Editor’s Note: Welcome to a daily column we run here at BroBible breaking down the day’s biggest stories in sports business with commentary from the sports money and sports fanatic perspectives. It comes to us via our friends at JohnWallStreet. You can sign up here for their daily email newsletter.
Disney in Control of the College Football Post-Season
The Walt Disney Company (DIS) owns the college football postseason landscape with ESPN and ABC controlling the broadcast rights to 35 out of the 40 FBS bowl games, including the College Football Playoff semifinals and the National Championship game; CBS (still has Sun Bowl on 12.31) and Fox (still has Redbox Bowl and Holiday Bowl on 12.31) will carry the balance of the games. The network’s dominance isn’t limited to the bowl subdivision either, ESPN (or the online streaming service ESPNWatch) will also broadcast the FCS playoffs for both Division II and Division III, the NAIA championship game and a de facto championship game for HBCU’s. ESPN is airing 34 games over the 17-day period ending on 1.1.19; the National Championship game will be played on January 7th.
Howie Long-Short: The number of bowl games played on an annual basis has more than doubled over the last 40 years (never more than 19 scheduled through the 1980s) with most the growth coming this millennium; just 25 bowl games were scheduled at the completion of the 2000 season. The vast expansion of the college football postseason is simply the result of supply and demand, bowl eligible teams without bowls to play in and a cable television audience that craves football. Need proof? 2.5 million fans tuned in for the 2016 Bahamas Bowl game between a MAC school (Ohio) and a Sun Belt program (Troy). To put that figure in perspective, it’s 800,000 more fans (1.69 million) than ESPN averaged over 18 NBA games during the month of November.
ESPN Events (a division of ESPN) owns and operates 14 of the 35 bowl games it will broadcast this postseason, a 15th will debut next season. The games rarely include high profile teams (they’re all played before 12.29), but in a month where the network lacks an abundance of live sporting events (see: just the NBA and 1 NFL game/week) the bowl games help to fill out the programming calendar and generate meaningful advertising revenue; few networks can draw 1 million+ viewers on weekday afternoon.
While television viewership for bowl games is strong, in-stadium attendance has declined 10 years running (to 40,000) forcing the participating schools to buy up a record $25 million in unsold tickets for the 2017 postseason. Despite the significant bill, there’s no indication that bowl expansion will slow down anytime soon. The NCAA recently approved further expansion to 86 teams (44 games, includes National Championship), meaning nearly 2/3 of FBS teams (total of 129 + 1 in transition) will have the opportunity to play a postseason game come 2020. Of course, $25 million in unsold tickets is a drop in the bucket relative to post-season earnings; schools and conferences split $448 million in profits last year.
ESPN is paying $470 million/year for the 3 college football playoff games. Last season’s championship game drew just shy of 30 million viewers and the semi-final game at the Rose Bowl drew 28.4 million, making them the 2nd and 3rd most watched cable programs of all-time. Those viewership totals are impressive, but on a cost per viewer basis the network is actually paying more for the CFB playoff package than it does for a single NFL wildcard game ($100 million).
For those wondering about the costs of bowl sponsorship, on the low-end ESPN sold title sponsorship to the Bahamas Bowl for $300,000; down from an estimated asking price of $450,000 (went unsold) in 2017. On the high-end, Northwestern Mutual is paying a reported $25 million/year over 6 years to sponsor the Rose Bowl.
Fan Marino: The Dec. 26th First Responder Bowl between Boston College and Boise State was called midway through the 1st quarter amid a 2-hour lightning delay. The bowl’s executive director Brant Ringler said, “the decision was made after lengthy consultation with emergency personnel, both universities, ESPN and Cotton Bowl Stadium staff”, but one must assume the quick decision was aided by ESPN’s ownership of the game. ESPN lacked the broadcast window to re-schedule the game and opted to cut bait before incurring any further expenses; another owner may have insisted the game was played later.
What is JohnWallStreet?
JohnWallStreet, located at the intersection of sports and finance, is a destination for the educated sports fan.
While we won’t be publishing “hot takes” on LeBron’s relative greatness to Jordan, we will be offering up the most relevant sports related business news, in easily digestible bites, with commentary from both the sports money and sports fanatic perspectives.
We’ll cover publicly traded professional teams & stadiums (MSG, RCI, BATRA, MANU), television networks (DIS, FOXA, CMCSA, CBS, TWX, MSGN), apparel & footwear companies (NKE, UAA, ADDYY, FL, LULU), equipment companies (GOLF, ELY, FIT), ticketing companies (EBAY, LYV) content and facilities providers (CHDN, DVD, ISCA,TRK, LMCA). If it trades on Wall Street, and has a sports angle, it’s in our wheel house.
Howie Long-Short and Fan Marino will be providing their expert opinions on each story. They have slightly different areas of expertise. Fan Marino is a firm believer that the SEC is the premier football conference. Howie Long-Short knows it as the Securities & Exchange Commission. Fan Marino lives and dies with the college selection of 5 star, blue chip recruits. Howie Long-Short spends his days analyzing blue chip stocks. Howie Long-Short knows that Black Monday occurred on October 19th, 1987. Fan Marino swears it happens every January after Week 17. You get the point.