The sports media business is a lucrative one. We know that. Of course over the years, especially via sports, we have become desensitized the incredibly large dollar figures (read: Alex Rodriguez's contract). Media, namely TV rights deals, have had the same effect of late. Look no further than ESPN's vast portfolio:
Property - Annual Payment From ESPN
NFL Monday Night Football - $1.9 Billion
MLB - $700 Million
NBA - $930 Million (TNT shares some of the cost)
US Open (Tennis) - $75 Million
Big East - $18 Million
ACC - $100 Million
Big Ten - $260 Million
Mountain West - $18 Million
Big 12/PAC 12 - $450 Million (split with FOX)
Orange Bowl - $55 Million
Sugar Bowl - $80 Million
Rose Bowl - $80 Million
If you cannot do math, I assure you that it is a ton of money. And with a reported $125 million new studio in the works, money in Bristol, Conn. seems to be, well, endless. ESPN is also in the process of creating an entire network for the SEC, so even though there are no numbers on cost floating around the Internet, we can be sure that ESPN will be going all in on the project (their recent hire of Paul Finebaum is an indication of this).
The expenses are adding up, and that's not to say that ESPN is becoming financially unstable. Earlier this month, Disney's (ESPN's parent company) stock hit an all-time high. And with the television ratings for sporting events the closest thing to a sure thing in media right now, advertising will likely see a steady increase as well.
But you have to wonder, how long can this go on? The sports media rights bubble will eventually burst. It's inevitable. But when?
Last week, ESPN announced that they would be laying off between 300 and 400 employees. Certainly not a great sign of things to come. The pressure is certainly felt in Bristol. Whether it is from the Disney stakeholders, the competition of NBC Sports and the upcoming Fox Sports 1, cable subscribers pushing back against rising costs, advertisers becoming increasingly cash strapped, or what have you, the pressure is unquestionably there. Nothing is forever.
The point is not to say that the pin is within an inch of the balloon, just that it is coming. As more viewing options become available and crowds further disperse to different viewing experiences, the days of rights fees reaching nearly $2 billion annually may be closing in on us.
The question is, "when?"
Follow Kevin Rossi on Twitter @kevin_rossi.
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