Too Powerful??? Hmmmmm
IMHO, a company is too powerful when they have friends in Washington D.C. that pass laws to restrict competition.
When a company in a lightly-regulated or unregulated industry gains a huge market position, it is not at all uncommon for said company to begin to take that market position for granted. That is what we are seeing here.
This is not to be feared. Every time someone does this, they eventually get smacked back to reality, or smacked down. Unless of course they have friends in Washington that prevent the market from smacking them.
In ESPN's case, they are already building their competition by taking their position for granted. Tallahasse is a very small town, but it's big enough to have a Fox Sports Radio (FSR) station. FSR is a network that is growing because of the hegemony, perceived or real, of ESPN radio. The Fox Sports Network on TV is not as well run, but if ESPN continues on their current course, FSN will continue to grow.
Of course, the main problem that we have is the nature of television contracts. I won't bore you with an economics lesson, but if you don't understand why exclusive-broadcast-rights contracts are the norm, you don't know enough about economics to engage in this discussion with adults. Sorry for being harsh, but I don't know of a nice way to say that.
Exclusive-broadcast-rights contracts leave us with only ONE provider of a product that we want with practically NO elasticity of demand. This leave us believing that they have too much power. Especially when one company ends up almost all of said contracts for one or more sports.
But if said company behaves as if their market position is a God given birthright, they lose it. And it can happen faster than anyone expects. The best example is the ESPN of 20 years ago.
Do you remember how you felt when ESPN got their first college football game? Huge surprise, right? Everybody was wondering, "How in the HELL did this darts, billiards and croquet channel get a REAL sport???". It was because the stations that televised college football at the time underestimated the competition, or believed they were in a position where they didn't have any.
Of course this is all an oversimplification, but the economics behind this are literally dissertation material. If I were to go back to school to get a PhD, this may bloody well be what I'd write my dissertation about. But you sure as hell wouldn't want to read it.
Oh, and one last thing. Who is the upcoming Big-Ten Network in bed with? That's right, FOX. ESPN are getting the competition that their behavior is begging for.
