John Kosner Spoke with Ben Strauss of the Washington Post About the New LIV Golf TV Deal with The CW Network

Original Article: The Washington Post, by Ben Strauss, January 19th, 2023

LIV Golf finally will arrive on American TV.

The year-old upstart golf series announced Thursday that it had secured its first television contract with the CW Network, which will air all 14 of its events in 2023.

The deal is an important step for the viability of the series but also an indication of how far it still has to go. LIV had talks with other networks and streaming services, including Amazon and Apple, but had to settle for a deal with the CW, which does not air other sports properties and is not a traditional destination for sports fans.

“It’s better for them than where they were,” said John Kosner, a former ESPN executive turned industry consultant. “I’d rather be live broadcast on the CW and streamed on their app than just putting my events on YouTube without any kind of promotion. So by definition it has to improve their audience.”

Kosner added: “But at the same time, it’s not likely to move the needle for them. The CW audience is not necessarily a fit for professional golf.”

No financial details were released of what LIV described as a “multiyear partnership.” A person who is familiar with the deal but not authorized to discuss it publicly said LIV will continue to do its own production. There had been some speculation that LIV would buy airtime on a network. The person said that was not the case but declined to go into detail about LIV’s compensation. CW will be in control of selling ads for LIV programming.

In its first season last year, LIV failed to find a television partner, leaving its eight tournaments to be streamed on its website, YouTube and the DAZN streaming service. YouTube viewership was low, even though several popular golfers — including major winners Phil Mickelson, Dustin Johnson, Cameron Smith and Bryson DeChambeau — had left the PGA Tour for the new series, which is funded by Saudi Arabia and has been accused of trying to paper over that country’s human-rights violations.

[From October: Inside the ropes at LIV Golf’s Saudi Arabianhomecoming]

LIV tournaments comprise three rounds, and the CW will offer television coverage for the second and third rounds on Saturdays and Sundays. First rounds on Fridays will stream on the CW app. “The CW will provide accessibility for our fans and maximum exposure for our athletes and partners as their reach includes more than 120 million households across the United States,” Greg Norman, LIV Golf’s chief executive and commissioner, said in a statement.

LIV’s agreement with the CW is the first sports deal for the network in its 16-year existence. Last year, Nexstar Media Group assumed a 75 percent ownership stake in the network — the lowest rated among the five major U.S. over-the-air television networks — from its previous owners, Paramount Global and Warner Bros Discovery, and promised to turn a profit by 2025, in part by reducing expenses.

Despite scripted programming that skews young, the median age for the CW’s prime-time viewer in 2021 was 57.4 years old. Televised golf has long had the oldest viewership among sports in the United States — in 2016, the average golf television consumer was 64 years old — so the CW’s agreement with LIV could be an attempt to provide programming for a demographic that already was watching the network without the costs involved with producing scripted entertainment.

“For The CW, our partnership with LIV Golf marks a significant milestone in our goal to re-engineer the network with quality, diversified programming for our viewers, advertisers, and CW affiliates,” Dennis Miller, president of the CW, said in LIV’s statement.

[From October: For its next stop, LIV Golf looks to take on the world]

The first tournament on LIV’s 2023 schedule begins Feb. 24 in Mexico. LIV events differ from PGA Tour tournaments in that they feature three rounds instead of four, much smaller fields, no cuts and shotgun starts, which means all of the golfers begin at the same time instead of the traditional staggered start. LIV also includes a team competition to go along with individual play, and the winners of both receive sizable monetary prizes that dwarf those awarded at PGA Tour events.

While the series is backed with seemingly endless Saudi oil money, LIV’s future as a viable golf concern may depend on whether its events become recognized by the Official World Golf Rankings (OWGR). While some of LIV’s golfers still can enter golf’s major events because of their status as past champions, the vast majority need to earn OWGR points to maintain their eligibility. LIV applied for OWGR recognition in July, but it generally takes one to two years for the organization to issue a ruling on new members. Without OWGR points, LIV golfers will see their world rankings plummet and their chances of competing in golf’s majors — the most visible tournaments on the sport’s calendar — fall with them.

The PGA Tour has banned all of the golfers who defected to LIV, though as of now they still can compete in majors if they qualify (the PGA Tour does not operate the Masters, PGA Championship, U.S. Open and British Open). Last year, the U.S. Department of Justice reportedly began investigating the PGA Tour for potential antitrust violations, and 11 LIV golfers sued the Tour, accusing it of using a monopoly to squash competition. About two months after the LIV players filed their lawsuit, the PGA Tour countersued LIV, accusing it of interfering with its contracts with players.

John Kosner Spoke with Jessica Toonkel of The Wall Street Journal About YouTube’s Launch of Free Ad-Supported (FAST) Channels

Original Article: The Wall Street Journal, by Jessica Toonkel, January 13th, 2023

YouTube is testing a new hub of free, ad-supported streaming channels, the latest in a series of moves by the company to expand its ambitions in video.

The Alphabet Inc.-owned video platform is in talks with entertainment companies about featuring their shows and movies in the hub of cable-like channels and is testing the concept with a small number of media partners, according to people familiar with the discussions. It could launch the offering more broadly later this year, some of the people said.

YouTube, already a dominant player in online video, is looking to become a go-to destination across various streaming formats and genres. Adding a hub of free, ad-supported streaming TV channels—or “FAST,” as it known in the media industry—would put it in competition with players such as Roku Inc., Paramount Global‘s Pluto TV and Fox Corp.’s Tubi.

The discussions follow other YouTube streaming initiatives, including its recent creation of a marketplace allowing users to sign up for paid streaming services and its deal to pay about $2 billion a year for rights to the National Football League’s Sunday Ticket franchise.

A YouTube spokeswoman said the company is running a small experiment that lets a subset of viewers watch free, ad-supported channels and is using it to gauge viewer interest. “We’re always looking for new ways to provide viewers a central destination to more easily find, watch and share the content that matters most to them,” the spokeswoman said.

YouTube generated $7.1 billion in advertising revenue in the third quarter of last year, 13% of Google’s total ad revenue during the period. The video unit’s ad revenue dropped in the period for the first time since Alphabet started reporting its financial performance in 2020.

Free, ad-supported TV services typically allow users to peruse a list of channels, as they would on cable TV, and dip in and out of content that is already playing. On Pluto TV, for example, viewers can scroll through reruns of shows from “Happy Days” to “South Park” to “This Old House”; rival Tubi also offers a range of fare, such as Samuel Goldwyn Classics, sports highlights and news programs such as Dateline NBC episodes.

It is a crowded but fast-growing area of the streaming business, with more than 20 free ad-supported TV platforms in the U.S., according to S&P Global Market Intelligence. The data provider expects ad revenue from that type of service to rise from $4 billion in 2022 to $9 billion by 2026.

