College sports fans are being gouged—not by dynamic ticket pricing, but by things that make or break your ability to follow your favorite team. Think about this—how often do you watch a football game via streaming? If you’re a fan of the Big 12 Conference (or any conference that has signed on to a streaming only platform), that’s the only way you can watch most of the games. But what if your rural community doesn’t have a basic internet connection? What if you like to fly to the home or away games in rural college towns? It’s become more difficult because the frequency of airlines/flights that connect you to that airport have diminished. How about trying to stay up to date with the scores via your cell phone? You are paying some of the highest prices in the world to use that device.
Economist Thomas Philippon recently wrote a book called “The Great Reversal—How America Gave Up on Free Markets”. His premise, which I have applied directly to college sports fans, is deeply disturbing in its clarity. Broadband, airlines, and mobile technology have been upended by market concentration and a lack of competition. Twenty years ago, the American market looked and acted like a competitive entity. The U.S. “was the land of low prices and free markets, where you had a lot of choices, be it for flying around, buying a cell phone or getting on the internet”, said Philippon. The markets have “become more and more concentrated, controlled by a few large players…today, U.S. households have fewer choices and they pay higher prices.”
30 August 2014:A fan takes some cell phone pictures during the Boston College Eagles game against ... [+]
One scan of the mobile phone landscape as well as the connecting cellular and wi-fi technology that makes them “smartphones”, shows that we are living with only three major players in the phone industry-Verizon, T-Mobile/Sprint, and AT&T. That is barely a competitive landscape. Ever wonder why your smartphones cost so much? And why they are laden with taxes and fees, or permit you to buy a heavily subsidized phone through multi year contracts that include monthly leases? Because we are down to three competitors.
The cost for mobile technology in Europe and other continents is a fraction of what Americans pay. Philippon writes Americans pay two to two and a half times more than other countries for the same service (or sometimes worse). Americans are overpaying an average $50-60 per month for both cell phone and bare bones broadband plans. And for millions of American college sports fans who are trying to watch college football, basketball and other sports via a streaming app, the streaming comes in around 3-4mbps (considered the “minimum” speed by the Federal Communications Commission), not the “fast” speeds of 100mbps (or even 1000mbps) advertised by Verizon and other “fiber” networks. Further compounding the situation, HD apps like ACCN, BTN+, ESPN+ and others require faster wi-fi and other capabilities to gain the full benefits and not see that dreaded “buffering” wheel.
UNITED STATES - FEBRUARY 11: NCAA president Mark Emmert, right, listens as Big 12 Conference ... [+]
This wide disparity was driven home in the recent Senate hearings on the NCAA’s dilemma of how to manage names, images and likenesses in February. United States Senator Shelley Moore Capito, Republican from West Virginia, took Big 12 Commissioner Bob Bowlsby to task over the fact that the vast majority of college sports content is only available over the internet via an app and not on a traditional cable channel.
WASHINGTON, DC - JANUARY 21: (L-R) Sen. Shelley Moore Capito (R-WV) and Sen. John Barrasso (R-WY) ... [+]
She said, “I’m going to diverge a little bit from the chairman telling (us) to stay strictly on message because I have Commissioner Bowlsby here and I wanted to ask a question.... You recently signed a Big 12 deal to stream on ESPN-Plus....(my) rural state, West Virginia (is) Playing Kansas [Wednesday]. You can only view the game if you pay $4.99 for a subscription and if you have connectivity. It’s been a source of very deep concern to West Virginia….. Maybe it’s a little before its time, but it’s a source of irritation to us. I’m sure you understand that. These teams are our pro teams. We want to see that WVU victory on our TVs on Wednesday. And then Baylor, the No. 1 team in the nation, on Saturday… Can you respond to that, please?”
Bowlsby paused, then replied: “I’ve had the opportunity to respond to this question previously. We took a leap of faith and believe the ESPN platform is best in class. So it’s a voyage of exploration. There isn’t any doubt about that. We live in five states with 35 million people, and as such, there isn’t really the option of a linear network as some of the other conferences have done. The process is the best we have available to us, and frankly it’s quite good.”
It’s not the Big 12’s fault there is lousy broadband in portions of West Virginia, Kentucky, Arkansas, Nebraska, Oklahoma, Texas, Iowa, Kansas and other parts of the Midwest. The broadband landscape has been built and dominated by technology companies with little financial incentive to invest in fast networks to the benefit of hospitals, emergency services, businesses, and the average consumer of college sports in rural America. There was hope earlier in the decade when Google Fiber was introduced to 12 cities, jumpstarting their communities’ economy with gigabit speeds. However, Google suspended the project in 2016.
Because there is little to no competition pushing them to build that infrastructure, college sports fans (often “early adopters” of technology), are disproportionally paying more, and getting less, from their viewing and traveling experiences. Add to that the increasing costs to fly to middle America destinations (and the subsequent hassles with security and weather delays), it’s no wonder college sports are experiencing declining ticket sales in football and men’s basketball.
Airports serving small to mid size towns like Iowa City, Iowa; Bloomington, Indiana; and Lawrence, Kansas (along with other college towns) are often located up to an hour away from a regional airport, causing passengers to add to their trip costs by renting a car. Add to that, the airlines that fly to those destinations are subsidiaries of larger airlines like Delta, United and American. It’s not often you’ll find Southwest, Frontier, Spirit or JetBlue servicing these communities. The prices tend to be higher because of the limited competition and the fewer number of daily flights.
When you look at these three sectors, one has to wonder if we as a nation, have given up on free markets. Certainly, college sports fans may notice it costs more to travel, watch and engage with sports content that relies on broadband, cellular and airlines, especially when you only have two or three choices. Is this what we’re stuck with? I don’t know. But I do know that college sports insiders need to pay attention to how much more expensive it is to connect fans with our teams and campuses.
