Sweet Home Alabama
Hey,
You have to tip your hat to how ESPN has been the dominant figure in sports coverage for nearly 40 straight years. From the struggle to get ESPN into households, to ESPN being in over 90% of households with cable television, to surviving the recent cord-cutting phenomenon, it seems like ESPN is always one step ahead of its competitors. ESPN seems to have left behind anything that’s not either sports talk television or actual live broadcasts — sorry Stump The Schwab fans — and has even taken the step to partner with individual universities or conferences for broadcast rights. This started with the Texas Longhorns Network, the ACC Network, and most importantly the SEC Network.
SEC Network is a cable channel under the ESPN umbrella that broadcasts games from every sport from the Southeastern Conference. Currently they have exclusive rights for every sport, but they’ve had to share SEC football with CBS which had negotiated a prior deal with the conference. News broke late last year that the SEC and ESPN had reached a deal to move away from CBS starting in 2024 which sees The Walt Disney Company, ESPN’s parent company, offer the SEC triple what it was making from CBS.
Before I go any further, I need to break down how companies like Disney make money off of networks like ESPN. Television networks reach agreements to be included in cable television packages, and a large part of that agreement is how much they are paid per subscriber. For example, if you have ESPN as part of your cable package, ESPN receives $4 of your monthly cable bill as a subscriber. In some instances deals can’t be reached, similar to Fox Sports regional networks, and they are removed from the cable television packages and replaced with alternatives for how to watch the channel. The next step is the networks then acquire or create content to air to their viewers. In the case of sports networks, they reach agreements with the sports leagues themselves where the network pays the league for the rights to broadcast their games, coverage, highlights, etc. After buying these rights, the networks then broadcast these games and sell advertising rights in order to turn their content investment into a profitable endeavor. The more desirable the content that you’re airing the more the network can charge companies for advertising.
If you’re ESPN and you’re spending billions of dollars on broadcast rights for every sport on the planet, you need these sporting events to draw as many viewers as possible to make your channel both worth $4 a subscriber but also valuable to advertisers targeting the male demographic. If you’re the sports league, you want to draw as many viewers as possible to increase your league’s value for the next round of broadcast negotiations with the networks. Both of those things line up in a situation where the network and the league are both incentivized to draw as many viewers as possible by any means necessary, which is part of why sports today have become so melodramatic but I’ve digressed.
It makes it easier to draw viewers and advertisers if you’re able to promote big games with high stakes. Collegiate sports use the unique method of ranking the teams in each sport, making it easier to identify such marquee matchups. Therefore, it seems somewhat of a no-brainer that ESPN would want the highest ranked teams to be part of the ACC or SEC. There have been numerous allegations tossed at ESPN of showing favoritism towards teams from these conferences, but I think the true conflict of interest emerges from how the network chooses to cover — or ignore — negative stories surrounding these schools when they emerge.
There was a falling out between legendary college basketball commentator Dick Vitale and LSU men’s head coach Will Wade regarding the ESPN coverage of an ongoing investigation into Wade and the LSU program for recruiting violations. In the documentary “The Scheme” Wade’s audio was recorded from a phone conversation where he explicitly states he’s going to pay to land players at his program. Not only was Wade not fired, but LSU is in the NCAA tournament as we speak.
There’s also the situation surrounding Alabama football head coach Nick Saban receiving over $5M in PPP loans for the four car dealerships that he co-owns with a business partner. Forget the fact that Alabama’s boosters paid off Saban’s mortgage for his home, or that Saban signed a contract extension in 2018 to make him the sport’s highest paid coach at over $8M a season, or why Saban needs to own four car dealerships, or why every star Alabama player ends up with a brand new car. I’d only like to focus on why none of this is getting coverage on ESPN. Its counterproductive to air negative coverage regarding your largest cash cow and Disney and ESPN know this. With ESPN engaging in more and more sports deals for larger sums of money, this conflict of interest will only get worse.
That’s how you become the worldwide leader in sports.
If you are enjoying this newsletter, please pass it on to a friend (or three) and tell them to sign up here.
