[Author was long YHOO at time of writing]
Bill Simmons could make 8x the amount of money if he launched his own subscription Over-The-Top (OTT) service in its first year than if he was a paid talking head on Turner or
The biggest news in sports media in the last month has been
Many - including me - have speculated on where he will go next post-ESPN.
Should he stay on TV, Turner Sports seems to make the most sense. He would get to cover the NBA on TNT with the #1 pre- and post-game show, plus he'd likely be able to do new 30 for 30-esque sports documentaries on HBO Sports, as well as chime in on sports news of the day -- a la his friend and former colleague Rachel Nichols -- on CNN. He could also contribute his writings to Turner's Bleacher Report. Turner also doesn't air NFL games, so he could tee off on NFL Commissioner Roger Goodell without fear of reprisal.
Simmons' old contract at ESPN was reported to be worth $5 million a year. It's likely Turner could pay him more than this to bring him to their collection of assets.
I've previously argued it would make sense for someone like
In my prior writings about Simmons, I suspected that he would be unlikely to try and launch his own OTT subscription site the way Glenn Beck has done with TheBlaze. This type of OTT path would be a lot of work. Simmons has been paid very well in the past few years. Why not just take more money to be a hired hand at Turner or Fox, who would fall over themselves trying to get him in the fold to prove they were cool?
Well, over the past few weeks, I've been researching the whole OTT model, which is still in its infancy. There's only really Glenn Beck and a few other models here to examine. However, as I dug into it, my eyes started to grow. I suspect Simmons has realized the same over the past few weeks as he's been forced to contemplate this: Bill Simmons could make a ton of money if he decided to make Grantland 2.0 an over-the-top subscription service.
Let's look at Beck. The conservative firebrand left a high-powered show on Fox News a few years ago to launch TheBlaze, a $10 a month subscription service. For that, you get all-you-can-view-Glenn.
TheBlaze is private, so no one knows how it's actually doing. However, this post from Brian Stelter at CNN from last August suggests that Beck is up to 400,000 paid subs. That estimate comes from BTIG's Rich Greenfield. I reached out to Greenfield today and he believes that number is still accurate. I also know that TheBlaze has been hiring some great digital talent in the past few months. This takes bucks.
If we assume Greenfield is right, Beck is doing $48 million a year in subscription revenue. That's very impressive. Even more impressive though is that Beck "only" has 961,000 Twitter followers. That means Beck is getting about a 50% conversion rate on his followers. That seems very high.
Stelter's article refers to a Forbes estimate that TheBlaze is doing $90 million a year in revenue but that most of that number comes from Beck's syndicated talk radio show. But that can't be if the $48 million a year number is coming from paid sub revenue. This is a private company but it could be that TheBlaze's revenue is already substantially higher than $100 million a year. No wonder he didn't mind leaving a cushy high-profile TV job from the biggest cable TV channel in America to go behind a pay wall.
Now what could Bill Simmons charge for his own website/TV Channel that you could access on your Apple TV? $10 / month is a nice round number. Beck charges that. So does WWE for its WWE Network which is a little more than a year old and is up to 1.3 million subscribers. That's generating $156 million annually for the wrestling company. (Simmons, by the way, is a big WWE fan and attended the last WrestleMania, so I'm sure their experiment with WWE Network isn't lost on him.)
But the best thing about most paid subscriber data: it usually only keeps chugging upwards over time. So you start with a core group of users and only grows.
Glenn Beck perhaps had an advantage of marketing to rabid conservatives who want to hear his message. But are sports fans any less rabid? Would there not be a core group of Simmons' followers who would pay $10 / month to watch him analyze the NBA and NFL, giving his unfiltered opinions on Roger Goodell?
The biggest advantage that Simmons has in contemplating this OTT model is how well he's already known. The guy has nearly 3.9 million Twitter followers. That's up from 3.7 million before he was fired a few weeks ago.
If Simmons could get a 10% conversion rate on those followers to his new pay site/OTT channel available on Apple TV, he'd immediately have 400,000 paid subs and the same revenue as Glenn Beck overnight at $48 million a year.
$48 million a year - out of the gate - sounds a heck of a lot more attractive to me than $6 million a year. Even though it would be a lot more work, Simmons would be nuts to pass up that kind of opportunity.
If I was him and given that kind of opportunity vs. being "paid talent" on Turner, it's a no brainer. Plus, he would be building something that's really his, not owned by the Worldwide Leader or Time Warner.
Howard Stern's deal at Sirius will be up soon and he will be faced with a similar kind of decision as Simmons now has. We could be on the verge of an Over The Top revolution.
