Tuesday, August 20, 2013

Could CBS Sports Network Become Biggest Beneficiary of Fox-ESPN War?

Not too long ago in March, John Ourand of Sports Business Daily reported on the unlikely alliance in sports TV which has formed between ESPN and Fox. 
The amount of collaboration between ESPN and Fox Sports over the past two years has resulted in a partnership that is unprecedented in sports media as the two formerly bitter rivals have united on some of the biggest media rights deals.
A lot of the speculation in the sports industry suggests that the building relationship is a way for ESPN and Fox Sports to keep NBC and its stable of sports channels at bay, more so than CBS, which has not been as aggressive pursuing sports rights. 

Not only did ESPN and Fox bid together for the Pac 12 (which they won) and EPL (which they lost), they've also been long time sub licensing partners and help each other promote the Big 12. Whenever either has too much inventory of a sport which they can't fit into their schedules, they usually sell it to each other. For example, in the past, Fox sublicensed Saturday morning EPL games to ESPN2 and will sub license European World Cup soccer qualifiers to ESPN in 2016.

But a new development was announced today in which ESPN announced that CBS was it's new sub licensing partner for American Athletic Conference (old Big East) hoops and football. Surprisingly, despite negotiations with Fox, ESPN chose to partner with CBS.

Now, Fox and ESPN never had the relationship that CBS and Turner have when it comes to the NCAA Tournament with sharing production costs and talent, but they've done their best to get NBC, CBS and any other threats to steer clear of their sports TV monopoly.

With recent developments and the launch of Fox Sports 1 though, could ESPN be turning away from it's alliance partner? There's been a lot of friction in the social media world with this new rivalry of sorts and ESPNers don't seem to be too happy that Fox is taking shots at them despite the fact that they are competitors. The tone of dialogue coming out of ESPN and the actions which they've recently made seem to conclude that their marriage of convenience with Fox may be over.

ESPN always saw Fox as a foe, but they were a friendly foe to them. They could bid on rights together and give each other extra content they don't need to keep Comcast away from having any leverage when carriage deals are being negotiated and they can keep everyone else from having any chance of being competitive.

In ESPN's perfect world, they would have the rights to every single sports property in existence but they know they don't have the money and space for all those properties. So their strategy has been to take pieces of everything, with other chunks going to Fox. Depending on the property, some chunks are bigger on ESPN than Fox or vice versa but the strategy has worked in keeping NBC away.

Even when FS1 was announced, ESPN welcomed the competition with open arms and didn't fight too hard when talent like Charissa Thompson and Erin Andrews left for Fox, because they knew their friendly foe could provide opportunities for them which they couldn't. But as FS1 began to get aggressive early with talent moves and acquisitions such as the Catholic 7 (new Big East) and the US Open, ESPN seemed to be threatened for the first time in a long time.

A network like CBS doesn't want to make too much noise in the cable sports world because they are OK with the minimal profits coming out of CBSSN. Could ESPN be signaling through this AAC deal that they have found a new alliance partner in CBSSN to exchange extra inventory in sports?

And how does Fox respond? Could Fox end up teaming with CBSSN as well, and selling extra inventory such as extra Catholic 7 games to them? Or will Fox pull a surprising move and draw the lines of the rivalry and sell extra inventory to NBC to make it ESPN/CBS vs. Fox/NBC?

OR.......could I just be looking too much into this and not realize that extra inventory is just extra inventory and whoever has space and is the highest bidder will win no matter what? Who knows?

We'll find out what all this really means when B1G bidding starts. Will ESPN and Fox bid together again and split inventory evenly? Or will ESPN and FOX find new partners (aka CBS/NBC or someone new)? Or will everyone just bid on their own for all the coconuts on the island? And if FOX and ESPN bid on their own and one of them wins, will they sublicense extra content to each other or to someone else.

ESPN's old fantasy of keeping a sports TV monopoly with Fox may be no more.

1 comment:

Permanent4 said...

Why are you assuming that the AAC had no say in the matter? Why would the remnants of the Big East want anything to do with the network that *dismantled* the Big East as we knew it?

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