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Cord Cutting Changing The Landscape For College Sports

No one knows where this is leading but things will never be the same.

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More and more people are waking up to the realization that sports, and definitely college sports, have a major problem: people are no longer as willing to pay high cable bills.

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As a result, ESPN's audience - everyone's audience - is shrinking.

Check out PAC-12 commissioner Larry Scott:

"[Cord cutting] is a game changer. If and when that happens, I’d like to be in control of my own network rather than someone else in control."

He thinks the PAC-12 is in a better position than the Big Ten, which thinks it has a long-term cash cow in the Big Ten Network, which as we've said before, is really a defensive move to counter declining fan bases in the Big Ten states.

Meanwhile, even folks at Comcast are starting to face up to the problems. Lobbyist David Cohen said this:

"Netflix is the ultimate frenemy...Part of this is a self-inflicted wound. We have made video too expensive."

There are always wild cards. The recent merger of DirecTV and AT&T creates a very large audience, both in the U.S. and Latin America.

The combined audience is twice the size of Comcast's. AT&T/DirecTV bundles channels of course, but also other services: Pay TV, broadband, voice communication services (we used to call this telephone service) and wireless.

Keep in mind that AT&T still owns a ton of telephone poles and will not have to build a national fiber network from scratch as Google is doing - and as a condition of the merger is required to significantly expand fiber penetration.

It's possible that this company could emerge as the big winner, but you can't count out Verizon and some combination of whoever survives between Comcast, Time Warner and the other traditional cable companies, although it probably won't be traditional at that point.

And then there's Netflix. Netflix is benefiting from cord cutting as much as anyone. Why wouldn't someone like, say, the ACC, be interested in putting content there? You could certainly do live events; you could also build a library of previous events which people could watch at will. As a matter of fact, if Netflix decides it never wants to do live sports, what if you could go there and call up classic ACC contests from the past? That would open up a whole new revenue stream.

Netflix, by the way, currently has 65 million subscribers and is on a mission to become a thoroughly global company.

And then as competition weeds out contenders, consolidation should force one of the major survivors to consider going after Netflix. As of now, Netflix has two basic sources of income: streaming and renting DVDs. It has a market cap of roughly $45 billion, which is significant. It pales next to AT&T's, which is $180 billion and likely to rise after the merger and other than global growth, which shouldn't be dismissed, Netflix doesn't (yet) have other ways to increase revenue. That's a real problem going forward.

And of course Apple has a market cap of nearly $700 billion and $160 billion in cash it's sitting on, Smaug-like. We could certainly see Apple making a play for Netflix or, if it really felt a need for mass programming, then a sports play. As we've said previously, the ACC needs to look past what exists today and to imagine new ways to get events to market.

This is all speculation of course and there's no way of knowing where technology will be in 10 or 20 years. Facebook could use Oculus Rift to put us on the 50 yard line and then who cares about TV anymore? As a matter of fact, in Virtual Reality, you could theoretically sit directly behind the quarterback or run a route with a receiver. Or you could be the receiver.

And somewhat under the radar, there are already massive audiences online for video game competitions. Money will eventually follow.

Everything is in flux, but whatever ultimately comes of this, it can't hurt to have a large population base, which should help the ACC a lot.