YouTube has discussed taking a cut of ad revenue from the new hub that would be similar to its traditional arrangement with content creators, under which it gets 45% and allows the programmers to keep 55%, some of the people familiar with the discussions said.

Becoming a destination for ad-supported channels makes sense for YouTube given how much success other companies have had in the space, said John Kosner, chief executive of media consulting firm Kosner Media. “Why would YouTube cede ground to Pluto and Tubi and the rest of them?” Mr. Kosner said.

Late last year YouTube launched a new streaming service store called Primetime Channels that lets viewers sign up for subscription streaming services such as Paramount+ and Starz directly through YouTube.

YouTube also offers its own paid streaming service, YouTube TV, which lets users stream a package of major cable channels—from CNN to ESPN—for $65 a month. The NFL Sunday Ticket package will be offered as an add-on to YouTube TV as well as through Primetime Channels.

YouTube also has rolled out short-form videos, called Shorts, as it competes with social media giant TikTok for attention, particularly from younger audiences.

YouTube, which has more than two billion monthly users, accounts for the greatest share of U.S. TV viewing time of any streaming service, according to ratings firm Nielsen. It attracted 8.8% of Americans’ TV viewing time in November, beating Netflix Inc. for the third consecutive month. YouTube TV has at least five million subscribers and trial accounts.

YouTube has begun testing the new hub of free, ad-supported streaming channels with content suppliers, including Lions Gate Entertainment Corp., A+E Networks, Cinedigm Corp and FilmRise, according to people familiar with the tests.

Some streaming executives say the format offers a more relaxed or “lean back” viewing experience than other forms of content in which people actively select the program or film they want to watch. The content available is often comforting fare, “the macaroni and cheese of television and movies,” said Chris Buchanan, president of streaming consulting firm South Medio Partners.

Such services appeal to cost-conscious consumers. “Free is free and in times of economic hardship, free is even more important,” said Danny Fisher, chief executive of FilmRise.

Hollywood studios, smart-TV makers and streaming platforms alike are rushing to create such channels because they offer a way to broaden the reach of their content and make money from shows that might otherwise not be featured in major subscription streaming services.

John Kosner Spoke With Mike McCarthy of Front Office Sports About How ESPN Landed the Dallas @ Tampa Bay NFL Wild Card Playoff Game

Original Article: Front Office Sports, by Mike McCarthy, January 13th, 2023

Since the NFL announced its playoff schedule, the biggest question in sports media has been: How did ESPN land the biggest game of Super Bowl Wild Card Weekend?

The Walt Disney Co. will air Monday’s night Wild Card Weekend finale between the Dallas Cowboys and Tampa Bay Buccaneers across five networks (8:15 p.m. ET on ABC, ESPN, ESPN2, ESPN+, and ESPN Deportes).

The other NFL TV partners paying billions annually for game rights wanted Cowboys-Bucs badly. It’s easy to see why.

The Cowboys are the biggest TV draw in the NFL, playing in four of the five most-watched regular season games this season. Meanwhile, Monday’s game could mark the swan song for Bucs quarterback Tom Brady after seven Super Bowl titles and 23 seasons.

Even better, the prime-time blockbuster is the only NFL playoff game on the calendar Monday, after a doubleheader Saturday and a tripleheader on Sunday. That means the entire country (including the extended NFL family of players, coaches, and executives) will be tuning in.

Last year, ESPN had the Los Angeles Rams-Arizona Cardinals as Wild Card Weekend finale on Monday night. Not bad. But it’s not Cowboys-Bucs.

“The game will generate an epic rating – especially if it’s a close game,” predicted John Kosner, the former executive vice president of ESPN turned founder of the Kosner Media consultancy.

Then again, this is ESPN, the league partner that traditionally brings up the rear when it comes to the best NFL game matchups. 

The partner that’s long been shut out of the Super Bowl rotation despite paying the most. 

The network was prepared to exit the NFL game business entirely under former boss John Skipper.

The Worldwide Leader in Sports has been trying to patch up its previously strained relationship with the league for years. 

In previous seasons, a matchup like Cowboys-Bucs probably would have gone to Fox Sports, which aired five of the ten most-watched NFL games this season. Or CBS Sports, which aired the Cowboys’ Wild Card game against the San Francisco 49ers last year on Sunday at 4:30 p.m. ET.  

Both the NFL and ESPN declined to comment on this story. So we asked Kosner and other sports media executives why ESPN landed America’s Team. Here are five reasons: 

• Makeup Game: ESPN lost the biggest game on its “Monday Night Football” schedule when Damar Hamlin’s shocking on-field collapse caused the NFL to postpone, and eventually cancel, the Buffalo Bills vs. Cincinnati Bengals game on January 2. “They did it to make up for the loss of Bills-Bengals,” said one rival TV executive.

• Troy Aikman/Joe Buck: ESPN recruited Troy Aikman and Joe Buck from Fox to create a new “Monday Night Football ” announce team with Lisa Salters and John Parry this year. With six Super Bowls and over 300 games, they’re the longest-running broadcast team on NFL TV. ESPN will pay the duo $165 million over the next five years. But they’re already paying dividends. The new booth helped ESPN land a more robust MNF game schedule this year and its first two Super Bowls after the 2026 and 2030 seasons.

• Peyton/Eli Manning: As if the new MNF announce team isn’t a big enough draw on ESPN and ABC, ESPN will offer the funny, free-wheeling Manning brothers with their “Manning-Cast” on ESPN2. Both versions of the game will be available on ESPN+. 

• Jimmy Pitaro/Burke Magnus: Ever since former Disney executive Jimmy Pitaro got the top job in Bristol three years ago, the ESPN chairman and president Burke Magnus have made it their mission to fix the broken relationship with NFL brass on Park Avenue. It’s working. The two executives have done “a superb job” improving the NFL relationship, noted Kosner.  

• The Disney Factor: ESPN’s NFL relationship has really become a Walt Disney Co. relationship. Over the last few years, the Burbank-based entertainment giant has become increasingly tight with the NFL. 

No company can “flood the zone” like Disney when it wants to. Consider ESPN’s Super Bowl-like coverage plan for Cowboys-Bucs.

ESPN will offer fans in Tampa the chance to attend live versions of “First Take,” “NFL Live,” and “Monday Night Countdown.” 

On Sunday, sister Disney networks FX, FXX, and Freeform will run a 12-hour marathon of football programming, including movies like “Remember the Titans,” “The Blind Side” and “Invincible.”  

During’s Monday’s episode of “First Take,” Stephen A. Smith, Ryan Clark, Michael Irvin, and Molly Qerim offered “props” to Aikman and Buck for helping them land the Big Game.

“We salute you,” said Smith.

