People find it easier and easier to do without sports as time goes on, and the sports industry will find it harder and harder to get those people back. From the Zman at theburningplatform.com:
Last week, the Wisconsin athletic director sent out a letter to supporters that the university would lose 60-70 million dollars this year due to the reduction in football games being played in the fall. If the season is cancelled, the losses will top 100 million just for the fall. That may be an exaggeration, but there is no question that a cancellation of the college football season will cost the big-time college programs tens of millions in revenue. It is a billion-dollar industry.
ZeroHedge pointed out that ESPN has a billion dollars in ad space to sell for this fall’s college football season. They also have ad space for other sports as well, but college football is the prime mover of ad space. It is unlikely that ad buyers will want to buy ads when ESPN is running replays of card games this fall. ESPN’s primary income stream is mandatory cable fees, they net close to nine billion in fees every year, but a billion dollars in ad revenue still counts for something.
Of course, everyone knows no one is watching ESPN at the moment, but that has no impact on the cable fees. The way it works is a service like Hulu of Comcast pays ESPN nine dollars per month for each subscriber to their service. These deals are not contingent on viewership. As ZeroHedge points out, the language in these deals does not require the content provider to deliver particular content. As long as ESPN is beaming something, they get paid for it.
