Back in July, we discussed the major changes on the horizon for college sports. After years of getting fat on TV contracts from networks like ESPN, Fox and CBS, it appears a course-correction is coming — and one that may not be as lucrative at all to the NCAA’s major conferences and biggest athletic programs.
That all sounds foreboding, but there’s still potential ways for this to work out well for the schools that depend so much on broadcast revenue to keep athletics afloat. Ironically, the biggest life raft could end up being provided by ESPN (the same network that forked over the money in the first place to fuel a bubble around broadcast rights deals).
KU announces a change to its Jayhawk Network. All games will be available on ESPN+ now (a $5/month subscription service). Seems like a much better setup compared to the past, when some folks used to be blacked out from games in the state of Kansas.
— Jesse Newell (@jessenewell) August 23, 2018
On Thursday, Kansas announced that its network for third-tier inventory, the Jayhawk Network, would move to ESPN+ (the $4.99 per month stream-only service that launched earlier this year). The Jayhawk Network had previously been an over-the-air service in the state of Kansas, as well as a streaming option — but one that could be subject to local blackout rules. Now, that’s no longer the case as the ESPN+ affiliation makes for a national reach for the network’s non-revenue sports broadcasts and select football (one game per year) and men’s basketball games (six per year) as well.
At this point, a very quick primer for the uninitiated: As of August 2019, the Big 12 — of which, Kansas is a member — will be the only one of the Power Five conferences in college sports without a dedicated network. The ACC Network (owned by ESPN) will launch next year, while the Big Ten (with Fox), Pac-12 (solo) and SEC (ESPN) have operated their own networks for some time. Texas, another Big 12 member, has its own deal with ESPN for the Longhorn Network, and its existence is the primary reason why the Big 12 does not yet have its own channel (nor will it in the near future) for third-tier programming.
Because of that dynamic, Big 12 members own their own third-tier rights and are free to create their own networks and/or shop them around as they choose. Kansas, while struggling in football for the last decade, has one of the most nationally-relevant men’s basketball programs, so their network remains in-demand. Oklahoma, whose football team regularly contends for Big 12 titles, earns $7 million per year for its regional Fox affiliation alone.
Kansas had its own deal with ESPN streaming on top of the local broadcast rights, but this is likely the roadmap of how those types of deals evolve over time. When ESPN+ launched, ESPN mentioned a ton of sports headed to the additional paid service, and plus some college conferences as well within that list. With teams like Kansas joining that fray on their own, it sets in motion the next step for how schools continue to make money off of broadcast rights (and ESPN stays as relevant in that space, even in a shift to a la carte programming).
Long-term, this could also show the early details of how college sports moves toward even more specialized programming, by using the targeting and audience segmentation tools that addressable OTT provides. Companies like supply-side platform (SSP) Beachfront and others are able to work with the Apple TV, Roku and Fire TVs of the world to better I.D. audiences and determine which teams are truly driving value for ESPN and other broadcast partners.
In the 1980s, college football teams and conferences negotiated TV deals with a national contract. Oklahoma and Georgia changed all of that with a lawsuit against the NCAA, opening up individual teams and conferences to negotiate their own deals. At that same time, a fledgling network ESPN was still working to establish itself and accumulate valuable inventory. Conference sizes grew, payouts came along with them… now, we may see teams get even more value in self-determination similar to what Texas has in the Longhorn Network and Notre Dame has with its NBC contract. BYU also has an independent contract with ESPN, as does Boise State despite being a member of the Mountain West Conference. Kansas, for its part, becomes the first to partner with ESPN+ and the test subject for what comes next.
As more schools go that route, ESPN will be able to use ESPN+ to determine who’s watching which teams and who’s willing to pay to watch which teams on the additional service. We already have a good idea of which get national audiences excited through linear broadcast — they’re the same teams that get the primetime start times on ABC and ESPN every weekend. But this tests dedicated audiences on a niche level, seeing if fans of individual schools will pay. And more importantly, though: will they watch and will that audience provide value in the big scheme of ESPN’s growing ESPN+ inventory and how it relates to advertisers?
This storyline is far from the forefront with the 2018 college football season beginning in a matter of days. Still, it’s an intriguing narrative to keep an eye on as the dynamics around ESPN’s enormous collection of live sports inventory continues to adjust its delivery method.