John Kosner Spoke With Ben Mullin of The New York Times About Google / YouTube’s Acquisition of NFL Sunday Ticket Rights

Original Article: The New York Times, by Ben Mullin, December 22nd, 2022

For years, live sports has been the last stitch holding the cable television bundle together even as more major games moved to streaming services. Apple snatched up Major League Baseball games. Amazon scored Thursday Night Football. But the National Football League’s Sunday games, a centerpiece of American sports, have remained defiantly tied to traditional TV.

Until today.

On Thursday, YouTube and the National Football League announced that they had reached a deal for the N.F.L.’s Sunday Ticket package of games, as the tech giants Apple, Amazon and Alphabet, which owns YouTube, use their deep pockets and huge platforms to transform the business of live sports rights.

“I think it’s a seismic deal,” said John Kosner, a former ESPN digital executive and the chief executive of the media consultancy Kosner Media. “With this deal, the three major sleeping giants have all woken up.”

The deal will allow YouTube viewers to stream nearly all of the N.F.L. games on Sunday next season, except those that air on traditional television in their local markets. Games will continue to be available on other networks throughout the week, including Monday night games on ESPN and ABC and Thursday evening games on Amazon’s Prime Video service.

The games will be available as an add-on for an additional fee to YouTube TV, the company’s $64.99 streaming package, or available for purchase separately through its YouTube Primetime Channels, another product.

The new Sunday Ticket deal could be worth as much as $2.5 billion annually, including payments from YouTube and separate agreements to license the package to businesses including bars and restaurants, according to people familiar with the negotiations. That’s about $1 billion a year more than DirecTV, the previous rights holder. The deal includes payments based on the number of YouTube subscribers that Google is able to add, as well as other performance benchmarks, the people said.

YouTube struck a seven-year agreement for Sunday Ticket, one of the people said, a long-term deal to give Google time to build its subscriber base. DirecTV also agreed to long-term deals.

“For a number of years we have been focused on increased digital distribution of our games, and this partnership is yet another example of us looking towards the future and building the next generation of N.F.L. fans,” Roger Goodell, the N.F.L. commissioner, said in a statement.

Still, a major chunk of N.F.L. games will be exclusive to traditional television for the next decade. Last year, the league struck decade-long deals with major U.S. TV networks, including Fox, ESPN, CBS and NBC. In recent years, the league has tried to generate extra income by selling streaming rights separately.

RedZone, a popular feature that allows fans to monitor Sunday games when teams get within scoring range, will no longer be available on DirecTV, but the N.F.L. will continue producing its own version of the broadcast, according to two people familiar with the matter, who spoke on condition of anonymity because they were not authorized to speak publicly. That feature will be available to users through cable providers, such as Comcast, or through their Sunday Ticket subscription on YouTube.

In recent months, the league explored selling a stake in the N.F.L. Network, its media arm, as part of the Sunday Ticket package. Those talks did not result in a deal, and the N.F.L. will continue those talks, the two people familiar with the matter said.

Robert Kraft, the owner of the New England Patriots and chairman of the league’s media committee, said the N.F.L. had used emerging technology for decades to reach fans, including cable and satellite TV. He added that YouTube would also provide N.F.L. fans with seamless access to game statistics and fantasy football results.

“Now, it’s time to move to a new platform to reach younger fans and YouTube makes the most sense,” Mr. Kraft said.

The Sunday Ticket package could prove to be a boon to YouTube, which has been keen to expand its subscriptions as its main business — advertising — has stalled. Football games could draw more sports fans to YouTube TV, which is already the most popular internet-based pay-TV service. The company said in July that it had five million subscribers, surpassing Hulu + Live TV.

YouTube gets the bulk of its revenue from advertising on videos uploaded by users. Stubborn inflation and a slowing economy have prompted advertisers to pull back spending, causing YouTube’s ad sales to contract almost 2 percent in the past quarter, Google’s parent company, Alphabet, reported in October.

The disappointing results have given more urgency to a yearslong plan for YouTube to expand in other ways. The company said in November that it had 80 million paying subscribers for its music and ad-free premium services, up from 50 million a year earlier. YouTube said this year that YouTube TV had more than five million paid and trial users.

“YouTube has long been a home for football fans, whether they’re streaming live games, keeping up with their home team or watching the best plays in highlights,” Susan Wojcicki, the chief executive of YouTube, said in a statement.

The deal culminates years of industry speculation over who would land the coveted package of games that began in 2019 when John Stankey, who was the chief operating officer of DirecTV’s former owner, AT&T, said the company was rethinking its deal for Sunday Ticket.

It became clearer that the package would go to a tech company in July when Mr. Goodell, the N.F.L. commissioner, said in an interview that a streaming service would be “best for consumers.” Apple, Amazon and YouTube emerged as the likeliest candidates, and all three companies vied for the rights.

Recently, Apple — long considered the front-runner — decided to drop its pursuit. As the negotiations stretched on, Apple became skeptical that the Sunday Ticket package was worth what the N.F.L. was seeking and ended serious conversations about a potential deal, a person with knowledge of the deal said.

Apple instead homed its focus on completing a deal to sponsor the halftime show for the 2023 Super Bowl, which it believes will raise the profile of its Apple Music service.

YouTube, on the other hand, resumed the negotiations after Thanksgiving, and the companies hammered out a deal within weeks.

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Tripp Mickle contributed reporting.

Benjamin Mullin is a media reporter for The Times, covering the major companies behind news and entertainment. @benmullin

Ken Belson covers the N.F.L. He joined the Sports section in 2009 after stints in Metro and Business. From 2001 to 2004, he wrote about Japan in the Tokyo bureau. @el_belson

Nico Grant is a technology reporter covering Google from San Francisco. Previously, he spent five years at Bloomberg News, where he focused on Google and cloud computing. @nicoagrant

John Kosner Spoke with Mike McCarthy of Front Office Sports about the NBA’s Next Media Rights Deal

Original Article: Front Office Sports, by Michael McCarthy, October 15th, 2022

Hi, this is Mike McCarthy, Senior Writer at Front Office Sports! Sports media just reached an inflection point.

In the span of a few weeks, Amazon Prime Video took over exclusive coverage of the NFL’s “Thursday Night Football” and Apple TV+ streamed a historic New York Yankees game. And guess what? Despite a few hiccups, the sky didn’t fall. Most viewers adjusted. That brings us to the NBA, which tips off Tuesday.

The league will shortly begin talks for its next billion-dollar set of media rights. The closely watched negotiations will likely pit linear incumbents ESPN and TNT against streaming giants Amazon and Apple in a bidding war.

Let’s dive in. You can find me after on Twitter.

Would The NBA Embrace Streaming for $100B?

Darren Yamashita-USA TODAY Sports

Twenty years ago, the National Basketball Association transformed the sports media landscape by moving most of its games from free over-the-air television to pay cable networks.

