Atlanta Braves New Stadium to Protect Future Revenue Streams

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Apr 4, 2014; Denver, CO, USA; Fans wait to buy tickets before the opening day baseball game between the Colorado Rockies and the Arizona Diamondbacks at Coors Field. Mandatory Credit: Chris Humphreys-USA TODAY Sports

Sports Money Has Limits

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There’s a very interesting piece posted by Clay Travis at Fox Sports last week that demands a follow-up. In it, he details a curious phenomenon that’s going on right now in the television industry, and how it is going to profoundly impact the Worldwide Leader in Sports.

Turns out that there is most probably some future fallout for major professional sports as well.

The full article is fascinating and I do recommend that you take the time to digest it, but here’s the Executive Summary:

ESPN is the 800-lbs. gorilla in the TV industry, garnering $6.61 from each and every satellite/cable subscriber on earth… which nets them $7.5 billion annually. Nobody else is even close to that (TNT gets $1.65 each for 2nd place). For now.
ESPN’s contracts for live sports add up to something around $6 billion. Every year.
Lots of people don’t actually watch sports. They watch movies. Cheaper services such as Netflix, Amazon Prime, Hulu, etc., are leading these people end their pay-TV subscriptions.
In the past 4 years, ESPN has lost 7.2 million subscribers (and so has the industry at large). That’s a loss of revenue totaling $47.5 million since 2011, and it’s really only the first wave. This figure doesn’t count reduced ad revenues, which are based on subscriber levels.

You could be thinking “Well, this is just a Fox Sports guy picking on a rival… a relative minnow nipping at a shark,” but the news is backed up both by the numbers and the recent news:

"“There are major cost-cutting measures underway at ESPN. And it should make everyone — yes, everyone: sports leagues, cable companies, advertisers, ESPN employees — nervous. According to a report from The Hollywood Reporter, the so-called “Worldwide Leader in Sports,” is currently looking to cut $100 million from its 2016 budget and $250 million from 2017.”"

The First moves? Keith Olbermann, Bill Simmons, and Colin Cowherd are all gone. Now of course, these guys didn’t make $250 million… or even $100 million, but you get the idea. Walt Disney (the parent company) is clearly reading the tea leaves and forecasting a rocky future.

Next: Are Baseball Revenues in Trouble?

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