College football is finally underway, and that means the return of one of the sport’s longest—and most expensive—traditions: guarantee games.

For decades, bigger schools have paid smaller institutions large sums to come play on their home turf. The host typically gets an easy victory, the visitor gets a nice payday, and everyone leaves happy. 

That wasn’t the case last weekend, though, when New Mexico paid $360,000 to Montana State for their Week 0 home opener. The Bobcats, an FCS program, beat the Lobos 35–31. This weekend’s financial favorites—and there are many of them—will be hoping for better luck.

In Week 1 alone, more than $35 million is being shelled out across at least 55 games with monetary guarantee contracts, according to research conducted by Front Office Sports. Those payments range from as little as the $300,000 that Middle Tennessee is paying Tennessee Tech to the $1.9 million check that Alabama is writing to Western Kentucky.

Worth the Price of Admission

“If you’re scheduling somebody like Alabama for a road game, you know the chances of you winning the game are not great,” WKU athletic director Todd Stewart tells FOS. 

But despite the almost-certain season-opening loss—the Crimson Tide are favored by more than four touchdowns—the pros of the trip to Tuscaloosa severely outweigh the cons, in Stewart’s eyes. “If we didn’t play this game, and our football budget had $1.9 million less, our program would look very different,” he says. The Hilltoppers’ athletic department generated roughly $15 million before subsidies from the university during the 2022–2023 fiscal year—the most recent public financial report. 

There’s also the recruiting benefit of rare national exposure for the Conference USA member, as this will likely be WKU’s only game on the flagship ESPN channel. 

Supply and Demand

After WKU plays Alabama on Saturday, the school will flip the script in Week 2, paying Eastern Kentucky $325,000 for an interstate visit. It’s a common strategy for Group of 5 schools, complementing a road guarantee game by paying for a home FCS opponent. Colorado State will do the same thing, opening at Texas for a fee of $1.8 million before writing a $400,000 check to Northern Colorado next weekend.

Looking forward, Stewart hopes changes like conference realignment and the expanded College Football Playoff don’t lead to fewer guaranteed game opportunities for schools like WKU. And he wants to set new financial marks along the way. “I hope the amount continues to grow,” he says. “Nobody, to my knowledge, has crossed the $2 million threshold yet.”

As Labor Day approaches, ESPN and parent company Walt Disney Co. are once again locked in an unresolved and potentially problematic distribution issue coloring the sports-filled holiday weekend. 

A year after the sports media giant battled with Charter, the No. 1 cable carrier in the U.S., in a standoff lasting nearly two weeks, ESPN is now in a similar situation with DirecTV, the No. 3 distributor. The current deal between DirecTV and Disney expires Sunday, and, while negotiations are ongoing, there is no new agreement and a structural divide remains between the two sides. 

“We don’t have a deal. There are still fairly large gaps in the perspectives we’re each bringing to the table,” Justin Connolly, Disney president of platform distribution, tells Front Office Sports. “DirecTV needs to roll up their sleeves and engage on things that we can execute together.”

DirecTV holds more than 11 million subscribers, and it is pushing to alter its Disney deal to allow for smaller, more tailored bundles. If the deal is not renewed, access to top-tier events such as the US Open in tennis stand immediately at risk for those consumers, soon followed by ESPN’s coverage of college football and the NFL’s first Monday Night Football game of the season, set for Sept. 9 between the Jets and 49ers. 

Disney has offered various options similar to its Charter deal from a year ago, Connolly says. That prior agreement notably included bundling of the media giant’s linear channels and streaming service. But that has not resulted in a new contract. Talks between Disney and DirecTV have been held every day week, but Disney executives say DirecTV has not “meaningfully engaged” on proposals made to the carrier.

In a recent blog post, DirecTV chief content officer Rob Thun lamented a growing split between traditional dealmaking for distribution agreements such as this and accelerating programming and consumption changes across the media industry.

