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Author Topic: The future of sports media rights  (Read 4645 times)

barfolomew

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The future of sports media rights
« on: May 03, 2016, 11:22:55 AM »
Interesting article retweeted by Friend of Scoop Brewtown Andy:

http://www.sportsbusinessdaily.com/Journal/Issues/2016/05/02/In-Depth/Media-rights.aspx

When the Big East's FS1 deal expires in 2025, it will probably be a very different landscape for rights deals.
Which way will online content providers swing the power, if at all?
Unless there is a massive change in the model in the next few years, I don't see a way for the Big East teams to do better than they are under the current deal. I would hope AD's are preparing for that, anyway.
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Herman Cain

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Re: The future of sports media rights
« Reply #1 on: May 03, 2016, 12:41:47 PM »
Interesting article retweeted by Friend of Scoop Brewtown Andy:

http://www.sportsbusinessdaily.com/Journal/Issues/2016/05/02/In-Depth/Media-rights.aspx

When the Big East's FS1 deal expires in 2025, it will probably be a very different landscape for rights deals.
Which way will online content providers swing the power, if at all?
Unless there is a massive change in the model in the next few years, I don't see a way for the Big East teams to do better than they are under the current deal. I would hope AD's are preparing for that, anyway.
I think the Big East will do fine on the renewal. The league has done well on the court and the double round robin format is starting to build some rivalries and name recognition of the coaches and players.  I expect Mullin will have the Johnnies doing very well and that alone will be a huge benefit for everyone else.

Of course it is possible that the renewal could be on less favorable terms, but I don't expect a radical departure as there will be several bidders. ESPN, Fox Sports, NBC Sports Network etc. CBS Sports Network will also likely take part of the package.
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Mr. Nielsen

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Re: The future of sports media rights
« Reply #2 on: May 03, 2016, 12:54:54 PM »
CBSSN does most if not all of it's content from sub-deals from ESPN and FS1.

The thing to keep an eye on is what the Big 12 does. If UConn is left out from the Big 12, look for the Big East to make a push for UConn.
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GGGG

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Re: The future of sports media rights
« Reply #3 on: May 03, 2016, 12:58:11 PM »
I don't know what ADs are supposed to do now to prepare for this completely uncertainty. 

What's more important is that the conference has a good understanding of what the media picture looks like in the future for the BE and help its members prepare for that. 

MU82

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Re: The future of sports media rights
« Reply #4 on: May 03, 2016, 07:00:41 PM »
Only on Scoop would folks be biting their fingernails as they speculate about the horrors that could happen nine years from now.
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Marcus92

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Re: The future of sports media rights
« Reply #5 on: May 03, 2016, 07:38:10 PM »
Great article. Thanks for posting.

I see no reason to expect a reversal in declining cable ratings. Time Warner and Comcast are facing real competition for the first time in decades. And the pressure will only increase.

Viewers want more options for watching content without having to depend on a cable box. The money follows the demand. Movies and original series were first — but live sports (including college basketball) won't be far behind. Yahoo streaming the first NFL game is just the beginning.
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GoldenWarrior11

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Re: The future of sports media rights
« Reply #6 on: May 03, 2016, 07:57:16 PM »
If there is a genuine concern from the Big East schools about getting only equal money (or even less), then I think you'll see the addition of more schools for media market and content purposes.  It is way too early to tell (or predict) how things will shake out.

I will say Fox has made a huge push to be a competitor to ESPN.  NBC is making an effort to improve its standing.  CBS not far behind.  There are options for conferences/schools (which is something that wasn't very true 10 years ago).  When you have options, you have bidders - and we will definitely have a demand when negotiations come up.  We are in the driver's seat at present.  We just need to continue staying the course.

ChicosBailBonds

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Re: The future of sports media rights
« Reply #7 on: May 04, 2016, 09:20:03 AM »
Great article. Thanks for posting.

I see no reason to expect a reversal in declining cable ratings. Time Warner and Comcast are facing real competition for the first time in decades. And the pressure will only increase.

Viewers want more options for watching content without having to depend on a cable box. The money follows the demand. Movies and original series were first — but live sports (including college basketball) won't be far behind. Yahoo streaming the first NFL game is just the beginning.

With all due respect, they have faced massive competition the last few decades from satellite and Telco.  When I worked at DIRECTV I started when we had around 5 million subs.  When I left, we had 20 million, most of the gains coming from cable firms like Time Warner and Comcast.

Here's the thing, in my opinion many of the same companies you see today are going to be very much around in the coming years and will just own this space as well.  There will be consolidation first.  TWC will be gobbled up by Charter.  If I had to guess, Verizon will buy DISH, or something of that nature.  Comcast will no longer be restrained to sell video on their footprints, and will go national, just as AT&T already does.  All of these companies are going to play in both spaces...or in AT&T's world, 3 spaces (which is why Verizon will have to react).  Very deep pockets and they will buy out some of the SVOD services out there.  Netflix barely makes money.  Hulu still loses their ass and is propped up by their owners...Disney, Comcast and Fox.

