The End of ESPN and Unintended Consequences

Bumped into this article on Karl Denninger's blog -- a political and economic blog I rarely agree with, but at least interests me as reconnaissance of the enemy or somesuch.

This Dave Maney post from Sunday morning at The Daily Beast basically says the whole she-bang of sports is about to implode, and TV and cable are where it starts.

It begins with everything we know going on at ESPN:  The talent reduction, Grantland going poof, and Disney's stock price taking a hit from a seven-million subscriber dip over the last two years -- which was in a required filing by ESPN and Disney to the Securities and Exchange Commission.

Then it basically goes into ESPN's history and what it has been able to do as the centerpiece of American sports for the last 30-40 years...

... so much so that Leo Hindery of Intermedia Partners told Bloomberg that every cable subscriber (sports fan or not) pays $35 to $40 A MONTH on sports channels:  ESPN, Comcast, FOX, all the regionals, etc. 

Think of that:  $400-500 a year just to the sports networks, and you're paying for that even if you don't watch the sports...

When that goes down, it could take the entire non-NFL fabric of sports right down with it:  It is already being estimated in some circles that television money will be the highest source of sports revenue for sports franchises within three years.

It's almost certainly true in Major League Baseball already, where a great television contract can cause teams to spend through the nose, should their owner elect to do so.

So what happens when this all blows up:

• MLB probably heads into the serious contraction the 1994 strike should've forced in the first place.
• NHL, the same after the lockouts.
• NBA?  Well, the Clippers won't be worth $2 billion...
• The NFL has Religion Status anyway.

But the thing is the current model is unsustainable:  One economist, when proposed with a solution for Disney's woes of separating ESPN into it's own service "over the top", estimated that ESPN would have to, alone, sell for $36 a month just to justify it.

But one thing is for sure:  If Maney is correct, you're going to see the end of a lot of teams when this all blows up, and maybe even a league or two.