In the middle of 2011, ESPN was in over 100 million homes according to Nielsen estimates. In those same Nielsen estimates for September 2016, ESPN is in just under 89 million homes. Down 11 million homes in a little over five years! It sounds awful.
There’s another frame of reference though, courtesy of SNL Kagan which for years has produced estimates for “affiliate revenue per subscriber/month.” That is, estimates for how much on average Comcast, Time Warner, DirecTV, Verizon, etc pay networks like ESPN per subscriber each month.
For the year 2000, SNL Kagan estimated that ESPN got paid $1.14/month/subscriber. By 2005 that was up to $3.08/month. By 2011 it was $4.77 and for 2016 it’s $7.21.
Fun with numbers!
What’s the bigger number?
1. 100,000,000 * $4.77 * 12
or
2. 89,000,000 * $7.21 * 12
Option 2 is bigger to the tune of around $2 billion dollars in revenue a year.
BUT, Rights Fees!
Is ESPN paying $2 billion a year more in sports rights fees in 2016 than in 2011? Almost certainly. The current Monday Night Football rights deal was inked in 2011 but didn’t go into effect until the 2014 season. ESPN’s new (and huge) NBA rights deal was signed in 2014 but doesn’t start until the upcoming (2016-17) season. My math could be off but…
ESPN’s rights fees for 2017 (and beyond)= $5.7 billion/year*
ESPN’s 2016 annualized affiliate revenue run rate (includes ESPN2, ESPNU & SEC Network) = $9.5 billion**
By that math ESPN can pay for its current sports rights (its biggest rights deals NFL, MLB, NBA and BCS Championship run through 2022, 2021, 2025 and 2026 respectively) with billions to spare. The $9.5 billion doesn’t include advertising revenue.
* The NBA package alone costs more than $1.4 billion/year and I’m allocating all of it to ESPN. In reality the portion that should be allocated to ABC is a lot more than a rounding error.
**$ calculated based on SNL Kagan affiliate fee estimates and current Nielsen cable coverage estimates. I didn’t have a Nielsen number for the SEC Network but estimated it’s in 70 million homes.
BUT, What if the numbers keep going down!?
That’s a reasonable question and it’s reasonable to assume there will be further declines. But ESPN has some wiggle room. Moreover, SNL Kagan currently estimates that by 2019 that $7.21/month will jump another 27% to $9.17/month.
Department of “I don’t know who you are but you’re the real MVP!”
Sports media loves focusing on the people who are on TV. It’s understandable, but we wind up with a lot of “blah blah, Colin Cowherd,” “blah, blah Skip Bayless,” “blah, blah the guy who hired them” and not nearly enough “Holy #$!@ some geniuses at Fox Sports figured out how to get a billion in affiliate revenue for FS1 without having the NFL or NBA!” Those unsung heroes are a lot more important to FS1 than Cowherd, Bayless and Horowitz.
SNL Kagan 2016 affiliate fee estimates for the cable sports networks:
| Network name | Estimated # of Homes (000) | $/mo per SNL Kagan |
| ESPN | 89,856 | $7.21 |
| NFL NETWORK | 70,892 | $1.39 |
| FS1 | 85,931 | $1.15 |
| ESPN2 | 89,740 | $0.90 |
| SEC Network** | 70,000 | $0.71 |
| Big Ten Network** | 65,000 | $0.41 |
| GOLF CHANNEL | 76,231 | $0.37 |
| Pac 12 Network** | 15,000 | $0.36 |
| NHL Network** | 38,000 | $0.33 |
| NBC SPORTS NETWORK | 84,520 | $0.31 |
| NBA-TV | 54,367 | $0.30 |
| FS2 | 51,806 | $0.30 |
| MLB NETWORK | 67,116 | $0.28 |
| CBS Sports Network** | 63,000 | $0.26 |
| ESPNU | 71,548 | $0.24 |
| FOX DEPORTES | 22,564 | $0.23 |
| BEIN SPORT ESPANOL | 18,256 | $0.23 |
| Tennis Channel** | 50,000 | $0.15 |
| UNIVISION DEPORTES | 47,887 | $0.14 |
| BEIN SPORT | 24,149 | $0.13 |
| **Non-Nielsen estimates |
The numbers above should not be construed as “what you pay for sports.” The numbers in the table are what the cable, satellite and telcos pay for those channels. That’s the wholesale price. You probably pay retail. Also, these are national cable numbers only numbers. That means they exclude both retransmission consent fees for the broadcast networks, and regional sports networks (which come closer to rivaling ESPN than any of the national networks).