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Why NBC Sports Will Lose the Premier League in 2016

espn always on Why NBC Sports Will Lose the Premier League in 2016

Last week during “upfronts,” those giant press conferences where television networks pimp their new programming to advertisers, ESPN president John Skipper was asked whether his network would bid on the next Premier League contract, which would begin in 2016.

“We’ll be interested in it,” Skipper told the press. “We love the English Premier League.”

This quote came just days after Major League Soccer struck a new 8-year rights deal with ESPN and Fox Sports worth an estimated $75 million per year — nearly a four-fold increase over MLS’ previous rights deals, which were worth just $19 million per year. (MLS’ Spanish-language deal with Univision also increased from $8 million per year to $15 million per year.)

That’s not all ESPN and Fox Sports have been teaming up to buy lately. In the last four years, ESPN and Fox Sports have agreed to spend $1.2 billion per year for Major League Baseball, $200 million per year for Big 12 college sports, and $200 million per year for Pac-12 college sports. This alliance seems likely to spend big to take the Premier League away from NBC after 2016.

Why? NBC is owned by Comcast, and ESPN cannot allow Comcast to build a competitive sports network because that would give Comcast leverage over ESPN in carriage fee negotiations.

Right now, ESPN commands a carriage fee of $5.40 per month. That money flows directly from your cable bill to the network. ESPN2 also collects a carriage fee of $0.68 per month. Those numbers are expected to increase by 6.5% sometime this summer. With those two channels in more than 97.3 million homes, ESPN stands to collect more than $7.5 billion in carriage fees over the next 12 months.

This is how ESPN is able to spend $1.9 billion per year on the rights to NFL Monday Night Football and more than $1.3 billion per year on a wide variety of college sports. It is also how, according to Forbes, ESPN has attained an estimated valuation of $50.8 billion. That makes ESPN roughly 36% of the value of The Walt Disney Company.

Because of this, ESPN must ward off any threats to its revenue stream — such as a major cable TV carrier owning a sports network that might ever be considered on par with ESPN. Some have even suggested that ESPN encouraged Fox to create a national sports channel in order to prevent NBCSN from attaining any sort of dominance. After all, any cable package that includes Fox Sports 1 also includes ESPN and ESPN2. You can watch Fox Sports 1 all day, and ESPN will still get its share of your cable bill.

NBCSN, meanwhile, collects only $0.31 per month from each of the 78 million homes it reaches. That brings in only $290 million. Thus, NBC’s strategy with NBCSN has been to focus on sports with smaller, more dedicated fan bases and keep spending low to allow the channel to pay for itself. NBCSN can afford to pay $83.3 million per year for the Premier League and $200 million per year on the National Hockey League, but anything more than that would require some help from the parent company.

Comcast could do it, of course. The cable TV behemoth posted net incomes of $1.87 billion in the last quarter and a $1.91 billion the previous quarter. Plus, NBC just signed a $7.75 billion deal to keep the Olympics through 2032, as well as a 10-year, $4.2 billion deal with NASCAR. Money for those two deals, though, comes from sources other than NBCSN. In order for stave off what would likely be a $200-million-per-year bid from ESPN and Fox for the Premier League, Comcast would have to change course and allow NBCSN to spend more than it makes — and if Comcast really wants to do that, it might as well go big and spend $2 billion per year to take the NBA away from ESPN in 2016.

NBC has attracted lots of praise and impressive ratings for its coverage of the Premier League this season, but unless Comcast loosens its purse strings on NBCSN, the network will have a difficult time keeping the U.S. TV rights to the Premier League when that TV deal is up for renewal next year. ESPN will do whatever it takes to keep Comcast from gaining any leverage in future carriage fee talks, and that includes leaving NBCSN with hockey, auto racing, and very little else.

But on the bright side, we’ll get to hear Ian Darke call Premier League games again in a few years.

Dave Warner writes about the rising cost of sports TV rights at What You Pay For Sports.

This entry was posted in Leagues: EPL, NBC. Bookmark the permalink.

43 Responses to Why NBC Sports Will Lose the Premier League in 2016

  1. krazymunky says:

    oh god if espn/fox sports gets EPL…does that mean we would be forced to listen to Gus Johnson every weekend?!?

  2. Cantona says:

    This screams Oliver Tse.. Are we sure the author is not writing under a pseudonym?

    Cantona—

  3. Gringo says:

    Nothing wrong with Gus Johnson, lets find something else to complain about people, the guy’s enthusiasm during matches more than makes up for his lack of soccer knowledge. Maybe we should discuss more about what’s occurring during the game and less about the commentary.