As for sports rights, here's where I agree to some extent.  The tipping point will be reached at some point and already has on lesser properties.  If you are NHRA or bowling or fill in the blanks, not good for you.  The elite properties, will still get gains.  What that does to Big East and other college sports, remains to be seen.

The challenge is that most of the big sports rights are owned by companies that have more than just a sports portfolio.  ESPN is not just ESPN, it is Disney.  Disney owns ABC, along with Disney Channel, etc, etc.  That gives them massive leverage.  Same for Fox, same for Comcast (they own a ton of content, also).  So you'll continue to see distributors expand into new areas (SVOD, OTT, Mobility) as well as become content owners, and that will keep many of the companies you see today still very much as the power players.  The unknown will be if Google or Apple ever decides to jump in, but Apple has tried for years and failed at it for years.

LAZER

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Re: The future of sports media rights
« Reply #8 on: May 04, 2016, 09:28:37 AM »
Here's the thing, in my opinion many of the same companies you see today are going to be very much around in the coming years and will just own this space as well.  There will be consolidation first.  TWC will be gobbled up by Charter.  If I had to guess, Verizon will buy DISH, or something of that nature.  Comcast will no longer be restrained to sell video on their footprints, and will go national, just as AT&T already does.  All of these companies are going to play in both spaces...or in AT&T's world, 3 spaces (which is why Verizon will have to react).  Very deep pockets and they will buy out some of the SVOD services out there.  Netflix barely makes money.  Hulu still loses their ass and is propped up by their owners...Disney, Comcast and Fox.

This has always been my thought on it, and a little surprised some of them haven't moved quicker.

Marcus92

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Re: The future of sports media rights
« Reply #9 on: May 04, 2016, 07:36:50 PM »
The main distinction I see is between companies that deliver sports content (cable, satellite) and those that pay rights to produce and broadcast sports (ESPN/ABC, Fox, NBC, et cetera).

The basic delivery model that's held up for the past 30+ years — I'd include satellite in this category, since you need an actual home hookup the same way you do with cable — is being challenged by wireless and streaming technology.

What if the Big Ten network or the NCAA tournament didn't depend on cable/satellite for distribution? It could mark a shift just as big as when cellular companies transformed the long-distance phone market. More competition, more options, an all-around better deal for consumers.

I agree that rights fees for major sports won't continue expanding at double-digit rates. There might even be a short-term pullback. But as long as there's fan interest, and advertisers interested in reaching that audience, there's room for growth.
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ChicosBailBonds

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Re: The future of sports media rights
« Reply #10 on: May 05, 2016, 12:48:11 AM »
This has always been my thought on it, and a little surprised some of them haven't moved quicker.

The simple reason is because it is a race to the bottom and a money loser right now.  Terrible margins, if you're even capable of getting them at all.  At least on a distributor side.  That being said, we're going to become a society of BYOD...bring your own device, and the high costs to deliver video today will be transformed via software solutions.  That's what all the video distributors are doing right now. 

Eventually the economics will make it work for them, but they will have to bundle other products.  It is one of the reasons why DIRECTV was for sale. Despite being an enormous success financially, when you're a one trick pony it was getting harder and harder to compete.  AT&T lacked any real video offering (U-verse was marginalized by geography and connection via copper to the node), but they had a wireless network and deploying more fiber than Google.  So it made sense.  They'll compete in the triple and quad play, where margins are much better.

Interesting times. 

ChicosBailBonds

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Re: The future of sports media rights
« Reply #11 on: May 05, 2016, 12:51:08 AM »
The main distinction I see is between companies that deliver sports content (cable, satellite) and those that pay rights to produce and broadcast sports (ESPN/ABC, Fox, NBC, et cetera).

The basic delivery model that's held up for the past 30+ years — I'd include satellite in this category, since you need an actual home hookup the same way you do with cable — is being challenged by wireless and streaming technology.

What if the Big Ten network or the NCAA tournament didn't depend on cable/satellite for distribution? It could mark a shift just as big as when cellular companies transformed the long-distance phone market. More competition, more options, an all-around better deal for consumers.

I agree that rights fees for major sports won't continue expanding at double-digit rates. There might even be a short-term pullback. But as long as there's fan interest, and advertisers interested in reaching that audience, there's room for growth.

Yes, but how long did it take to tranform that market?  More than a decade.  The infrastructure for video via other means will be there eventually, is there in some pockets, but still has a long way to go for to provide a consistent QOS that consumers expect.  The bigger issue, in my mind, after almost 20 years of doing this is the content owners.  They are in no hurry to lower content costs and as much as people bitch about prices, they keep on buying it in one form or another from those companies.  I say that as a former Walt Disney Co employee....they have printed money for decades.


