With platforms proliferating and media consumption fragmenting, sports rights holders face a different negotiating environment.
Speaking at a Dec. 6 panel at the UBS Global Media and Communications Conference, Sports Illustrated reporter Richard Deitsch said there will be rights gains, but not for all properties.
While live sports remain the most valuable property on TV, he believes that only the high-end properties — NFL, NBA and international soccer — will command significant rights increases during their upcoming negotiating cycle, while the rights paradigm will shift downward for those not offering events that yield mass-audience appeal.
Brian Bedol, founder and CEO for Sportsrocket Inc., which provides integrated solutions for production, distribution, management and monetization in the arena, pointed out that the next negotiating cycle for the big sports — NFL, MLB and NBA — will be the first with a declining cable TV universe, a medium that has been a rights driver for the past quarter of a century.
Yet subscriber gains from the virtual multichannel video programming distributors will counter the industry's linear declines, according to Robert Freeman, a partner at Proskauer Rose, which provides an array of legal services for sports leagues and teams. Moreover, he said the networks are receiving higher subscriber fees from these new entrants, which will enable them to replace the lost linear revenue and keep them in line for future rights investment.
"There is still life in the bundle," said Freeman.
Yahoo, Twitter Inc. and now Amazon.com Inc. all have streamed NFL games. Bedol also noted that Facebook Inc. recently announced that it has earmarked "a few billion dollars" for sports rights fees, so traditional broadcast and cable players are likely to face these competitors in the years ahead.
Bedol said rights holders are entering "an exciting and scary period," given media fragmentation. The winners, he said, will be those who "navigate the complexities" of rights negotiations rights across an array of platforms. That likely means more players, and a breakdown in the current system in which networks tend to hold rights across all screens.
Younger people, meanwhile, are consuming sports differently with many preferring to check in on highlights, social media and fantasy action on their phones, as opposed to parking themselves on the couch and watching from first pitch to last. This shift also figures to impact sports rights.
Mark Shuken, president of Pac-12 Networks, envisions opportunities around short-form fare, ranging from 30-seconds to two minutes. He said that point has been hammered home during conversations he and other network executives have had with conference student athletes about their media-consumption habits.
Shuken said rights holders and distributors will have to veer from the way "they have been doing business over the past 30 years and be more agile" in how they exploit sports content. Pac-12 Networks' deal with member schools covering seven networks and 850 live events per school year expires in 2024.
For his part, Deitsch said it would be imprudent to dismiss how loyal sports fans are when it comes to interest in their alma mater or local market teams. He said people may not have the attention spans they once did to sit through a two-hour, regular-season college basketball game, but there is a demand for highlights and other short-form content.
Bedol noted that with enhanced broadband capabilities localism is no longer limited to geography and fans follow players and teams from around the globe. He argued that these are passions that can be monetized.