    • Faithless says:

      How about NO

      Until Fox changes course The Gus experiment is open for continual criticism

    • krazymunky says:

      luckily enough for the FA Cup Final. the pub i was at was able to watch Fox Deportes and SAP (2nd audio) it to Martin Tyler!

    • Velocity_grl says:

      It’d be a lot more interesting to discuss what’s occurring during the game if someone competent was doing the commentary. Otherwise no sports would have commentary! That’s kind of the problem with Gus Johnson.

    • Tim says:

      No accent = No credibility with WST readers.

      • Guy says:

        Hows so? Do you see the, “I’m going to pull my hair out!” commentary when John Strong does a match? No, of course you don’t, because Strong actually knows what he’s talking about…unlike Gus.

        The general dislike of Johnson’s commentary is entirely about his lack of competency, not his accent.

    • Faithless says:

      Real fans want someone who knows the game … It’s about credibility … Gus has none.

      If you like Gus and dumbed down soccer, that itself tells you everything you need to know about the football knowledge of the Gus defenders

    • jtm371 says:

      hey gringo
      GUS SUCKS! understand! :)

  4. Rick says:

    ESPN has great coverage of soccer as we will see very soon from the World Cup. NBC has excellent coverage. Fox is terrible and trying to cover soccer like it’s wrestling.
    ESPN it’s time for a 24 hour soccer channel!

    • YoYo says:

      My fear is that ESPN/FOX will buy the rights to the Prem and then will do what they have done in the past. Have one game on ESPN per game week. One or two will be on a FOX channel and the rest will be relegated to Fox Soccer 2 Go which you have to pay for. I know I wont be paying for that type of experience.

  5. bennett311 says:

    Anything to get Ian Darke back commenting on EPL games.

    • YoYo says:

      Not so fast. I know Ian Darke is a very good at what he does. BUT that to mean does not outweigh the superior coverage that NBC provides. I’m not much of a fan of Arlo White, but what he lacks, is made up by extensive and complete coverage including many other knowledgeable people. I’ll enjoy Ian Darke for the World Cup but give me NBC any day for the Prem.

    • Graeme_Souness's Mustache of Power says:

      Faaaarck that. You think ESPN will treat the EPL with the same single-minded purpose and reverence that NBC does?

      Skipper even said he can’t do what NBC does because of their college football commitments. I don’t need some half-assing here. ESPN can piss off.

  6. YoYo says:

    The prospect of the English Premier broadcasting rights going back to ESPN/FOX is quite disturbing. As a regular viewer of the English Premier League over the past 5-6 years, I can say(along with many many others) that NBC has done a wonderful job this year with it’s coverage of the English Premier League. From the commentary teams, to the availability of every single game through NBC Live Extra. The ability to stream any English Premier League game is worth the price to have NBCSN alone. One thing that I have really noticed about my viewing habits with NBC’s coverage of the English Premier League is the lack of a daily everything soccer show. I used to tune in most nights to watch Fox Soccer Report and when the rights changed to NBC I thought that this was going to be a big lose not to have the daily everything soccer show catching me up on anything I might have missed during the day. But what I noticed was, NBC’s coverage of the English Premier League was so good, so comprehensive, that I found myself not needed that daily dose of soccer highlights. Fox Soccer News was really nothing to brag about but it served its purpose. After NBC took over, Fox Soccer News just seemed so forced. In my opinion a show such as Fox Soccer Daily isn’t needed if the coverage of the events are properly and extensively shown in the first place. I sincerely hope that NBC will pony up to maintain the broadcasting rights to the English Premier League for the extended future.

  7. Flyvanescence says:

    Its not just the Prem that NBCSN does a great job at. Its hockey coverage is also excellent, and Sunday Night Football on NBC is possibly the best live sports telecast in the country. Theyve built a great reputation in the last year and a half for their sports coverage. I hope they dont lose it.

    • YoYo says:

      I agree, NBC does an excellent job of covering just about everything that it has on offer. This quality is what will surely be missing if ESPN/FOX buys back the broadcasting rights.

    • Justin says:

      I myself am a very big hockey fan. You are right, NBC’s coverage is solid (except when they cover the Penguins… to which it is nauseating).

      Okay, back to soccer.

  8. Justin says:

    Call me crazy, but I don’t want the EPL to be “ESPN-ized”… everything on ESPN is the same because they apply the same formula to every sport.

    NBCSN has been a breath of fresh air and prefer EPL to stay with them. Soccer will always be spread out across networks (that’s the nature of business). I would prefer the following:

    NBCSN: Premier League & Champions League and MLS.

