The future broadcast deals of the NCAA tournament

Every March, America goes crazy for buzzer-beaters, Cinderella stories and brackets. The annual rite of passage dubbed March Madness causes millions of sports fans to call in sick in order to post up on their couch and glue themselves to their television.

For years, the decline in worker productivity due to the NCAA Men’s Basketball Tournament has cost traditional companies while business boomed for cable sports networks. However, with more and more sports fans, especially young ones, cutting the cable cord, the cash windfall for these networks may be coming to an end.

Has it already become mad for cable sports networks to pay exorbitant sums for media rights?

Competition between networks sets unreasonable prices

The NCAA and CBS and Turner Sports are currently in the sixth year of a $10.8 billion deal that goes through 2024,but negotiations are already underway with multiple for the next mega media rights contract. Despite an uncertain landscape for the future of media, ESPN, Fox and CBS are all competing for the chance to broadcast the NCAA Tournament.

Oklahoma athletic director and chairmen of the NCAA Division I men’s basketball committee believes that it does not make sense to get in an arms race for a declining product, telling the San Francisco Chronicle.

“Costs are rising far more rapidly than the rate of new revenue.”

ESPN is well aware of the decline in revenue, as the cable provider was forced to lay off 300 employees after losing seven million customers over the last two years. Fox has also been hit by rising costs and declining revenue and the network plans to shed $250 million in salary.

Given these problems on their balance sheets, it seems these media companies should refrain from bidding on the NCAA Tournament. Maybe they believe that live sporting events are enough to entice young sports fans to keep their cable

Desperate times, desperate measures?

There are so many cheaper, more easily accessible competitors to cable that it looks like the golden years of cable television are over. Sensing their imminent demise, it seems like cable companies are overextending themselves to monopolize live sporting events.

The problem with this logic is that it is an antiquated approach to new problem. Rather than using an outdated playbook, these cable networks should start better understanding the next generation of sports fans.

It’s time for ESPN, Fox and Turner Sports to stop living in the past and start developing better multi-platform service products to accommodate young sports fans who will likely never be cable customers.

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