The question now is whether the league will spark another seismic shift by embracing the brave new world of streaming TV.

The NBA’s expected to seek upward of $75 billion for its next media rights package starting in 2025. It boasts rising superstars like Ja Morant and Jayson Tatum, a tech-savvy audience, and global appeal.

• On the other hand, its cable-heavy distribution model is under heavy pressure from cord-cutters in the U.S. as younger consumers shift to streaming services.

• Under current deals that run through the 2024-25 season, Disney’s ABC/ESPN and Warner Bros. Discovery’s TNT are paying a combined $24 billion, or $2.6 billion annually.

As the new season tips off in San Francisco and Boston on Tuesday night, the league’s media strategies could be coming full circle.

Back in January 2002, ESPN was the insurgent that sold the NBA on moving mostly to cable from broadcast — ending the 12-year run of the popular “NBA on NBC,” which brought us Michael Jordan’s dynastic Chicago Bulls, Bob Costas, and John Tesh’s “Roundball Rock” theme song.

Now the tables have turned. It’s ESPN and TNT, and their legacy media parents, that will have to play defense against Amazon and Apple, as well as possible contenders like Google.

And don’t count out sports betting giants like FanDuel and DraftKings, that want to create a “watch and bet” environment that includes in-game wagering.

The Tradeoff

Despite their bottomless pockets, the tech giants will have to prove that the NBA won’t lose most of its audience by moving a large percentage of its national games to streaming.

If you think the bidding was lucrative two decades ago, you ain’t seen nothing yet.

“I would say that all of the leading technology companies are interested in the NBA. Amazon is just one of them. I think Apple, I think Google. All of them,” said John Kosner, former NBA and ESPN executive turned media advisor and the founder of Kosner Media.

“And keep in mind the definition of what’s a ‘rights package’ going forward doesn’t have to be what we grew up with,” he added. “A company like Discord (a social platform with 150 million monthly users) could become an NBA rights holder at some point, too. I think they’re all interested.”

• This season, Disney will air 82 games on ESPN and 18 on ABC, as well as the NBA Playoffs and NBA Finals.

• ESPN boss Jimmy Pitaro has made it clear he wants to stay in business with the league.

“It’s an incredibly important property for us. We also see that property as ascending — younger demographics. Right now, I think they have more parity than we’ve seen in a long time,” Pitaro told The Athletic. “We see young stars who are starting to catch on in the zeitgeist. We are incredibly excited about the NBA.”

NBA Game-Changer

The stakes are high for the $10 billion league as it tips off its 76th season.

The NBA’s pioneering embrace of cable TV two decades ago sparked a migration of sports properties from traditional networks.

• The NFL’s first primetime showcase, “Monday Night Football,” shifted to ESPN from ABC in 2006.

• A year later, Major League Baseball’s first-round playoff games were shown exclusively on cable TV (TBS) for the first time.

• College football’s former Bowl Championship Series moved to ESPN from ABC and Fox Sports in 2011.

The NBA never completely abandoned free TV — ABC has aired the NBA Finals, as well as select weekend matchups, since 2003.  

But the ability to pocket higher rights fees from cable operators was the primary reason why sports leagues like the NBA and MLB moved the bulk of their games to cable. 

ESPN offered a dual revenue stream from both advertisers and subscribers. Broadcasters like NBC (reliant only on ad revenue) couldn’t compete. 

NBC’s Dick Ebersol lamented at the time, ”In the future it will become almost impossible for broadcast television sports to match the power of those subscriber fees.”

History Repeats?

Cord-cutting has significantly slashed the footprint of pay cable operators. During fiscal year 2021, for example, ESPN’s distribution shrank 10% to 76 million U.S. homes — a 24% drop from a high of 100 million a decade ago.

Cash-rich Amazon and Apple are expanding into live sports with each boasting market capitalizations of over $1 trillion.

Amazon is paying the NFL $1 billion a year to serve as the exclusive carrier of “Thursday Night Football” through 2033.

• The deal marks the first time the NFL sold an exclusive national rights package to a digital streaming service.

• “TNF” previously aired across a “tri-cast” of Fox Sports, NFL Network, and Amazon.

• Separately, Amazon Prime also scored a package of 21 New York Yankees games in the team’s home TV market.

Meanwhile, Apple signed a $2.5 billion, 10-year deal to exclusively show all Major League Soccer matches — and is slowly moving into baseball, too.

• Starting in 2023, Apple’s streaming service will take over all local and national MLS games currently carried by ESPN, Fox, Twitter, and regional sports networks.

• In March, Apple and Major League Baseball agreed to a streaming deal that pays the league an estimated $85 million a year for a package of “Friday Night Baseball” games.

• In its first season streaming MLB, Apple exclusively scored a key New York Yankees game at the height of Aaron Judge’s home run record chase.

Google is said to be pursuing the NFL’s Sunday Ticket package of out-of-market games, along with Apple, Amazon, and Disney. 

The league wants the winning bidder to cough up $2.5 billion annually — a big spike from DirecTV’s $1.5 billion. The NBA sees the value of its media rights increasing, too.

Silver Holds the Cards

With Amazon in the mix, the NFL scored its long-term $100 billion-plus media rights payday last year. It’s the NBA’s turn now.

Adam Silver’s NBA is the most tech-forward league, and the savvy commissioner has plenty of options as he looks down the road.

The league could re-up with ESPN and TNT for linear TV while selling an exclusive streaming package.

Or it could roll the dice and embrace a streaming model the way it went mostly cable TV 20 years ago. It’s not implausible — the NBA already has a $1.5 billion per year streaming deal with Tencent Holdings in China.

The Answer Is Always Money

The late, great sports TV producer Don Ohlmeyer used to say, “The answer to all your questions is money.”

It remains to be seen whether a bet on streaming will pay off like the NBA’s gamble on cable.

But given the Association’s history of bold moves, don’t be surprised if the league makes a fast break toward what it sees as the media future of sports, especially if embracing non-traditional platforms gives it a shot at NFL-level media rights revenue — the coveted $100 billion figure.

That could mean doing business with Amazon, Apple, or Google. Either way, these negotiations won’t be a lay-up for ESPN and TNT.

Look for a bidding war that will go right down to the buzzer.

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Original Article: Front Office Sports, by Michael McCarthy, October 10th, 2022

Amazon is off to a strong start with the NFL’s “Thursday Night Football.” Given its early success, the e-commerce giant is making the case that it can take on the next mega sports rights package: the NBA.

The NBA’s current U.S. media deals with Disney’s ESPN/ABC and Warner Bros. Discovery’s TNT expire after the 2024-25 season.

The league will likely seek $50 billion to $75 billion for its next multi-year package, said sources. Amazon is paying the NFL around $1 billion a year to exclusively stream TNF through 2033.

