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Why WWE's Network TV Deal Could Signal a Way Forward for College Football

As the demand for scripted entertainment continues to shift to streaming services, college football might find that the best ratings play for live sports is to head back to the networks.

We laughed last year when those wacky millennials were shocked at the legality of buying antennas that allowed them to receive—gasp—broadcast television signals for free. But perhaps we should have begun extrapolating.

If we had, then the deal Fox reached this week with the WWE might not seem so surprising. The network will pay a reported $200 million a year for five years to broadcast on Fridays what the NBC Universal-owned USA Network has been broadcasting on Tuesdays. That’s $200 million for 104 hours a year of live SmackDown programming that fans love to watch communally. Those broadcasts averaged 2.6 million viewers a week on cable. Presumably, that number will rise because of the wider reach of the broadcast network. It’s quite a haul for the WWE, which stands to get a similar or larger number for Monday Night Raw and which sells its biggest events on a pay-per-view basis and through its own over-the-top network that is available to customers on a streaming basis.

If any of this sounds somewhat familiar to college football fans, it should. This isn’t all that different from how a Power 5 conference sells its media rights, and it might offer a window into where the money for big-time college sports could be coming from in the future.

As ESPN, the chief buyer of college sports rights, has lost subscribers due to cord cutting, athletic directors, coaches and fans across the country have wondered whether the gravy train that has reshaped and enriched the most powerful conferences will come to a screeching halt. The conference commissioners, who are the most directly involved in the negotiations for these rights, don’t seem nearly as worried. Earlier this month, Pac-12 commissioner Larry Scott said he remained optimistic that rights fees would not go flat. When the Big Ten announced a six-year, $2.6 billion deal for its best football games with Fox and ESPN last year, commissioner Jim Delany sounded confident someone would either match or raise the price the next time around. The rumored “rights bubble” is starting to look more like a trampoline. “The value of premium live sports is going to continue to go up,” says Chris Bevilacqua, a co-founder of CSTV (now CBS College Sports) who now works as a consultant advising leagues on media rights deals.

Technology is changing so fast and media companies are morphing at such a rate that it’s difficult to predict exactly what the landscape will look like when the Big Ten’s best games go on sale again after the 2022 season or when the package of SEC games that airs on CBS goes on sale after the 2024 season. The Pac-12’s current deals expire after the 2023–24 school year, and the Big 12’s current deals expire after the 2024–25 school year. But what we’re seeing now might offer a clue. Perhaps it isn’t a streaming service like Netflix or Hulu that will bankroll the next generation of college football. It could be the same channels your grandfather watched using a tiny black-and-white TV with rabbit ears.

Let’s list some things we know to be true.

• The DVR and on-demand services such as Netflix and Amazon Prime have significantly eroded the number of people who watch scripted entertainment live. As this number continues to decline, sports—which most people will only watch live—become more important every year as an advertising delivery vehicle. Sports guarantee a captive audience.

• Broadcast networks rely far more on advertising revenue than their cable counterparts, which rely more on subscription fees. (Broadcast networks also receive a retransmission fee from cable and satellite operators, and like ESPN has, those broadcast networks can use live sports as leverage when negotiating those fees.) Live sports grow more attractive to advertisers by the day.

• NBC has the top-rated show on television (the Sunday night NFL package) with a sports property. Fox is scrapping reality and scripted shows on Friday in favor of live professional wrestling, which may have scripted results but is consumed exactly like unscripted sports broadcasts.

Now let’s list some things we think will happen.

As states begin to legalize sports wagering in the wake of last week’s Supreme Court ruling, more people will watch live sports because they have action on the games.

• More people will cut the cord. Perhaps they’ll buy a skinny bundle such as Dish Network’s Sling TV or YouTube TV. If they have Sling TV, which has a basic package that costs $20 a month, they now can buy a $120 antenna that will grab broadcast signals from the air and make them available on the Sling apps on every device in a user’s home. Given the price and availability of this technology, it stands to reason that the trend will continue and far more people will have access to broadcast television than cable television—which will continue to appeal to hardcore viewers.

This all seems to suggest that broadcast networks NBC, CBS and Fox may be even more interested in college sports than they already were. Meanwhile, ESPN will continue to attempt to dominate the sport. (And games purchased by ESPN are actually being purchased by Disney, which also runs games on ABC using ESPN personnel and branding.) The Big Ten, Pac-12 and SEC could use their own cable networks as leverage as well by threatening to put the best games on those networks and demanding a higher subscription fee. (The ACC, which will launch its own network next year, won’t have this option because all its rights are owned by Disney/ESPN until 2036.) If even one streaming service such as Amazon Prime or YouTube Red decided to jump into the fray, the bidding could be frenzied. Dean Jordan, who has helped the ACC launch its channel with ESPN and who has worked with the Big Ten and College Football Playoff on media rights deals, believes the competition for rights could be fairly diverse in the next round.

“Your rights are worth whatever someone is willing to pay for them,” said Jordan, the managing executive for global sports media rights at the Wasserman Group. “Obviously with more platforms programming sports, the odds of having more than one interested in bidding on a package of content significantly increases.”

The Big Ten is getting an average of $433 million a year from Fox and ESPN for a bucket of between 51 and 54 games. Depending on the matchup, the kickoff time and the network, these games can draw anywhere from about 500,000 viewers (a noon Maryland-Minnesota game on Fox Sports 1) to 12.9 million viewers (the Big Ten Championship between Wisconsin and Ohio State on Fox). WWE’s SmackDown may be more consistent—it runs 52 weeks a year—but good college football games draw a higher rating usually and a much higher rating occasionally. So it stands to reason that the Pac-12, which currently receives $250 million a year from Fox and ESPN for a bucket of 44 games, should be able to make more money for the same thing the next time around. That number could rise if, as Scott hinted, the league sells more games to an outside network, but that gain would have to be examined against the effect less football inventory would have on the subscriber fee for the Pac-12 Network. Adding in the conference title game that relaunched last season, the Big 12 makes about $230 million a year from ESPN and Fox for a package of about 50 games. That number would almost certainly rise with multiple bidders.

Meanwhile, the SEC package on CBS (17 games in 2017) averaged 4.9 million viewers last season for the (relatively speaking) bargain price of $55 million. This was during a year of huge disparity in matchups that ranged from a 59–0 Alabama win against Vanderbilt that drew three million viewers to the Iron Bowl, which drew 13.7 million viewers. Other than the Big Ten rights, this package might be the most coveted of the next round of deals. Will CBS fight hard to keep it? Would ESPN/Disney try to unify all of the SEC’s rights? Would NBC want to add another premium property to go along with Notre Dame football?

ABC and Fox now have the capability to show college football from noon eastern until almost midnight on fall Saturdays. Might CBS or NBC want to do the same? Or would one of the networks want to run a featured game on Friday—currently the provenance of ESPN—to compete with SmackDown on Fox? (Assuming SmackDown remains on Fox when this deal ends.) As the demand for scripted entertainment continues to shift to streaming services, this might be the best ratings play.

We keep looking to the newest technology to determine how we’ll watch college football in 10 years. But it’s quite possible the most lucrative move for the conferences and for the networks will be to present the best games using technology that has existed for almost 100 years.