MediaTalk | Season 4 | Ep. 14 - Must-Have Events vs Hard-to-Find Games: The New Economics of Live Sports

View Full Transcript

Mike Reynolds: Hi, I'm Mike Reynolds, a senior reporter covering the media industry with S&P Global Market Intelligence's Tech, Media and Telecom news team. Welcome to Media Talk, a podcast hosted by S&P Global, where the news and research staff explore issues in the ever-evolving media landscape. In this installment, we're going to wrap up a run of sports that began with the preview of the Men's and Women's March Madness basketball tournaments, the start of the MLB's 2026 season and the Masters, and the many changes that are reshaping the world of golf. Today, we're going to review a recent webinar, "Navigating the Chaos of Sports Media Rights Fragmentation." We're also going to delve into a research piece that has become a rite of spring for Kagan: the Sports Report. Three of the webinar participants and Sports Report authors are with us today: Kagan Head of Research Justin Nielson, Principal Analyst Scott Robson, and Research Analyst Mike Johnson. How are we doing today, fellows?

Justin Nielson: Doing great. Glad to be here. Thanks, Mike.

Reynolds: Alrighty. Scott, let's go to the webinar first. Can you just give us a brief recap of what it was? As I recall, there were four top-line subjects.

Scott Robson: Yes. So, thanks for having me on, Mike. This is an annual event for us. It's centered around our Sports Report, which is a comprehensive overview of our growing coverage of the industry. The webinar is open to the public, so there's a wide range of attendees, from experts to more casual observers of the industry. The topics range from more of a deep dive into some broad overall trends. Given this year's title, which was "Navigating the Chaos of Sports Media Rights Fragmentation," sports rights were the centerpiece of the webinar. So, we focused on global sports rights. We looked at the popularity of sports on television, we leveraged some of our survey data to draw conclusions there, we analyzed the national sports networks, the regional sports networks, and how local sports rights are shifting, and we also explored the growing sports gambling industry. So, this year we kicked around some ideas centered around four major topics: global sports rights, local rights in the US, the rise of direct-to-consumer streaming services, and then we looked at 2026 specifically and how it's such a global year for sports. We did some Q&A following the discussion, and I think those in attendance were interested in how high these rights can climb. They're also interested in how AI and new tech might affect the industry, things like that.

Reynolds: Gotcha. Yeah. And we did some polling questions as well, and when we get to the end here, I'll give you a URL so you can check out the encore again. Mike, can you take us through, as Scott just mentioned, it's a global sports media rights world. Can you just give us a couple of high points of some of the things we discussed the other day?

Michael Johnson: Yeah, absolutely. Thanks, Mike. So, yeah, it's no secret that the business of televised sports has transformed dramatically in recent years. We've seen surging media rights costs, record-breaking franchise valuations, and a wave of strategic mergers and acquisitions, and it's all against the backdrop of these major global events this year, like the Winter Olympics that were in February and the FIFA World Cup coming up this summer. So, yeah, the sports media landscape is now more dynamic than ever, with live sports reaching audiences through traditional TV, streaming platforms, direct-to-consumer apps, things like that. This expansion has not only increased the value of sports rights but also changed how fans engage with their favorite teams and events worldwide. So, it was great to explore the topic and trends on the webinar that are shaping the future of sports broadcasting and the opportunities and challenges that come with them.

Reynolds: Yeah, and sports has become, again, obviously there's more entertainment programming than ever; it's in an on-demand world. You can check it out when it fits your schedule. Sports still runs live for the most part, so it's becoming even more important. Justin, the webinar also delved into the more localized aspects of sports these days.

Nielson: Yes, Mike, and it has evolved over time. It's almost a back-to-the-future type of trend where broadcast stations are securing local rights for teams. Again, you look across the major broadcasters like Sinclair and Nexstar and Gray TV and Scripps. They've looked at the regional sports networks' implosion and taken some of those local rights deals in terms of over-the-air distribution as well as linking up with the direct-to-consumer streaming services that either the team or the league have developed and promoting the local fans and audience and getting those sponsorships that are helping not only the teams but also the league in general.