Amazon has long been cited as a potential NBA bidder. But every week it defies expectations with TNF, that theory becomes more of a reality.

“The (NBA) has certainly done very well for a long time with ESPN and Turner. But interest in the league — and its strategic importance — are only growing,” said John Kosner, the former NBA and ESPN executive turned investor and advisor.

Commissioner Adam Silver’s NBA is the most technology-forward sports league. Amazon believes TNF’s better-than-anticipated performance — and built-in audience of over 200 million Amazon Prime customers — makes it attractive to the global NBA, said sources. 

• By Nielsen data, TNF is averaging 11.3 million viewers — up 11% from the first four games last year across NFL Network and a tri-cast of Fox Sports, NFLN, and Amazon.

• By its own metrics, Amazon Prime Video is averaging 13.3 million viewers for TNF through four games.

• Amazon is proving it can draw a harder-to-reach audience: TNF viewers are eight years younger (46 years old) than those on TV networks.

• TNF is averaging 2.7 million viewers in the advertiser-coveted 18-34 demographic, up 67% from last year.

The NBA has already embraced streaming in China. The league boasts a $1.5 billion-a-year deal with Tencent Holdings that enables it to reach over 500 million basketball fans in China. 

Similar to the U.S., that rights deal runs through the 2024-25 season.

Big Tech vs. Legacy Media

The NBA surpassed $10 billion in revenue for the first time with the 2021-2022 season. Jeff Bezos’ Amazon won’t get the NBA without a fight. ESPN and TNT will battle to retain their packages, said sources. 

The two companies will pay the NBA a combined $24 billion under the current nine-year deal, which kicked in during the 2016-17 season. 

It’s still to be determined how the NBA will split up the next rights package. Sports betting giants will also be looking to carve off a piece of NBA media rights to create a “watch and bet” environment, said sources.

With a bidding war looming between tech and TV competitors, the NBA’s almost certain to double its current rights fees to at least $50 billion, said sources. 

That would jack up its annual media payout to the $5 billion range from the current $2.6 billion. ESPN pays $1.4 billion vs. TNT’s $1.2 billion (ESPN’s sister Disney network ABC gets exclusive rights to the NBA Finals). 

But the bidding could go even higher. CNBC previously reported the NBA could seek $75 billion for its next rights package. Amazon and the NBA declined to comment.

John Kosner spoke with Ben Mathis-Lilley, author of “The Hot Seat: A Year of Outrage, Pride, and Occasional Games of College Football,” for the NY Times.

Original Article: The New York Times by Ben Mathis-Lilley, August 27th, 2022

It is, let’s say, 8:43 p.m. on a Saturday. You are watching a college football game that is taking place at this hour despite being played in the Midwest in November, and the people in the stadium, which is not entirely full, look very cold and a little put off. The season schedule said kickoff was at 8 p.m., but it didn’t actually take place until 8:18. In the 25 minutes that have elapsed, play has been interrupted for three commercial breaks. Each advertisement shown during these breaks has been for pickup trucks.

The announcers have just begun a discussion of your team’s head coach, and his alleged inability to win “big games,” which is indistinguishable from identical discussions held by other announcers in each of the team’s nine previous contests.

You will continue watching this broadcast until it ends at 11:47.

Why? Because you are a college football aficionado and the bond between you and the team you support is an idiosyncratic one that is hard to extinguish.

In an era in which television ratings are in decline, the aggregate live-audience demand to which you contribute — some teams can bring in more than three million viewers every week, on average — is valuable for the multinational corporation broadcasting the game. This demand lasts through the season, which begins for most teams this weekend and runs through, if you are lucky, January of next year. It is not necessarily affected by the quality and care with which the broadcast has been produced.

You are a case study in the consolidation of modern media: It can still be hugely lucrative to provide you with an experience that, in many respects, you find insulting.

As both a professional journalist and an expert on watching college football, I felt obligated to explore such matters while researching my forthcoming book “The Hot Seat,” from which this article is adapted. The book tells the story of overenthusiastic modern college football fandom through the 2021 Michigan Wolverines (average weekly viewership: 4.74 million) and their divisive coach, Jim Harbaugh. I took my responsibilities so seriously that I often asked my wife to mind our three children during the team’s games so I could observe and consider the state of televised sports with the clearest possible mind. (She often declined.)

I also spoke about the subject with John Kosner, a former ESPN executive who helped oversee college sports at the network in his 21 years at the company, owned by Disney, and now runs his own sports media business. Mr. Kosner grew up in New York and became a fan of college football because it was, in his words, “so different from anything I experienced.”

But what college football is now is far from what he first started watching regularly in the 1970s. There is much more of it on television, for one thing. And each school and conference wants, understandably, to maximize its earning potential in a competitive environment. (A 1984 Supreme Court ruling forbade the N.C.A.A. from single-handedly controlling its members’ TV rights.) It’s an arms race of commercial breaks.

“You’re making deals at the demand of these conferences and of the media companies you work for and it’s a competitive arena,” Mr. Kosner said. “You might decide, ‘Gee, this is terrible. We shouldn’t do this.’ But if you decide not to make a deal, someone else is going to make that deal.”

This is true. Big Ten games have been broadcast on ESPN and ABC for years, but the parties were unable to come to terms on a renewal of their relationship. The seven-year, $7 billion agreement the conference announced this month is with Fox, CBS and NBC instead. Disney still dominates college football, having televised 41 of 2021’s 44 postseason bowl games. In 2020, it secured exclusive future rights to broadcast the Southeastern Conference, whose teams are more successful on the field than the Big Ten’s and almost as popular.

“What happens is the conference is saying, ‘OK, we want more for our rights, or we want $25 million for the championship game,’” Mr. Kosner said. “And the answer frequently is, ‘We want to expand the commercial for that.’ And they say, ‘OK.’” In response to questions about how long games now take — up to four hours with all the scheduled breaks — and whether this tangibly affects the live experience, an ESPN spokeswoman noted that many factors affect the length of a game, including the style of play, replay reviews and advertising.

“Commercial breaks are a standard part of every televised sport and are a major element of media companies recouping their significant investment,” the spokeswoman said. Michigan’s 2021 season was unexpectedly redemptive, but in the years prior the team’s supporters were subject to relentless, hurtful reminders on game broadcasts that, as head coach, Mr. Harbaugh had never beaten Ohio State, had a poor record against elite teams in general, and had failed to win a Big Ten championship. A Tampa-based sports TV expert, former Deadspin editor and archivist named Timothy Burke helped me compile transcripts of 43 Michigan football broadcasts aired between 2018 and 2021; there were at least 31 comments about Mr. Harbaugh’s not having beaten Ohio State in the file, and I excluded the actual games against Ohio State from my search.

