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The original was posted on /r/cfb by /u/nattersley on 2025-11-08 18:22:04+00:00.
I’m not linking to a journalistic source and only adding to the deluge of Disney/Google content, but I’m hoping the mods will allow this discussion because a) I’m an academic economist who has research interests in cable, bundling, and content licensing; and b) I’m an avid college football fan who cares about consumer access to games.
I want to have an honest conversation about the likelihood that this Disney/Google dispute ends with no licensing deal, and the subsequent likelihood that we start to lose access to bundled live TV options altogether. For the interested, the research of Greg Crawford and Ali Yurukoglu is a good starting point to learn more—see “The Welfare Effects of Bundling in Multichannel Television Markets” (2012) and “The Welfare Effects of Vertical Integration in Multichannel Television Markets” (2018). I will touch on some of their arguments here.
Start with the fact that sports and news are the two pillars holding the entire cable TV industry up right now. Cable providers have always complained about the licensing fees that ESPN gets, but they understand and we all understand that at this point, the rest of the TV landscape is made up almost entirely of “ghost channels” that play Office or House Hunter re-runs that are also licensed and available on streaming services.
Without sports and/or news, cable providers understand that there is almost no value proposition for their product from a consumer perspective. Google certainly understands this, but they are also unique in the world of cable providers in that they… don’t really care? Google is the greatest monetizer of advertising dollars in the history of the world, and we can get into the technical details of ad slotting and Google’s ad serving strategy, but suffice to say: they are happy monetizing your viewership be it on YouTube or on YouTube TV.
What are the economics of live TV? For a long time it was a high fixed cost/rent extraction approach. Companies paid huge amounts of money to lay cable in your neighborhood, and the reward for their effort was being able to charge you through the nose for their TV (and Internet, and phone) service. Yes they broke up AT&T, and yes there were attempts to introduce competition, but I would argue that two or three providers is not much better than one in this case. Competitors are not disciplined by threat of entry, there’s product differentiation, collusion is pretty easy, etc. There is more nuance here, but that’s my general take.
Enter the OTT crowd. This is “over-the-top” live TV, aka the folks like Google and Hulu that realized, hey, Internet is fast now, we can serve live TV over the Internet. This decouples infrastructure investment from the content licensing/bundling. Now anyone can sign content agreements with TV channels, charge you a monthly fee, and boom you have a linear TV service. Margins got squeezed, cord-cutting accelerated in other respects because of the rise of Netflix/Hulu, and altogether these traditional cable providers started to lose their death grip on content. Content *producers* (people that own the rights to the content itself, who may or may not be vertically integrated with a TV channel, streaming service, cable provider… it’s complicated but generally true) realized that a “wider is better” approach tends to be the best money-maker, and we have been slowly entering the world we find ourselves in today.
In this world, content is king. Everyone knows this. What you can license, the terms of the license—price, exclusivity, access (do you have all the episodes? for example ABC shows on Hulu used to be licensed to show the current season, then it would expire and you could not view past seasons)—these are everything. Figuring out how to monetize it is important, but it’s not the most important thing. You can charge monthly subscriptions. You can show ads. The better you target ads the more money you make. There’s even a Free Ad-Supported TV (“FAST”) model with services like Pluto that aims to give you a live TV-esque experience that is fully supported by ad revenue. This has not turned out well, as their ad-serving strategy isn’t lucrative enough to get you exclusive access to “good” programming. Hulu is a much better value proposition (sorry, Pluto).
Disney knows how valuable their sports content is. It is a general truism of economics that they would rather face consumers and set prices directly than negotiate through an intermediary. They started their own streaming service, ESPN Unlimited, in August. This dispute with Google is a massive test of their conviction to the DTC live sports model. I have been telling people that I would not be surprised at all if Disney does not cut a deal and forces people to look elsewhere for their programming. I would not be surprised if they are internally planning to phase out all of their linear TV contracts and force consumers to use their streaming service.
This is where we are left. In some ways it has felt inevitable that bundled live TV would fall apart and we would fracture into content producers offering live sports and news services exclusively as consumer subscription services. It may be happening now. It may not, yet. Back to Crawford and Yurukoglu’s work, they estimated in 2012 that consumers’ welfare would be reduced by about 3 percent if we moved to an à-la-carte model, with a pretty wide margin of error. The exact numbers of this are really hard to predict—all of this vertical integration, bundling choices, bargaining power, etc. mean that we don’t really know what the exact effect on consumer welfare will be, and it may end up being a wash or even pro-consumer in the end.
However, if you think that the cognitive burden of managing a fractured ecosystem of subscriptions is a drain on your financial or emotional wellbeing, then you are justified in thinking that this is a shitty outcome. I’m sorry that I don’t have any solutions to offer right now. I think it’s worth understanding how we’ve gotten to this point, and it’s also worth projecting into the future what your options may be so that you can prepare yourself—financially and emotionally—for what you may have to do to watch your favorite college football teams. Hook 'em.
(P.S. and I know we haven’t even gotten into the licensing deals that conferences sign with TV networks. What a mess!)