Marcus92

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Re: The future of sports media rights
« Reply #12 on: May 05, 2016, 08:04:13 AM »
Yes, but how long did it take to tranform that market?  More than a decade.  The infrastructure for video via other means will be there eventually, is there in some pockets, but still has a long way to go for to provide a consistent QOS that consumers expect.  The bigger issue, in my mind, after almost 20 years of doing this is the content owners.  They are in no hurry to lower content costs and as much as people bitch about prices, they keep on buying it in one form or another from those companies.  I say that as a former Walt Disney Co employee....they have printed money for decades.

You're right — it won't happen overnight. And it's not as though the price for phone service has come down exactly. My cell bill today is probably about the same as what I paid for a land line when you account for inflation. But the service, convenience and overall value that cell phones offer (voicemail, email, internet, photo/video, apps) is almost incomparably better.

As for the content providers, I'm still hopeful about the potential for a la carte viewing through technology. When you go to a Disney movie, you don't have to pay for every other movie they've produced that year. But that's basically how cable companies and individual cable channels work.

I don't follow or care about college football, pro basketball, pro or college baseball, pro or college hockey, NASCAR, Indy car racing, golf or soccer. Yet they're a big reason my monthly bill for cable + internet is about $150 a month — almost $2000 a year. That's a steep price to pay for being a Marquette fan, far more than I pay for my season tickets.
« Last Edit: May 05, 2016, 08:07:43 AM by Marcus92 »
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Litehouse

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Re: The future of sports media rights
« Reply #13 on: May 05, 2016, 08:55:51 AM »
What if the Big Ten network or the NCAA tournament didn't depend on cable/satellite for distribution? It could mark a shift just as big as when cellular companies transformed the long-distance phone market. More competition, more options, an all-around better deal for consumers.
The NCAA tourney has been broadcast live online since 2003, and has been free since 2006.

Bocephys

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Re: The future of sports media rights
« Reply #14 on: May 05, 2016, 09:19:15 AM »
The NCAA tourney has been broadcast live online since 2003, and has been free since 2006.

But you have to authenticate through cable providers, so the dependency remains.

Marcus92

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Re: The future of sports media rights
« Reply #15 on: May 05, 2016, 12:02:40 PM »
But you have to authenticate through cable providers, so the dependency remains.

Exactly. Cracks are showing, but the wall hasn't come down just yet.
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rocky_warrior

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Re: The future of sports media rights
« Reply #16 on: May 05, 2016, 12:49:15 PM »
But you have to authenticate through cable providers, so the dependency remains.

Perhaps the contract with CBS/Turner doesn't allow it, but I'm shocked they haven't started selling a "NCAA tournament online package" with price tiers for simultaneous streams.

(for non-authenticated users of course)

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Re: The future of sports media rights
« Reply #17 on: May 05, 2016, 01:01:40 PM »
Perhaps the contract with CBS/Turner doesn't allow it, but I'm shocked they haven't started selling a "NCAA tournament online package" with price tiers for simultaneous streams.

(for non-authenticated users of course)

I would buy this.  Baffles me that they have x hours free + CBS online but no option to buy into the games on cable streams.  Lost revenue for an event that IMO does not sell any cable subscriptions.

Litehouse

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Re: The future of sports media rights
« Reply #18 on: May 05, 2016, 01:30:52 PM »
But you have to authenticate through cable providers, so the dependency remains.
I didn't realize they changed it, it was completely free a few years ago.  The CBS games are still free, and they offer 3 free hours of viewing before you have to log in.
http://www.wired.com/2016/03/stream-march-madness-2016-dont-cable/

Bocephys

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Re: The future of sports media rights
« Reply #19 on: May 05, 2016, 01:39:12 PM »
I didn't realize they changed it, it was completely free a few years ago.  The CBS games are still free, and they offer 3 free hours of viewing before you have to log in.
http://www.wired.com/2016/03/stream-march-madness-2016-dont-cable/

I didn't realize that they offered any of it for free, very interesting.

Agreed that it makes sense to start offering online only packages, but they always run the risk of upsetting their cable/satellite partners.  The NBA lets you buy individual games via twitter now, but they own their own streaming service.

barfolomew

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Re: The future of sports media rights
« Reply #20 on: May 05, 2016, 02:00:13 PM »
I didn't realize that they offered any of it for free, very interesting.

Agreed that it makes sense to start offering online only packages, but they always run the risk of upsetting their cable/satellite partners.  The NBA lets you buy individual games via twitter now, but they own their own streaming service.

I didn't know that either -- I would assume that since it's the NCAA's app, it must have been part of their deal with CBS/TNT/TBS/Tru to be able to offer live streaming.
I'm curious as to what the NCAA gave up to get the broadcasters to agree to that.
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rocky_warrior

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Re: The future of sports media rights
« Reply #21 on: May 05, 2016, 02:12:39 PM »
I didn't know that either -- I would assume that since it's the NCAA's app, it must have been part of their deal with CBS/TNT/TBS/Tru to be able to offer live streaming.
I'm curious as to what the NCAA gave up to get the broadcasters to agree to that.

The contract must be complicated, because I know when I used the FireTV app, it would only let me stream TBS/TNT/TruTV - but NOT CBS.  Weird.

 

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