Coach Harbaugh’s purported overratedness was a favorite subject not just during games but also on ESPN’s original programming. One of the network’s college football pundits, Paul Finebaum, has described him as “the most overpaid coach in college football history,” “stunningly embarrassing,” “an idiot,” “a colossal failure” and “a total fraud.” As Mr. Finebaum noted with enthusiasm, until last season, Michigan had never made the College Football Playoff — the four-team championship system that began in 2014, to which ESPN has exclusive TV rights.

Mr. Finebaum wasn’t the only person on ESPN from whom one heard about teams that had succeeded or failed by making or not making the College Football Playoff on ESPN. According to an article in The Athletic, the C.F.P. was mentioned 27 times during one three-hour December 2020 episode of “College GameDay,” the network’s flagship news and discussion show for the sport. Nine promos for the Playoff ran during a 2021 bowl game I happened to watch. (Fine: It was the Cheez-It Bowl. I watched the entire Cheez-It Bowl.)

But what recourse do fans have? ESPN is increasingly the only game in town, which reflects the hollowing out and nationalization of the media more broadly.

Daily newspaper circulation in the United States has fallen to 24 million from 62 million in the past 50 years, according to the Pew Research Center. There were about 80,000 newsroom employees in the country combined between newspapers and the internet in 2008, according to Pew, and by 2020, that number fell to 49,000.

In the athletic realm, Sports Illustrated has been controlled since 2019 by a company that has variously called itself TheMaven, Maven and The Arena Group, and whose central project as owner of the magazine seems to have been to attach its brand name to team-specific sites run by individuals who don’t necessarily have journalism training. (“College football is on fast approach,” begins a recent post on one of those sites.)

ESPN, for its part, employs some of the best reporters and commentators in the industry, but is cutting them at an alarming rate. About 100 newsroom contributors were terminated in a single day in 2017, and more were dropped during the pandemic. One way ESPN fills its schedule now is with so-called hot takes: This is the five hours of weekday broadcasts filled with talking heads — opinionated journalists and ex-players — airing their hyperbolic and provocative views.

Fox Sports — which is part of the Murdoch-controlled Fox Corporation — is nominally a competitor of ESPN’s, but it may be more accurately described as an imitator. About five years ago, the company laid off nearly all its writers and reporters and hired away a number of ESPN talking heads and the top producer of ESPN’s talk shows. Fox’s lineup can feature six daily hours of the discussion (i.e. argument) format.

One of the top ESPN-to-Fox personalities is a longtime radio host named Colin Cowherd, who once noted, in an almost admirably honest interview with Bryan Curtis of The Ringer, that “in my business, being absolutely, absurdly wrong occasionally is a wonderful thing.” He also said he constantly tells one of his friends in the industry that “there’s no money in right,” and concluded a rumination about whether he’d been wrong about the subject of that day’s show — his accusation that a particular quarterback didn’t prepare enough for games — by asking, “Who cares?”

Wrong on purpose is not necessarily a bad strategy. Opinion stories are disproportionately represented at the top of news sites’ most-shared lists, and internal Facebook memos made public in the fall of 2021 revealed that the company had been rewarding outside content that users reacted to with the “angry face” emoji with better placement in news feeds. Executives and producers further emphasize characters and story lines they believe will be especially divisive: Tim Tebow, LeBron James and whether he chokes or is better than Michael Jordan, the Dallas Cowboys in general, and so on. “I was told specifically, ‘You can’t talk enough Tebow,’” the pundit Doug Gottlieb said after leaving ESPN in 2012.

Disney knows the value of a captive, excitable audience — in addition to its sports rights, it owns the Star Wars universe, Marvel comic book characters and Pixar, among other things. Disney’s profits jumped 50 percent in 2021. The financial information firm S&P Global Market Intelligence estimates that ESPN makes more than $8 a month from each of its nearly 100 million cable subscribers; it estimates that the most lucrative cable channel that doesn’t show sporting events, Fox News, makes about $2. There are 16 scheduled commercial breaks in national college football broadcasts, which can last as long as four minutes each.

Curious as to whether this feeling of oppression by a cultural monopoly might be addressed by the kind of legal remedies more typically associated with companies that make steel beams and computer software, I spoke to a University of Michigan law professor and antitrust expert named Daniel Crane.

He was open to the idea that my lengthy complaints about commercials and hot takes were evidence of “quality degradation,” that being one of the typical consequences for consumers of a monopolistic market. (The others are rising prices, diminished innovation and reduced output. Mr. Crane, for the record, says that if he’s not at a Michigan game in person he usually listens on the radio.)

But he cautioned that simply being a monopoly doesn’t mean anything has to change. “Unless you can show that they have obtained or maintained their monopoly through anticompetitive means,” he said — and despite the allegations mentioned above, no litigant or regulator has formally done that — “it’s just kind of too bad. ”

What’s more, he added, the law doesn’t really care that to fans of a particular team, changing the channel to watch another game isn’t the same as switching to a different brand of dish soap.

Reporting which preceded the Big Ten’s recent contract suggested that college administrators had themselves become uneasy with the amount of control that ESPN and Disney had over their sport. Whether this will ameliorate the quality degradation remains to be seen. Certainly none of the news releases about the deal that I have read mentioned anything about reducing the duration of commercial breaks.

Is this a silly thing to worry about? Yes and no. On the one hand, college football is not as materially crucial of an issue as, to take two examples, climate change and cancer. On the other, like all cultural narratives, highbrow and low, it has an intangible but foundational importance to the lives of those who use it to define their social communities and to explain their personal origins and values — to understand how life works, basically.

Karl Marx held that alienation is the condition people experience when they have no autonomy over something personally or socially meaningful to them because it is subject to the power and incentives of accumulated capital. I believe I embody the concept, as so defined by Marx, when I am watching five to eight consecutive commercials 16 times during a college football broadcast so that Disney shareholders and Rupert Murdoch might benefit.

Mr. Crane’s advice to unhappy viewers, informed by the success that European soccer fans had in killing a consolidated “Super League” proposal in 2021 by exerting pressure through political channels, was to pursue activism at the local level — to create a headache for university presidents, regents and others who actually have the leverage to tell a TV network to cool it.

But what makes the situation tricky is that fans have an incentive to want their schools to sell out too. The essence of college football’s hold on its audience is that it asserts a particular school, state or region’s status and relevance in a way that no other activity, even any other sport, can.

To choose not to have the financial resources other schools might be availing themselves of, to walk away from the prime-time slot, would be contrary to the entire enterprise. I do a great deal of whining about announcers, but when Fox analyst Joel Klatt said (to Colin Cowherd!) that the atmosphere during Michigan’s 2021 win over Ohio State in Ann Arbor was “the best environment I’ve ever been at, in any sport,” I was proud. Thanks, Joel!

