Monday Night Football ARLINGTON, TX – SEPTEMBER 26: An ESPN Monday Night Football truck at Cowboys Stadium on September 26, 2011 in Arlington, Texas. (Photo by Ronald Martinez/Getty Images)

Hey, here’s a fun little exercise in why context matters.

A guy named Todd Juenger of Bernstein Research went on the record about why ESPN should consider dropping their Monday Night Football deal.

Let’s play spot the fallacy:

Todd Juenger, senior media analyst for Bernstein Research, estimates the Walt Disney Company spends $1.9 billion a year for this content. Dropping it from its schedule could increase operating income by 50% from its current level of $4 billion a year.

That’s from a piece by Wayne Friedman of Television News Daily. Now, sure, if you just look at the numbers, and ESPN’s operating income is $4 billion a year, while they’re paying $1.9 billion for MNF rights, and you’re a simpleton, that makes sense! Hey, maybe ESPN could just take their new $6 billion a year operating income and then cut all their spending! Think of how much operating income they’d have!!!

Confusing operating income with revenue is a dangerously naive way to look at business practices as a whole, but then hey, I’m not a “senior media analyst”, and Todd Juenger is. They do make a token nod to what could happen if ESPN decided to gut one of their biggest draws:

Juenger says subscriber fees from pay TV providers, which amount to $1 billion a year, would likely not decline, given the loss of “Monday Night Football.” He suggest ESPN could reinvest that money for better upside.

“They only show 17 games per year [around $100 million per game], on a one-off night (Mondays), which has been significantly diluted by the addition of Sunday and Thursday night games,” says Juenger. He suggests ESPN could still cover many NFL games — through highlights and talk shows.  

Oh, well then, sure, disaster averted! Juenger wants to reinvest that budget elsewhere, like more highlights and talk shows. This is a man with a plan, folks.

We honestly don’t have to get too deep to go over just why this is misguided analysis, but let’s go for it anyway: ESPN’s subscriber fee is now over $7 a month, and all their networks combined bring the price up over $9. That’s a big chunk of the cable bill, and the only draw remaining is live sports. That’s the last stand against cord-cutting. Without live sports, there’s zero reason for people to want to pay that figure, and without that ESPN’s revenue of $7+ billion, just from subscriber fees, would plumet. As would their operating income, which again, is an entirely separate thing.

Highlights and talk shows aren’t the answer, at least not at that price point, and before Todd chimes in to say “just get different live rights!” it’s important to remember that they’re not a buffet menu, they go up for bid (or don’t, sometimes) at certain times. It’s not a buffet. ESPN is in a tricky situation, and though they don’t have a ton of options, jettisoning the MNF rights is probably not near the top of the list.

[Television News Daily]

About Jay Rigdon

Jay is a columnist at Awful Announcing. He is not a strong swimmer. He is probably talking to a dog in a silly voice at this very moment.