The report seemed innocuous, a throwaway piece on a forgettable day. But the idea that Disney will market its $4 billion acquisition on ESPN2 hinted at the bridging of the ever-shrinking gap between sports and entertainment.
The younger-skewing Sportsnation aired a primetime Star Wars Halloween special on Thursday, October 30, featuring a custom set, special guests and almost assuredly stale jokes. The special isn’t noteworthy in and of itself — of all of ESPN’s studio shows, Sportsnation would be a suitable fit for this type of stunt promotion — but it signals that Disney executives see ESPN as a viable medium for both sports and entertainment. This isn’t new, given that the “E” in ESPN literally stands for entertainment, but the network has primarily stuck to exploiting the entertaining aspects of sports, rather than other on-screen titillation.
Much has been made about the idea of cord-cutting, or those that cancel their cable television service and instead opt for streaming video services such as Netflix and Hulu. With cable subscriptions running upwards of $100 alone for 100+ channels — many of which consumers don’t want and don’t watch — it’s easy to see why people would opt for $8 per month rather than $100 for all of their television needs. The phenomenon has gained traction, enough so that CBS has opted to create its own streaming video service, while HBO has co-opted the Netflix model after years of experimenting with the idea. Networks don’t want to be behind the times and miss out on lucrative advertising revenue and subscription fees, especially if their negotiating power with cable providers will likely decrease.
ESPN has employed its own streaming service, the Watch ESPN app. The network, in partnership with parent corporation Disney, began broadcasting games unavailable on cable television, but has since expanded to currently-airing college football and basketball games, so long as the viewer has a cable service that has agreed to partner with ESPN for the app. Given the network’s substantial revenue and market share, it’s had the luxury of experimenting with technological advancements before they become mainstream. The risks haven’t always been worth the rewards — see the ESPN-branded Samsung phone fiasco in 2006 — but the network has been willing to innovate when the opportunities arise.
While the Worldwide Leader has a stranglehold on the sports landscape, the slow disintegration of cable television has left many of the remaining users dissecting where their cable dollars actually go. And most have come to realize how much ESPN is driving the cost of cable television, even though few actually watch the channel.
ESPN commands a subscriber fee of $5.54 (as of early 2014), which is the amount cable providers must pay ESPN to host their channel in their television offerings. This fee is easily the highest of all channels, mostly because of what ESPN represents. It has acted as the de facto gatekeepers of the sports industry. No other channel has anywhere close to the broadcast rights that ESPN holds, from the NFL to the MLB, the NBA, college athletics and the rights to show highlights for all of the above (in addition to the sports it doesn’t currently hold). Other conglomerates have tried to enter the fray — from NBC (which ones the NHL rights) to Fox, whose Fox Sports 1 hasn’t gained traction outside of its live sports, which would’ve rated even higher on the parent network — but ESPN remains the dominant force.
However, while live sports represent one of the few remaining “appointment viewing” options, its share of the television market is quite small. Approximately between 10% and 20% of the United States watch live sporting events, meaning that most cable subscribers are subsidizing their sports-loving counterparts’ most important vices. Sports fans should be thankful that AMC hasn’t released a standalone app for people to watch The Walking Dead in real time yet.
ESPN surely knows that people have become more leery of paying for things they don’t want and don’t use, just as it knows that the idea of the cable bundle could theoretically disappear in a split second if federal legislators were able to agree about anything. Senator John McCain has been more aggressive about pushing a la carte programming, giving people more power to choose, even if it may result in similarly high prices for a smaller set of viewing options.
It’s not hard to see how the uncoupling would hurt ESPN. According to SNL Kagan, approximately 100 million (+/- 1 million) subscribe to cable or satellite television in the US. That means that ESPN rakes in more than $550 million from cable and satellite providers alone. Per month. That’s nearly $7 billion in annual revenue because a minority of people want to watch sports. Imagine if people aren’t required to pay for others’ ability to watch ESPN.
ESPN certainly won’t lobby for a la carte programming — it’s actually extensively lobbied against it — but it must prepare for that potential future. ESPN, in conjunction with Turner, negotiated extending the NBA television rights deal for a combined $24 billion over nine years, with ESPN likely contributing at least $1.5 billion annually. ESPN guarantees that it will remain a major home of the NBA — whose popularity is growing in the US and around the world — and blocks out competitors such as Fox and NBC from entering the basketball market. In addition, it helps ESPN remain an in-demand channel, even though the new deal will send subscriber fees even higher.
But if ESPN wants to continue the illusion that cable television is essential, it must continue to provide ancillary programming that keeps people on the network’s bevy of channels. Fox Sports 1 has attempted to brand itself as a “fun” and “jocktacular” and “bro-central” network, though this very post may be seen by more people than any of their non-live programming. ESPN, on the other hand, has found success with Outside the Lines, Around the Horn, Pardon the Interruption and the aforementioned Sportsnation. These shows engage the audience and target various demographics without relying on the thrill of live television. Network executives have realized that they can build stars who can carry programs, rather than just sports.