When I spoke with Mr. Kosner, the former ESPN executive, he recounted the stakes of a Thanksgiving 1971 game between Nebraska and Oklahoma that he remembered watching. “It had everything,” he said. “It was everything you would imagine from middle of the country, a super-rivalry between states.” (I think he is right that a football game between Oklahoma and Nebraska would have been the exact conceptual opposite of 1970s New York City.) “That game doesn’t happen anymore because Nebraska chose to go to the Big Ten,” he said wistfully.

Of course, as he recognized, the reason Nebraska joined the Big Ten was so it could reap the rewards of consolidating its brand with those of other national draws like Michigan, Ohio State and Penn State. That choice was offered to the school by executives like John Kosner, and was accepted enthusiastically. Nebraska averaged 2.29 million viewers a week last season, and there’s no going back.

John Kosner spoke with Jon Wilner of Pac-12 Hotline about Conference TV negotiations

Original Article: The Mercury News, by Jon Wilner, July 20th, 2022

The Pac-12 lost its marquee football and basketball programs, its biggest media market and the links to its main recruiting pipeline three frenetic weeks ago. Since USC and UCLA made their flight plans known, the conference has been portrayed as everything from fragile and fractured to a carcass on the savanna awaiting vultures from the Big Ten and Big 12.

But the dire predictions seemingly overlook one important element as the conference negotiates a new media rights package: The Pac-12 offers ESPN something no other Power Five league can match.

A steady supply of night games.

“The beauty of the Pac-12 is you can program that late (Saturday) window for 13 consecutive weeks,’’ said John Kosner, a sports media consultant, president of Kosner Media and former executive vice president/digital media at ESPN. “It takes a conference to do that, because it’s hard for individual schools to play more than a handful of those games each season.

“Let’s say you get practically a 1.0 rating and 1.5 million homes on average per (night) game. That’s considerable audience delivery for 3.5 hours every Saturday. That’s very hard to replace. “It’s hard to take something away from somebody. The fact that the Pac-12 has been on ESPN for a long time — it’s part of the firmament there.” In a twist worthy of #Pac12AfterDark, the reviled night games could play a vital role in the conference’s survival.

Yes, Larry Scott got something right.

“Nobody else can fill those time zones,” said Ed Desser, the president of Desser Sports Media and former executive vice president for strategic planning/business development at the NBA. ESPN’s college football programming template features five windows: College GameDay at 8 a.m. (Eastern), followed by kickoffs at 12 p.m., 3:30 p.m., 8 p.m. (primetime on ABC) and late night.

While the late games (10 or 10:30 p.m.) lose audience when fans in the eastern half of the country go to bed, they still carry significant value for ESPN because of their unopposed nature — no other Power Five games are being played — and the 12-hour cross-promotional opportunities baked into earlier programming on ESPN.

That gives the Pac-12 an advantage over the reconfigured Big 12, which will have only one team (Brigham Young) in the western half of the country, home to 75 million people.

“I’d argue that if ESPN lost the Big Ten, it would have the Big 12, ACC and SEC games for the Eastern and Central time zones,” Kosner said. “But without the Pac-12, it doesn’t have the Mountain and Pacific time zones. “It can’t get those games any place else.”

One motivation for ESPN as it ponders a new contract with the Pac-12: affiliate fees.

The network generates immense revenue from the fees it charges distributors (DISH, Comcast, etc.) to carry its programming. Those distributors, in turn, need content that appeals to audiences in major media markets in order to drive monthly subscriptions. “College football is an important part of ESPN’s lineup,” Desser said. “Affiliate revenue doesn’t go up or down, it’s based on the programming you have acquired. ESPN has a bunch of affiliates on the West Coast, and having the Pac-12 goes a long way to making them happy.”

Not only is the Pac-12 unique among the Power Five in its ability to fill the late windows for ESPN’s affiliates, the local markets are substantial. The 10 remaining schools account for six of the nation’s top 30 media markets, according to Nielsen DMA data from 2021:

• No. 6 Bay Area

• No. 11 Phoenix

• No. 12 Seattle

• No. 16 Denver

• No. 21 Portland

• No. 30 Salt Lake City

“You cannot replace the ratings with the Mountain West,” Kosner said. “ESPN’s affiliates on the West Coast are used to having the Pac-12.”

There’s additional value for ESPN in a region of the conference you might not expect.

While Cal and Stanford have struggled on the field and don’t drive big ratings, they reside in a huge media market that includes Big Tech firms with executives who attended Pac-12 universities and follow the conference.

“The Bay Area audience is influential,” Kosner said. The late windows are so essential to the Pac-12’s media valuation that Kosner believes Thursday and Friday games “are prime opportunities” to explore with future network partners. Theoretically, commissioner George Kliavkoff could offer ESPN a premium matchup each Saturday night and a secondary game every Thursday or Friday, giving the conference at least 26 night broadcasts during the regular season.

With each window spanning 3.5 hours, that’s almost 100 hours of college football programming — much of it unopposed and supported by cross-promotion. “There are two types of valuations: marginal and intrinsic,” Desser said. “The Pac-12 has more intrinsic value because of those time slots.”

Under the current media contract with Fox and ESPN, each football broadcast is worth approximately $6 million to the Pac-12. The loss of the L.A. schools undoubtedly will impact valuation, but any decrease could be largely offset by market forces: The value of sports rights has soared since the Pac-12 signed its media deal 11 years ago.

“We haven’t done a valuation on the late window,” Kosner said. “But the fact is the Pac-12 can program for the late window without or without the L.A. schools, and it’s not like the L.A. schools have been the highest rated. Oregon and Washington have been.

“If you’re ESPN, you want the Pac-12 to hold together.”

On June 8, John Kosner moderated the Stanford University Class of '82 40th Reunion Panel: "Inside the World of Sports."

INSIDE THE WORLD OF SPORTS: This panel will feature classmates Andrew Brandt, Rod Gilmore, Fred Harman and John Kosner. Join us to hear how they pursued their passions after graduation and got involved in the business of sports. They will share their careers and experiences. Planned as an interactive conversation, we will open up the Zoom to discuss changes in the world of sports, starting with Stanfordthen moving on to events that are happening in the sports world in general.

