2016 showed us there’s no sure thing in sports media

December 31, 2016
Category: Newsletters

It wasn’t that long ago that there were a few sure things in this world:

— ESPN would continue to print money thanks to fees from its 100 million-person subscriber base.

— The NFL would continue to generate massive TV ratings thanks to an insatiable demand for all things football.

— The Cubs would continue their century-plus run of futility thanks to a curse from a goat, not to mention terrible management.

Fast forward to 2016, and things look different: ESPN’s subscriber base has declined to 88 million people, off 12 percent since 2011; the forecast is for more losses. Shockingly, the NFL saw sharp decreases in ratings during much of the season, prompting talk that the league might be losing its vicegrip on the U.S.

And — lo and behold — the Cubs killed the goat by actually winning their first World Series in 108 years. With a young core, they could go from lovable losers to insufferable winners in upcoming seasons.

Setting the Cubs aside, the lesson on the sports media front is clear: There are no sure things anymore. Even ESPN and the NFL aren’t immune.

In fact, the economic situation has turned around so dramatically that some market analysts are even suggesting that parent company Disney should consider selling ESPN. That notion would have been unthinkable a few years ago.

Now both entities have their own spin on what’s happening. Earlier this month, ESPN released a statement saying, “We remain at the forefront of the industry, and no one is navigating change better than Disney and ESPN.”

John Ourand of Street & Smith’s Sports Business Daily wrote:

“The point behind ESPN’s statement it that it has deals with Sling, PlayStation Vue, DirecTV Now and Hulu that are not counted in the Nielsen sample. While those subscriber gains do not match what is being lost from cable and satellite operators, they do not show up in Nielsen. ESPN also believes it has an advantage in the digital arena, saying that its programs see an 8-10 percent viewership lift when streams and out-of-home audiences are added to TV numbers.”

As for the NFL, the recent ratings have bounced back. In fact, the Dallas-Giants game on Sunday, Dec. 11 had 26.5 million viewers, the highest for a Week 14 game since 1989, and Monday’s Dallas-Detroit game delivered nearly 19 million viewers for ESPN.

There is no denying the seismic shifts affecting these superpowers. ESPN faces a significant challenge with cord cutters finding alternatives to paying the high fees for cable. Then there are the never-weres, as research indicates many young folks don’t think it is essential to actually watch a game or a sports show the old-fashioned way via TV. For them, following snippets on social media or checking score updates on their smartphone apps might be enough.

The NFL also has to address why the ratings sagged during the first half of the season. Are there too many games in primetime? A lack of star power and compelling teams? Are people getting turned off by all the concussions and torn ACLs, with players being carted off the field on a regular basis? How much are they being affected by the cord-cutters and never-weres? Clearly, something more was happening beyond the Colin Kaepernick controversy and people being diverted by the presidential election.

It would be foolish to bet against them given their track records, but both ESPN and NFL face increasingly uncertain futures. They have to come up with answers and new approaches to not only keep pace, but continue to grow.

The aftershocks have jolted the entire industry. For instance, while Big Ten Network president Mark Silverman says his network hasn’t seen an erosion of subscribers, he is closely monitoring the overall situation.

“We’re very aware and plotting a strategy,” Big Ten Network Mark Silverman told me for a story I did for the Chicago Tribune. “Does this continue? Will it accelerate? We have to be prepared for how this evolves.”

If anything, what is occurring with ESPN and the NFL should be a cautionary tale for everyone in sports media. It puts a premium on executives and programmers being extremely nibble and forward-thinking about creating new delivery systems for content. Given what is happening today, it will be an upset if the media landscape isn’t radically different in 2026, if not sooner.

Meanwhile, the Cubs are much closer to being a sure thing in 2017 than ESPN and the NFL. That says it all.