ESPN shocked the media world last week when it announced substantial layoffs. That the move came on the heels of a couple of eye-popping deals only underscored the cutthroat battle between networks scrabbling for live-sports rights.
But even as Fox Sports 1 and NBC Sports Network enter the ring, one fact remains: There aren't many more deals to be had. With the exception of the NBA, most sports-rights contracts for the major properties are locked down until after the start of the next decade.
Which may explain why ESPN spent so big recently. The Walt Disney Co. network just inked a $825 million, 11-year deal to put the U.S. Open tennis tourney entirely on cable, ending CBS's 46-year relationship with the Open. Two years ago, ESPN snatched Wimbledon from NBC after 43 years with a 12-year deal worth $500 million.
ESPN also opened its wallet to launch the SEC Network, a 24-7 channel devoted to the premier conference in increasingly-hot college football (it didn't disclose terms). Only two years ago, it announced a $300 million, 20-year deal to create the Longhorn Network with the University of Texas. Then there's the $470 million-a-year deal struck in late 2012 for the long-demanded college-football playoffs.
There's a flipside to such spending. ESPN's decision to lay off 300 to 400 staffers, the network's first mass cutbacks since 2009, was driven by an urgent need to slash costs. Compared with other sports-media companies, which run much leaner, ESPN has plenty of employees—over 6,000 worldwide, said James Andrew Miller, co-author of the book "Those Guys Have All the Fun: Inside the World of ESPN."
The big prize on the horizon is the NBA. The league's national TV deals with ESPN and Turner Sports' TNT expire after the 2015-2016 season.
Fox Sports founder David Hill has made no bones about wanting the NBA. "Will we be in a position to bid on the NBA TV rights beginning with the 2016 season? Absolutely," Mr. Hill told Broadcasting & Cable in April. "As TV rights come up for bid from different college and professional leagues, we will be opportunistic and we will bid on them."
But save the NBA, there are just not that many national sports packages left to buy—which ultimately drives up prices for local sports.