    ESPN: USMNT (Ian Darke!), La Liga, Serie A

    BeIn Sports: Bundesliga, League 1

    Fox Sports: Nothing… okay fine, the NASL & Europa League.

  9. Cody (#2) says:

    I loved ESPN Saturday morning game, but the day ESPN/Fox get their PL right back will be the day your cable bill will go up $75 to pay for the channel the games will be on.

    When I purchased Fox Soccer channel many years ago, I had to upgrade 2 tiers of cable packages, plus buy a sports package. Total crap. I hope those days are long gone.

  10. Paul says:

    Richard Scudamore is safe in his job and won’t be going anywhere – it was him who chose NBCUniversal based on their proposals last time around. He’s hoping to put the tender out for UK rights this coming December so the rest of the world won’t be too far behind. Unlike the UK tender that has to go to the highest bidder, they can take less money abroad for a more lucrative all round package in key markets. Even if ESPN/Fox did bid big money, it doesn’t necessarily mean they’ll win. Considering the numbers that have been reported for Premier League coverage in the US for last season I’d hazard a guess that NBCU are a pretty good call to retain for the next rights cycle.

  11. Bo says:

    As much as I dislike big company NBC, I love NBCSN and what they have done with the BPL this year. so No, No, No! They need to keep it!

    and get the Champions League! Those extra time channels would welcome all the games that aren’t Man United on Fox Sports 1. haha :)

  12. Brian says:

    If ESPN/Fox get the EPL in 2016 then I’m moving to Canada :-) .

  13. KopMan says:

    NBC sounds great, wish i could watch it here in London

  14. Smokey Bacon says:

    I’m not averse to ESPN having another go but I doubt NBC will walk away easily. They have been THE game changer for the coverage of the sport in this country. I know people with no interest in the sport until now who are talking about it. The ratings and the reviews are off the charts. The EPL is a vital cog in NBCs strategy for making NBCSN viable. It would not surprise me to see them add properties when they come up like the champions league.

  15. Rick says:

    Let’s throw some shade on this one. The main deterrent from ESPN taking Premier League rights back is the same one that made them sale most of their overseas networks, Disney. Lest not forget, it was not they were necessarily under performing, it was the fact that college sports (football) ate a lot out of the revenue pie. That also has to be coupled with the 600 lbs. gorilla none as the NFL. Do not underestimate the ‘shields’ influence on this matter, especially with more game packages becoming available. One last point, while not as important to them as the Olympics, it’s approaching priority levels. If ESPN retains it current rights and picks up more NFL rights, Disney may prefer to not to spend the cash.

  16. Jeff says:

    While Dave’s article makes many valid points regarding Disney/FOX wanting to make sure Comcast and as a result NBCSN doesn’t become massive due to the market power they would have, I don’t think anyone knows how the next EPL rights auction will turn out.

    Two years ago, most people thought FOX/ESPN would retain the EPL rights comfortably – until NBC blew them out of the water with their bid. Before that in the UK, ESPN were expected to retain their 23 game package & expand that to 38 games (due to an increase in UK televised games). Instead BT secured those 38 games (abit in different packages), ESPN became part of BT Sport and for the first time now – Sky Sports has a very serious threat and challenger in BT. Finally in New Zealand, Sky Sport who had broadcast the EPL for a long time lost their rights to an online company who set up the ‘Premier League Pass’ streaming service.

    What I’m trying to say is that recent auctions has shown nothing is certain when it comes to EPL rights – no matter how much we think things might/should pan out…

    • jtm371 says:

      Jeff
      have you signed up for the forums? if so what is your sign in name? I have a couple of questions for you if your a Kiwi. thanks :)

  17. Martin J. says:

    Much can and will change between now and the next round of bidding for the EPL rights. No one knows who will be bidding then and there’s no guarantee that NBC will want to continue with EPL coverage anyway. So let’s wait until the 2015-16 season to see what the landscape is like then.

    • Christopher Harris says:

      NBC is guaranteed to make a bid for the Premier League rights. We’ll find out next year who will win the bid, but it’s never too early to discuss the impending war between NBC and FOX/ESPN to see who wins the rights.

  18. jtm371 says:

    God help us if fox wins back the EPL rights.

  19. Distin says:

    Ill informed bad journalism yet again. No facts and a topic based on his opinion.

    ESPN lost the rights to the Prem because of negligence. If the rights were that important to them they would have been able to make a decision on the ground to raise the bid. The person dealing with the bid did not have the authority to go to a figure that would keep them in touch.
    Please stop writing this rubbish.

  20. Gerry says:

    ESPN bidding is fine. It’s the ESPN joined by Fox that is scary.

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