Reynolds: Yeah. And again, it's come at a time when the RSN industry, which had been the staple over the last three, four decades in terms of how people viewed their local NBA, NHL, or MLB teams, again, with the rise of streaming, there's been a lot of cord-cutting. The money's just not there as it was before, relative to both the subscriber fees, and then in turn, since there's fewer people, the ad money's not as great either. So, it's a real transformative thing. We've documented a lot of cord-cutting. The money's just not there as it was before, relative to both the subscriber fees, and then in turn, since there's fewer people, the ad money's not as great either. So, it's a real transformative thing. We've documented a lot, and it was definitely a key part of the webinar the other day. Scott, as you mentioned before, 2026 is a big year, a lot of big global events. Can you take us through that a little bit?

Robson: Yes, absolutely. So, 2026 is a landmark year for worldwide sports. We've got events like the Winter Olympics, which passed, the World Baseball Classic, which just passed, and then the upcoming FIFA World Cup all taking place this year. And so, sports are really helping to bring the world together. We're increasingly seeing more diversified rosters across pro and college sports. And it's not just global events; the US leagues are becoming more global. So, if you look at the Final Four, which just passed for the men's, UConn was the only team that started five entirely American-born players. The professional leagues in the US are looking to expand internationally. The NFL is continuing to bring the gridiron action overseas. There are ideas floating around for more games in other countries and the potential of a London-based team, perhaps, or maybe even a European division. If you look at the NBA, the past seven MVPs have all been born outside the US, and the NBA is in the process of launching a European league to capitalize on that momentum. The MLB is a very diverse league, with teams often speaking up to three languages in the dugout. So, as a result, the media companies are starting to think more globally as well when it comes to sports rights, and partnerships are being made across borders to bring the action around the globe.

Now, during this section, we were also planning to touch on sports gambling. It was cut for time a little bit, but yeah, that's another big topic that we've addressed in the Sports Report, as the sports gambling situation in the US has gotten complicated, let's say, over the past few years. There's been a rise in prediction markets like Kalshi and Polymarket, and so those who live in non-legal states like myself in California or Texas are now able to place wagers on games. So, a lot going on there.

Reynolds: Alright, before we shift over to the Sports Report, I just wanted to say that Kagan Research Analyst J.P. O'Sullivan was part of the webinar, providing us with some international insights and perspectives. He was unable to be with us today. Anyway, as for the Sports Report, in addition to Scott, Justin, MJ, and JP, Kagan Principal Analyst Schafer and Kagan Analyst Gino Amor also worked on the expansive document. Scott, how long have you guys been doing the Sports Report?

Robson: Yeah, that's a good question. We've been publishing a version of the Sports Report for about a decade now. It started as more of a report on the traditional multichannel industry, where we looked at program spend by genre. We quickly came to the conclusion that sports was a driving force behind that, so we highlighted sports more and more as the years went on until this morphed into a full-on Sports Report. Over the years, we've grown our coverage of sports rights. We began estimating US and now global sports rights spending across companies. We've published more granular data there with different breakouts, and we've expanded our direct-to-consumer section. We've also reduced our focus on linear networks, which is really just a sign of the times.

Reynolds: Makes sense. Obviously, the information is charted day to day over the course of the year, but any sense you can give us as to when you guys, in earnest, say, "Okay, we have to get the Sports Report done now"?

Robson: Yeah, we like to put the Sports Report out around the end of March. It's a very important time for the sporting calendar, with big things like March Madness and the Masters coming up, the start of the baseball season with Opening Day. I think a lot of people are thinking about sports during this time of year, and so we've always had it line up around that timeframe to capitalize on the momentum that is happening because of those other events.

Reynolds: Alright, and as Scott alluded to, a lot of things going on here: popularity of televised sports, US national distributed sports networks, cost to consumers, local sports rights, DTC sports services, sports gambling and prediction markets, and many other topics. Guys, let's talk about a few of the key findings that you worked on in the Sports Report this year. Justin, can you go first?

