The Sports TV Bubble Shows Signs of Weakness

The big question(s): Does the lower than the expected sale price for the RSNs signal a slow down in the growth for sports media rights? And if so, then what impact will that have on overall economics for sports?

Actual vs. projected sale price for Fox RSNs (% difference):
1)
Projected — $16–20B
2)
Actual — $14B (↓ 12–30%)

Flashback: Can a New President and Streaming Service Help ESPN Win Again?

ESPN subscribers by year (% change):
1) 2010–100M
2) 2018–89M (↓ 12%)


ESPN monthly subscriber fee by year (% change):
1)
2010 — $4.75
2) 2018 — $8.10 (↑ 71%)


Quick math on ESPN subscriber/revenue changes between 2010 and 2018:
1) Subscribers — ↓ 11.5M
2)
Monthly subscriber cost — ↑ $3.36
3) Annual subscriber revenue — ↑ $2.9B

How ESPN makes money (% of total):
1) Subscriber fees — $9.5B (79%)
2) Advertising — $2.6B (21%)

Questions for the sports world:
1) How will owners react when TV money starts to fall?
2) How will GMs react when payrolls need to shrink?
3) How will players react when their contracts are smaller?

Moneyball vs. media dollars: Mike Trout recently signed the richest contract in baseball history ($430M), but if we adjusted past contracts for inflation he would rank a distant 4th behind the 2001 Alex Rodriguez contract at $592M!


Top 10 MLB contracts (unadjusted for inflation) according to FanGraphs:
1) Mike Trout (2019) — $430M ($35.8M)
2) Giancarlo Stanton (2015) — $325M ($25.0M)
3) Alex Rodriguez (2008) — $275M ($27.5M)
4) Alex Rodriguez (2001) — $252M ($25.2M)
5) Miguel Cabrera (2016) — $248M ($31.0M)
6) Albert Pujols (2012) — $240M ($24.0M)
7) Robinson Cano (2014) — $240M ($24.0M)
8) Joey Votto (2014) — $225M ($22.5M)
9) David Price (2016) — $217M ($31.0M)
10) Clayton Kershaw (2014) — $215M ($30.7M)

Top 10 MLB contracts adjusted for inflation (annual value):
1) Alex Rodriguez (2001) — $592M ($59.2M)
2) Alex Rodriguez (2008) — $448M ($44.8M)
3) Derek Jeter (2001) — $444M ($44.4M)
4) Mike Trout (2019) — $430M ($35.8M)
5) Giancarlo Stanton (2015) — $393M ($30.3M)
6) Manny Ramirez (2001) — $376M ($47.0M)
7) Albert Pujols (2012) — $358M ($35.8M)
8) Ken Griffey, Jr. (2000) — $330M ($36.6M)
9) Prince Fielder (2012) — $319M ($35.4M)
10) Robinson Cano (2014) — $310M ($31M)

More #1: DAZN vs. ESPN: Loaded With A-List Athletes — Canelo, Ronaldo, LeBron — The Billionaire-Backed Streaming Site Wants To Be The Worldwide Leader In Sports

More #2: BallerTV Takes Over Youth Sports Broadcasting One Game at a Time

More #3: Network TV can’t survive without the NFL

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