Synergy. Cord Cutting. Content Providers. Distributors. Skinny Bundles. Net Neutrality.
Buzzwords helping to explain where media might be taking sports (and us) for a ride in the Brave New World of TV/Internet.
Words that every Power 5 Conference Athletics Director need to have at the ready for the next 5 or 10 years.
Forget about the chaos churning at DKR, the AD chair is where you need a visionary with a sharpened sense of what is needed to keep Texas at the forefront of collegiate athletics.
Two recent developments dramatically point to the need for a calm, self-assured director who can see farther than next year’s home schedule.
What’s that you say? Texas has an AD?
Yes, and I happen to think that Mike Perrin has done excellent job in a lot of areas, such as calming the waters after the short-lived and disastrous Steve Patterson Era. He has helped navigate Texas through negotiations with Nike that produced, at the time, the richest apparel deal for any University. He has given his coaches full support. But Mike is also 70, and is working without a formal contract.
Perrin, who played under Darrell Royal and was a successful trial lawyer has a “mutual agreement” formed with UT President Greg Fenves through emails. It calls for Perrin to serve through the 2017-18 academic year at an annual salary of $750,000.
While Texas announced him as the “permanent” AD, there is no formal written agreement. UT would not owe Perrin any kind of buyout, should he decide to retire or the school decides it is time to search for another AD.
Two major stories broke last week that will help to set in motion yet another “media distribution revolution,” that will unfold in the near future, stories that will have a real effect on college football.
Nielsen is ready to measure out-of-home viewing for national clients. That sound you heard was the champagne corks popping in Bristol, Connecticut. Now all those bars, restaurants, hotels and health clubs with their TV’s tuned to ESPN will begin to be counted. The service will begin in 2017, and it will include 44 markets to project out-of-home viewing in over half of the U.S. As ESPN continues to bleed customers who are “cutting the cord,” by dropping cable or satellite service, getting a read on the viewing audience outside the home will be invaluable in recouping some of the financial hit.
Then AT&T agreed to write a check for $85 billion to acquire Time-Warner. The telecommunications giant has decided to fully commit to being a content provider. AT&T purchased DirecTV last year and now will have content from Time-Warner such as HBO, TBS and TNT. That means sports like the NCAA tournament and the NBA are now part of the AT&T family. Not only will they promote then on DirecTV and AT&T U-Verse, they will also gain the revenue produced by selling the stations to other distributors.
The merger will also make AT&T a major player in the purchasing of media rights for sports. They will be a major bidder for NFL Monday Night Football in 2021, which they could take away from ESPN and put on Turner Sports. AT&T also now has attractive programming for its new streaming service, DirecTV Now.
Telecom providers have wanted to dig deeply into the content part of the business. The marriage of distribution and content helps to increase the appeal not only of AT&T U-Verse but also their smartphones, I-pads and broadband Internet.
Everyone is looking for such a marriage. Disney, the parent company to ESPN, was among the Time-Warner suitors when it became known that it was up for sale.
Google and Apple are both heavily invested in gathering content and distributing it to their customer. Apple has been trying to put together several of the “Skinny Bundles” of channels (a skinny bundle is simply a smaller channel package that offers only the “good stuff” to specific audiences, i.e. all sports, all movies, all news, etc.)
Apple would love to produce a service that tied in with a Netflix or Hulu along with ESPN, for instance.
Google meanwhile recently purchased YouTube and will soon have a streaming channel called “YouTube Unplugged.” Google also agreed to a contract with CBS to make them a content partner. The Google/YouTube streaming video service is expected to be online sometime in early 2017, offering customers access to their channels for a set price of somewhere between $25-$40.
Disney sits with an historical vault of movies and TV shows along with present day channels that include the family of ESPN networks as well as the SEC and Longhorn Networks. Maybe Disney merges with Netflix. Maybe Disney merges with Apple. Maybe Disney merges with Google. Maybe Disney bundles all its content – including sports – into one streaming video provider. Maybe...
The point is, no matter what happens with content distribution, live action, especially live sports will continue to be a top draw for audiences, advertisers, content providers and distributors. This changing landscape is a major reason as to why I believe those who mock the Pac 12 for its weak payout on its channels need to wait a few more years. Content is king, and the members of the Pac 12 own their content outright. If the market becomes companies offering a combination of live TV/video streaming, the Pac 12 will be an attractive buy.
Meanwhile Texas languishes in the weakest of the Power 5 conferences, at least when it comes to creating future revenue streams. The College Football Play Off is still going through its shakedown phase. Who knows how many teams will be included in the play off in the next decade, or how many content providers will be bidding for the sport.
I have said this before and I say it again. If anyone tells you that they know with any kind of certainty as to how you will be watching college football in the future, and how much you will pay for the privilege, they are either a liar or a fool
I am confident that the new Texas AD won’t be either of those, but it would be nice if he is ready to adapt to whatever the future brings.