ESPN, Pro Sports Franchises Prop Up Bowl System

Historically, bowl games were put on by local non-profit civic organizations looking to drum up tourism business; but since the introduction of the BCS in ’98, fan interest in attending non-BCS/NYD 6 bowl games has declined. Depressed ticket and corporate sponsorship sales, combined with rising production costs led many non-profit game organizers to sell over the last 20 years. Media networks (see: ESPN, owner of 13/17 for-profit games) and professional sports franchises have been beneficiaries, picking up the games at a discount; ESPN (DIS) treating the games as valuable programming content to sell advertising, while teams like the Lions, 49ers and Yankees rely on existing resources (stadiums, sponsorship sales personnel etc.) to turn a profit.

Howie Long-Short: Rights holders aren’t the only ones making money in a bowl system that no longer relies on gate receipts. Conferences (and member schools) have also gained from the change in business model, generating $517 million in net income last season. $422 million comes directly from the playoff system, which ESPN pays $470 million/year to broadcast. It’s not an exaggeration to say ESPN is propping up the entire bowl system.

Fan Marino: Bowl attendance has declined 9 years running, with average attendance in ’16 the lowest since the 40’s; but that stat is misleading. The number of games has grown from 18 in ’96 to 40 in ’17. As you dilute the quality of teams/play, you are going to lose the audience. There won’t be any drop in the cost of 2018 CFB Playoff tickets. According to TicketIQ, a leading primary and secondary ticketing distributor for rights holders (that offers a low price guarantee), prices to this season’s semifinals (on secondary market) are up from $398 (Peach) and $221 (Fiesta) last season; to $709 (Rose) and $616 (Sugar) this year. Note: Bowl season kicks off tomorrow, with 6 games on the slate.

How ESPN, College Football Playoff are saving bowl games

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Author: John Wall Street

At the intersection of sports & finance.

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