Original Article: Sports Business Journal, by John Kosner and Ed Desser, October 28th, 2024

What to do today if you’re a sports rights owner who is considering media partners, but you’re not the very biggest and most popular? Each option has benefits and drawbacks — it is all important to understand how to map out your best strategy.

For most of the last four decades, sports media options were broadcast and cable TV, period. These delivered maximum audiences, and usually, the largest potential revenue. National rights were placed on big broadcast and cable networks; local/regional rights on broadcast stations and RSNs. With competition and some luck, you’d generate fair market value. Easy-peasy!

You made those decisions based upon available shelf space, relationships and ability to commercialize. Originally, broadcast was preferred over cable because it maximized exposure. As cable networks grew their “dual revenue streams” (subscriber fees and ad sales), the tide shifted, and cable started to outbid broadcasters. Elite programming migrated to ESPN, FS1, TNT/TBS and NBCSN (RIP). When the internet intervened, sports media crossed the Rubicon with Amazon’s exclusive streaming deal for NFL “Thursday Night Football” two years ago.

Today, choosing a platform is not simple at all:

• To maximize potential audiences, once again look to broadcast networks (as the NBA just did by adding NBC), and/or streamers such as (176 million-plus U.S. subs) Amazon Prime (another recent NBA deal), or (70 million-plus U.S. subs) Netflix (NFL Christmas Day). No cable network by itself, including ESPN, can reach that potential audience size anymore. As they harness their unique and impressive promotional arsenals, Prime Video and Netflix may soon exceed the audience delivery of broadcast networks. Like Apple for MLS, they also offer a one-stop shop for global distribution. However, the biggest broadcasters and streamers remain focused primarily on the major leagues, which are now spread across more smaller packages, while paradoxically, the key techs want to own something.

• If you’re not one of those, but want to generate the most revenue, traditional pay-TV networks are still (and forecast to remain this decade) the biggest spenders on sports rights. They have to be, to defend their affiliate distribution business. Thus, the French Open was worth multiples more to WBD than to incumbent NBC. Revenue is revenue; it can come in cash but also ad inventory, or in-kind (production support, travel services, marketing, etc.).

• If you’re looking to reach younger audiences (see our Sept. 16, 2024, column) for live content, you must start with entertainment networks (formerly known as social media), YouTube and perhaps Twitch and consider Instagram, Facebook, TikTok, Snap and X for clips. These are strictly ad sales/revenue share opportunities. So too are the growing, free ad-supported streaming TV (FAST) channels Tubi, Pluto TV and Roku Channel.

• Since it is no longer possible to reach all fans simultaneously on a single platform, you must redefine your property’s form of “exclusivity.” Discovery of sports content is a major industry challenge. Your app, website and social platforms all require video content to grab attention and serve your fans well. You must be singularly focused on your own community-building. Much of this distribution can be advertiser-supported, but little of it will generate subscriber fees. Together, with multiple feeds, this is the new normal.

• Younger fans favor streaming, and there are many premium options including ESPN+, Peacock, Paramount+, Max, AppleTV+, DAZN, FloSports, and betting platforms such as DraftKings and FanDuel. Digital league packages such as NFL+, NBA TV and MLB.TV are expanding. As RSNs shrink, look for MLB to offer near-comprehensive local offerings. All may also explore third-party content acquisition.

• Locally, everything old is new again. Fewer teams have games exclusively on challenged RSNs; more are shifting to local TV station groups complemented by streaming services. These deals may not ever return the same guaranteed rights revenue, but broader total exposure is possible, with incremental ad revenue plus shares of retransmission consent fees, and other business development as partial compensation for lost rights money.

Indeed, choosing between these myriad options is complicated. If your property is small but has a passionate following, it may be a better fit for VOD streamers that value subscription lift. Not so if you will benefit more from broader free exposure, through ticket sales, event sponsorships and commerce. It’s also critical to understand the strengths and weaknesses of your potential partner(s). Do they have news and entertainment programs that can spotlight your sport beyond games? Can you enlist their ad sales group? If your partner is a tech company, is it committed to sports? What traditional capabilities does it have or lack? Linear networks such as ESPN, TNT and Fox have sports in their respective DNA. That matters, too.

Today, most successful sports properties have transitioned from being just rights sellers to becoming their own executive producers. Remember, more fans will experience your property via media than will ever attend an event. This means not just relying on intermediary licensees to present your product to your fans. Execution in this age of video content abundance is a lot tougher … and … we’re not going back. But this new era allows the most aggressive, creative and able to use emerging technologies to supercharge growth. Lamenting that your media partner does not understand your product or fans never worked, much less now. Recently we’ve seen expanded — and deserved — interest in NCAA women’s basketball, the WNBA and the NWSL, among others. Ten years ago, there was no bidding war for UFC; next year there will be. You must have a plan. As much as things change, some stay the same.

Ed Desser is an expert witness and president of consultancy Desser Sports Media Inc. (www.desser.tv). John Kosner is an investor in digital startups and president of consultancy Kosner Media (www.kosnermedia.com). Together they developed league TV strategy and ran the NBA’s media operations in the ’80s and ’90s.