“While [direct-to-consumer] offerings have evolved, pay-TV packages have remained largely unchanged,” Thun wrote. “Instead of allowing distributors like DirecTV to also develop smaller, more tailored packages at prices that reflect the value they get from the content, programmers have continued to impose and enforce strict bundling requirements through exorbitant minimum penetration rates.”

Venue of Discord

Disney’s participation in Venu Sports, the sports-oriented joint venture with Fox and Warner Bros. Discovery, is also a flash point in the dispute. FuboTV’s legal challenge against Venu Sports has led to a preliminary injunction against the debut of the service, a subsequent appeal, and criticism of the court decision from ESPN chairman Jimmy Pitaro. But DirecTV is also taking aim at the new service.

“We disagree with Venu’s anti-competitive strategy and believe that distributors should have the same flexibility to thrive along DTC services by offering genre-based packages that extend beyond sports to include locals, entertainment, news, family, movies, and others,” Thun wrote.

Connolly, however, says they have presented precisely these kinds of more tailored options, including a sports-centric linear bundle based on ESPN and ABC.

“A lot can happen in the next two and half days [until the contract expiration],” Connolly says. “But there’s still a lot of work to do.”

As the NFL season rolls around, ESPN approaches the first anniversary of the launch of its first sportsbook, ESPN Bet. 

Since ESPN entered a 10-year, $2 billion partnership with Penn Entertainment and rebranded the Barstool Sportsbook to ESPN Bet, the sports media giant has yet to achieve significant gains—at least in terms of market share.

In a May report by Eilers & Krejcik, ESPN Bet had secured only 2.8% of the online sports betting market share compared to a combined 74% by FanDuel and DraftKings. Penn president Jay Snowden said last year that the company is projecting 20% market share by 2027.

But ESPN claims it’s where it wants to be. During the company’s media day in Bristol, Conn., on Wednesday, Mike Morrison, VP for ESPN Bet and ESPN Fantasy, told Front Office Sports that ESPN is “happy” with its growth.

“It’s tracking very much along expectations,” Morrison said.

One of the positive points ESPN highlighted during its ESPN Bet presentation is it’s consistently in the top three sportsbooks in terms of weekly active users. According to Sharp Alpha Advisors managing partner Lloyd Danzig, ESPN Bet has made strides to at least put it in the ballpark of the second-tier of sportsbooks—and the opportunity of the media giant to capitalize on its brand is still on the table.

“ESPN Bet has achieved a hold rate and parlay mix that meets or exceeds levels seen at BetMGM and Caesars, while still lagging significantly behind DraftKings and FanDuel,” Danzig said. “Market share remains muted compared to initial investor expectations, though the media side of ESPN has shown clear signs of more aggressively integrating betting into core user flows.”

For Year 2 and beyond, ESPN is betting on a strategy taken from the world of Apple and Google. The media giant is creating an ecosystem around the ESPN app, ESPN Bet, and ESPN Fantasy in which the accounts are now interconnected. For example, if a user drafts Patrick Mahomes on their fantasy team, they will receive enhanced prop bets for Mahomes during game day. Then ESPN Bet will also feature links back to the main ESPN app—to gamecasts and streams.

“[ESPN Bet] can really focus on building a world class sportsbook, [ESPN’s app] can continue to be the preeminent sports destination, and we can complete this flywheel between our two products that no one else can compete with,” said Brian Marshall, VP for sports product and technology.

ESPN’s brand value certainly puts it in a unique position to acquire users—but the jury is still out as to whether that will be enough to catch up to the head start of the two industry giants.

“This fall is really the key period to really assess where we are, how we’re doing, where we sit in the market,” Morrison said.

On the other hand, DraftKings and FanDuel are looking to do the reverse of ESPN by expanding from an online sports betting and fantasy platform and into content machines. And even Fanatics, who acquired PointsBet last year, is still hoping to build its own ecosystem tied with merchandise and collectibles.

“The race to create a one-stop shop for sports fans is well under way,” Danzig said.