Nielson: Sure, yeah. Thanks, Mike. I focus primarily on the broadcasters and the local sports rights deals, which have become more relevant in terms of some of these local stations securing rights to teams. In some cases, they have full season packages, like with the Suns in Phoenix or the Utah Jazz or Florida Panthers, and in other cases, they have 10 to 15 game packages where they are able to expand the reach over the air for the fans, as well as support and promote different sponsorships, as well as, in a lot of cases, the direct-to-consumer streaming services that the league or team have launched. So, it is a complementary part of the distribution strategy for professional leagues and teams, and in some cases, colleges. But it has been kind of a reemergence, I would say, of local rights deals happening at the broadcast level because, back in the sixties and seventies, that was the primary distribution strategy — broadcast over the air. So, yeah, I would say from the perspective of the broadcast industry, it has given them a little bit more of a catalyst in terms of growing their ad revenue strategy. And in a lot of cases, these deals are an ad split with the teams. There is a part of it that is included in terms of subscription fees or carriage deals that they may have with the pay TV operators in the market, but in most cases, it's an ad split. So, it is less than what the teams were receiving from the regional sports network, but again, it gives them the opportunity to expand their influence within the local markets, get onsite promotions, help from some of the talent and the hosts that are covering the game, either on the local news hour or actually in the stadium, because a lot of these reporters are calling the games. And then also, you look at it from where the broadcast business in general is going — you've seen some consolidation with Nexstar and Tegna. You may see more consolidation as media ownership rules are relaxed at the FCC and DOJ level. So, it is providing a growth trajectory for the business model.

Reynolds: Alright, Mike, you cover US sports for Kagan. Where were you focused most on with this Sports Report?

Michael Johnson: Yeah, definitely. I focused more on the local coverage aspect of the Sports Report, focused on direct-to-consumer options and things like that. But overall, you know, a few things really stood out when doing the Sports Report this year. Honestly, what blows me away is just how valuable sports are for media companies now. The competition between broadcast, cable, and streaming is really intense, and everybody wants a piece. And it's driving up costs of media rights considerably, and sports have become a must-have for any content lineup. Another thing that jumps out is how fragmented sports coverage has gotten. Streaming is really shaking things up, but it's also making it harder and pricier for fans to keep up with all of their favorite teams and favorite games throughout the year. Locally, I think we'll continue to see a ton of change. As we've been discussing here, teams are ditching the old regional sports network models and launching their own channels and streaming platforms, which is great for access for fans. It definitely shifts the economics a bit. And then, on top of all of that, sports betting and new ways to engage fans like prediction apps and docuseries are adding even more layers to the mix. So, it's a very dynamic and fast-moving time in sports media.

Reynolds: That's for sure. Scott, last word to you — what did you focus on this time around?

Robson: Yeah, so my primary focus has been on the national cable networks and broadcast networks. And so ESPN is always a key topic for us when we are thinking about the Sports Report. And this year, we had a lot to talk about given the launch of the ESPN Unlimited direct-to-consumer service last fall. Aside from that, there's also some other news that maybe fell off the radar for some, and that was NBCUniversal relaunched its NBC Sports Network as a part of the YouTube TV sports-centric skinny bundle. And, you know, that's a big shift for the industry. We also had a rebrand of truTV to include more sports content. So, there are some moves being made by cable network owners that really highlight the importance of sports and sports rights for that industry. And then also, I just want to echo what Mike said in terms of the sports media rights fragmentation — it was a big theme, I think, that sliced through all of our topics this year, just in terms of the leagues bundling games in different ways to try and increase revenue and spread things out across a variety of channels. And then finally, the unbundling of women's sports rights was an interesting topic this year. That was new. So, for years, you look at the WNBA, and that contract was tied with the NBA, and now that's no longer the case. And we're starting to see women's rights as a standalone product. So, another key development there.

Reynolds: Alright. Thank you, guys. That concludes this episode of ”MediaTalk.” Appreciate it, Scott, Justin, and MJ, for sharing their thoughts and insights across these and many other dynamics that are shaping the sports media world today and tomorrow. Appreciate you guys being here again.

Nielson: Thank you, Mike.

Michael Johnson: Thanks, Mike.

Robson: Thanks.

Reynolds: Alright. Before we go, I just wanted to let you know that to access a replay of the sports webinar, you can go to the replay portal at the S&P Global Market Intelligence website. As to the Sports Report, it's more than 6,000 words chock full of charts and insights. It is available on the CapIQ Pro website. This is Mike Reynolds. Thanks to all of you for listening. We'll catch up soon on our next “Media Talk” installment. Bye, everybody.