nights. That's at least one way to replace a big audience on Monday nights.)

But the most interesting part here is the tribute money back to Disney. That's what is likely to happen more and more often. As ESPN's business collapses Disney is going to draw more and more of the money off the network to use on growing businesses elsewhere as it slowly winds down the ESPN business. Instead of investing in a money-losing business Disney is going to take all the money out of ESPN it possibly can and use it more effectively. The end result? My best guess is that ESPN will end up auctioning off the latter years of its existing rights packages to the tech companies.

ESPN is the sports version of Blockbuster Video.

For a network that was once the darling of Wall Street, with double-digit increases in subscribers and profits every year, the current fracturing of cable and satellite models may spell the end of the network's pro football coverage:

First, quietly, ESPN has been able to pull off a dramatic judo move in recent agreements with its affiliates, one whose importance cannot be overstated: There is no longer specific contract language that requires the cable giant to have NFL games in order to earn its lofty (and industry-envied) subscriber fees, currently more than $7 per household. This means the network would not face automatic decreases in that vital artery of its dual revenue stream. Sure, distributors would be aghast, demanding to negotiate lower fees probably immediately, but the point is, there would be negotiations, enabling ESPN to do everything it could to keep those numbers as high as possible. 

​Second, when ESPN agreed to pay $15.2 billion for its current Monday Night Football deal, some of its key executives believed they were buying the schedule of the previous MNF package, i.e., more often than not, the best game or at least one of the top games of the week. But Sunday Night Football got that pedigree, and Fox and CBS games since then have also generally been more desirable than ESPN's matchups. With the advent of Thursday Night Football several years ago, ESPN's Monday night schedule has been further diluted of quality matchups, and the network hasn't been shy about voicing dissatisfaction. 

​NFL scheduling guru Howard Katz can keep more plates spinning in the air than anyone else in sports, and he's done the Lord's work trying to please everyone, but math is math, and there just aren't enough good games to go around. Yes, Monday Night Football ratings are up about 5 percent this year over last year, but it's still far behind 2015's viewership, for example. ESPN is averaging roughly 11 million viewers for its games; given myriad challenges the network is facing, will parent Disney believe that an audience of that size for only 17 weeks a year is worth billions? 

​Third, ESPN pays a disproportionally steeper rights fee for NFL games than CBS, Fox and NBC, because ESPN's deals give it access to NFL footage outside the games – NFL films and other NFL-related opportunities. 

The network's politicization of sports and sports programming only partially explains the network's losing position.  But there is no question that it has added significantly to ESPN's financial woes.

For all professional sports, the gravy train is about to go off the rails.  While there will be more bidders for pro sports rights with the addition of streaming and social media sites, there will almost certainly be fewer people watching.  Expect the next TV contracts to be shorter, as networks become warier of the changing TV landscape for sports and the American appetite for sports programming falls.

See also: Do NFL owners believe in ghosts?

The current NFL TV contract expires in 2021, and the rights landscape that gave the league multi-billion-dollar deals may be changing.  Streaming services on Amazon and Hulu as well as small rights agreements with social media giants Facebook and Twitter are bringing more players to the bargaining table, which will almost certainly make the right to broadcast an NFL game even more expensive by 2021.

But ESPN, who carries only Monday-night NFL contests, has been bleeding subscribers at an alarming rate.  According to Outkick the Coverage, the network has seen 15,000 subscribers a day drop out in October:

The reality is the network won't have this $2 billion to spend because their business is collapsing. That's why they aren't buying the NFL rights in 2021.

And all of this "spending spree" positive spin neglects a big fact, ESPN is going to have to pay a ton more to keep the rights they have now. ESPN pays $700 million a year to Major League Baseball and that deal is up in 2020. Figure MLB will expect an increase or ESPN will have to walk away here too. Let's say baseball costs $900 million a year. The college football playoff is up in eight years. That's a billion dollar a year property by itself if the playoff expands to eight teams. My bet is the SEC is going to want at least $200 million a year for its CBS package in five years. That's the entire amount of money that ESPN "saves" by not paying for the NFL and all it does is keep the content roughly the same. (Here's an olive branch to ESPN executives, try and convince the SEC to play its CBS game of the week on campus on Monday nights. That's at least one way to replace a big audience on Monday nights.)

But the most interesting part here is the tribute money back to Disney. That's what is likely to happen more and more often. As ESPN's business collapses Disney is going to draw more and more of the money off the network to use on growing businesses elsewhere as it slowly winds down the ESPN business. Instead of investing in a money-losing business Disney is going to take all the money out of ESPN it possibly can and use it more effectively. The end result? My best guess is that ESPN will end up auctioning off the latter years of its existing rights packages to the tech companies.

ESPN is the sports version of Blockbuster Video.

For a network that was once the darling of Wall Street, with double-digit increases in subscribers and profits every year, the current fracturing of cable and satellite models may spell the end of the network's pro football coverage:

First, quietly, ESPN has been able to pull off a dramatic judo move in recent agreements with its affiliates, one whose importance cannot be overstated: There is no longer specific contract language that requires the cable giant to have NFL games in order to earn its lofty (and industry-envied) subscriber fees, currently more than $7 per household. This means the network would not face automatic decreases in that vital artery of its dual revenue stream. Sure, distributors would be aghast, demanding to negotiate lower fees probably immediately, but the point is, there would be negotiations, enabling ESPN to do everything it could to keep those numbers as high as possible. 

​Second, when ESPN agreed to pay $15.2 billion for its current Monday Night Football deal, some of its key executives believed they were buying the schedule of the previous MNF package, i.e., more often than not, the best game or at least one of the top games of the week. But Sunday Night Football got that pedigree, and Fox and CBS games since then have also generally been more desirable than ESPN's matchups. With the advent of Thursday Night Football several years ago, ESPN's Monday night schedule has been further diluted of quality matchups, and the network hasn't been shy about voicing dissatisfaction. 

​NFL scheduling guru Howard Katz can keep more plates spinning in the air than anyone else in sports, and he's done the Lord's work trying to please everyone, but math is math, and there just aren't enough good games to go around. Yes, Monday Night Football ratings are up about 5 percent this year over last year, but it's still far behind 2015's viewership, for example. ESPN is averaging roughly 11 million viewers for its games; given myriad challenges the network is facing, will parent Disney believe that an audience of that size for only 17 weeks a year is worth billions? 

​Third, ESPN pays a disproportionally steeper rights fee for NFL games than CBS, Fox and NBC, because ESPN's deals give it access to NFL footage outside the games – NFL films and other NFL-related opportunities. 

The network's politicization of sports and sports programming only partially explains the network's losing position.  But there is no question that it has added significantly to ESPN's financial woes.

For all professional sports, the gravy train is about to go off the rails.  While there will be more bidders for pro sports rights with the addition of streaming and social media sites, there will almost certainly be fewer people watching.  Expect the next TV contracts to be shorter, as networks become warier of the changing TV landscape for sports and the American appetite for sports programming falls.

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