It’s this idea that should force ESPN to experiment further with bridging the ever-shrinking gap between sports fans and entertainment fans. ESPN has tried to develop both scripted and reality television in the past, but it’s always been centered around sports. There was Playmakers, a forward-thinking scripted drama that showed a fictional NFL in such a brutal light that the network eventually cancelled the series (presumably after the league inflicted some pressure against one of its most important rights holders). Dream Job was ESPN’s foray into pulling back the curtain on how SportsCenter gets made back in 2004, though the network has been reluctant to produce a similar type of show since.
In order to justify the rising subscriber fees (and its extremely important commercial sales to advertisers), ESPN should want to not only entice new sports fans, but also movie and television and music fans as well. And ESPN has the perfect weapon to do this.
Much has been made about Bill Simmons, probably more than is justified. The 45-year old Boston nationalist has grown to prominence on his ability to blend sports and entertainment into a cohesive and “common man” persona. As part of his most recent contract negotiations with ESPN, Simmons was given the luxury of creating Grantland, the supposed high-brow, longform, [insert buzzword here], sports and pop culture website that brought most forms of entertainment under one URL. While the site’s metrics are closely guarded, Grantland has spiked in traffic and has become a popular destination for both men and women, shattering preconceived notions of what an ESPN-backed website would and should be.
Simmons’ contract is set to expire next year, leading many to speculate that he may opt to leave ESPN after he was suspended for three weeks this past September. While ESPN offers an institutional and economic advantage, Simmons may opt to head out on his own or he could sign with a rival network (Fox has been one speculated landing). ESPN has claimed that it wants to keep Simmons despite the public bickering — even if Grantland loses the company money, Simmons’ other contributions like the 30 for 30 sports documentary series and his work on NBA telecasts suggest the network is clearly better off with him. Perhaps it could solve its cable television and Simmons issues with one bold plan?
The Grantland Basketball Hour premiered on October 23, with Simmons and Jalen Rose talking to guests about the upcoming NBA season. It was loose — neither wore ties and Rose was allowed to hold a baseball bat a la Brad Pitt in Inglorious Basterds — informative and just as cheesy as one would expect coming from a 45-year old manchild who still roots for the Boston Celtics by fist pumping on live television. But it was quality programming that was likely quite cheap to produce. It relied on nothing more five men talking about basketball. Well, there were graphics, but those can (hopefully) go away quite easily.
There will be future installments — it seems like the plan is to run them monthly — with new guests and hopefully more weapons for Rose, but there are no plans to go beyond this season (yet). But it’s not inconceivable that as part of Simmons’ new contract, he gets to extend his footprint to his own television channel, the Grantland Network.
The premise is simple: rely on Grantland.com’s arsenal of writers to create and star in inexpensive, informative programming about both sports and pop culture. The website already features a number of podcasts hosted by its journalists, why not simply record those tapings and broadcast them hours later? There could be programming blocks built around the NFL, NBA, MLB and NHL, in addition to those featuring broadcast dramas, The Walking Dead, HBO programming and The Oscars. Realistically, the network likely needs to program for 60 hours per week — it could simulcast episodes of SportsCenter or PTI and Around the Horn, in addition to utilizing Disney’s film catalog to air “Simmons’ Faves” such as The Shawshank Redemption or 20 minutes of Boogie Nights.
The opportunities to attract new audiences are endless. Grantland writers such as Molly Lambert and Wesley Morris would provide much-needed professional opinions about television and film, respectively from viewpoints not seen frequently on television (especially ESPN). Grantland’s success is that it’s a platform for quality writers that have cultivated their own popularity through their work. It’s the model Monday Morning QB (MMQB) and FiveThirtyEight have followed, for better or worse, building on the so-called “brand” of their leader.
It’s been argued here before that Simmons has been somewhat hurt by Grantland’s success as a quality website, given that his bloviating and desire to be on the fringes make him appear somewhat less knowledgeable than his online costars. Zach Lowe knows endless amounts more about the NBA than Simmons, just as Jonah Keri knows more about Major League Baseball. Giving these individuals a continuous platform to test and discuss ideas would likely lead to their rise in prominence, which would make Grantland look even better by comparison.
Creating a television network wouldn’t be easy — the first few months would be brutal and there’s no guarantee that a network devoid of both scripted television and live events would attract viewers — but the costs would be extremely low and it’d likely help keep Simmons at ESPN. Eventually people will refuse to pay almost $6 per month for ESPN, but a Grantland channel might prolong what appears to be the inevitable decline of cable television.