John Kosner is Quoted About his Late Colleague Tony Pace in the Sports Business Journal

Original Article: Sports Business Journal, February 10th, 2022

Former Subway CMO Tony Pace dies in snowmobile accident

Former Subway CMO TONY PACE died on Tuesday in a snowmobile accident near Big Sky, Mont., after he "struck a tree and went into cardiac arrest," according to Jack Neff of AD AGE. He left Subway in '15 after "nearly a decade" with the restaurant chain. While there, he "built the brand’s value," as tracked by Millward Brown’s annual Brand Z assessment, from unranked to No. 40, with a brand value of $22B, according to MASB. Previously, as an exec at Young & Rubicam and McCann-Erickson, he worked on such brands as Kentucky Fried Chicken, Coca-Cola and Capital One. Pace concluded a two-year term as Chair of the ANA in '16, among "other things overseeing the group’s probe into media transparency issues." Pace in '17 became CEO of MASB, a group "working toward developing standards for objectively evaluating brand value and the contribution of advertising to them" (ADAGE.com, 2/9). Pace's handprints were all over the sports space, including negotiating Super Bowl ad deals, CARL EDWARDS' NASCAR deal and Subway's pact with CLAYTON KERSHAW, among others. Subway in '11 won the Sports Business Award for Sponsor of the Year, with Pace accepting the award (SBJ). Former ESPN exec John Kosner tweeted that Pace was a "quiet MVP" in the growth of ESPN Digital because he was always "aggressively supporting" their programs and platforms, including the pursuit of BILL SIMMONS (TWITTER.com, 2/9).

John Kosner & Ed Desser Featured in SBJ Piece on NCAA Gender Equity Media Study

Original Article: Sports Business Journal, by John Ourand, November 8th, 2021

Consultants Ed Desser and John Kosner said the NCAA women’s basketball tournament should be worth between $81 million and $112 million per year. Former NBA executive Ed Desser, who now runs a sports media consulting company, was sitting in his California office earlier this year…

John Kosner Spoke About MegaCasts with Michael McCarthy of Front Office Sports

Original Article: Front Office Sports, by Michael McCarthy, November 3rd, 2021

Heads up, NFL. The NBA is ordering up more alternate game telecasts similar to Omaha Productions’ popular ManningCast with Peyton Manning and Eli Manning.

The league is expected to announce an alternate telecast co-starring Jamal Crawford and Quentin Richardson for NBA League Pass, its subscription-based product that provides access to hundreds of live and on-demand games.

Starting Thursday, Crawford and Richardson are expected to provide their own weekly commentary for the next 10 weeks.

The 41-year old Crawford was one of the greatest players off the bench in league history. He boasts 1.5 million followers on Twitter. Richardson, also 41, co-hosts the “Knuckleheads” podcast with Darius Miles on The Players’ Tribune.

Meanwhile, the NBA is ramping up “conversations” with national TV partners ESPN and Turner Sports about creating more alternate telecasts, sources told Front Office Sports. The goal: lure viewers who might not tune in for linear basketball telecasts on ABC/ESPN and TNT.

Some formats could be similar to the Manning brothers’ “Monday Night Football” MegaCast on ESPN2 and ESPN+: an unscripted conversation between two smart, funny stars. 

Others could be focused on the lucrative world of sports betting. Or take aim at elusive younger viewers (think CBS’ “NFL on Nickelodeon” production for kids). Or target more casual viewers like ABC’s coverage of the NFL Draft.  

The NBA has offered viewers more alternate telecasts than any league. Viewers want more choice beyond traditional game telecasts that have been virtually unchanged for decades, according to John Kosner, president of Kosner Media. He calls MegaCasts “the future” of sports broadcasting.

“Fans want choice — and the Internet makes that possible. The ManningCast has been a huge success because it offers authentic access to star athletes and it’s both informative and fun,” said the consultant, who previously led digital media at ESPN.

“This same approach is possible in all the major sports in any number of ways — to offer home team coverage, to get deeper into X’s and O’s, and strategies, to cater to different audiences like kids, and, perhaps, most important, to offer true interactivity, like Kyler Murray on Twitch. We are just getting started.”

But the Super Bowl-winning Manning brothers would be a tough TV act to follow. Look for the image-savvy NBA to avoid positioning any new alternate telecasts as direct competitors to ManningCast, said sources. 

Still, the NBA might be uniquely positioned to create star-studded MegaCasts to rival the ManningCast. 

The 75-year old league boasts global personalities such as TNT’s Charles Barkley and Shaquille O’Neal, Charlotte Hornets owner Michael Jordan, and ESPN’s Magic Johnson.

Barkley, in fact, was Omaha’s first guest on the ManningCast premiere. Jordan was the star attraction of ESPN’s Chicago Bulls documentary “The Last Dance,” which drew big audiences during the COVID-19 sports shutdown. Johnson will pinch-hit this season for ESPN’s revamped “NBA Countdown” studio show. 

Besides those big names, there’s a long list of opinionated, entertaining NBA personalities who could front MegaCasts, ranging from TNT’s Kenny Smith and Reggie Miller to ESPN’s Jalen Rose and Kendrick Perkins.

While the NFL and Mannings are rightly earning plaudits for the ManningCast, the NBA and its TV partners have been ahead of the curve on alternate telecasts:

— In May, ESPN presented a Marvel-themed telecast of an NBA game between the Golden State Warriors and New Orleans Pelicans. The “Marvel’s Arena of Heroes” game featured comic book heroes like Iron Man, Black Panther, Captain Marvel, and Captain America. It was shown on ESPN2, ESPN, and ESPN Deportes.

— This April, ESPN debuted its first-ever betting-driven telecast of an NBA game. While the traditional telecast of the Brookly Nets vs. Philadelphia 76ers aired on ESPN, an alternate “Daily Wager” version of the game appeared on ESPN2 and ESPN. This telecast featured “Daily Wager” sports betting analysts Doug Kezirian, Joe Fortenbaugh, and Tyler Fulghum calling the game from ESPN’s studio in Las Vegas.

— The NBA is the dominant sports brand on Twitter. On Wednesday, the league announced it was renewing its content deal with the social media giant. The league will provide highlights, live content and Twitter Moments. It will also offer 40 free Twitter Spaces events, where fans can listen to live audio chats, according to Variety.

Whatever form they take, these secondary feeds are meant to enhance, not replace, the traditional game broadcast — at least for now.

The ManningCast has proven to be a boon for both ESPN and the venerable MNF franchise. 

During Monday night’s Kansas City Chiefs-New York Giants, game, the Mannings delivered their biggest-ever audience, averaging 1.96 million viewers. That was up 22% from Week 7.

They have generated the three most-watched alternate telecasts in ESPN history. Through Week 8, MNF is averaging 13.7 million viewers. That’s up 17% from the same period during the 2020 and 2019 seasons.

To keep things fresh, Omaha can book just about any A-Lister as a guest. Over five games, the Mannings have hosted Tom Brady, LeBron James, Brett Favre, Josh Allen, Michael Strahan, Ray Lewis, Jon Stewart and Nick Saban. Even when they’re in different cities, they have the camaraderie of brothers who grew up in the same household.

“It’s authentic. Peyton, Eli, and the guests all want to be there,” said Eric Weinberger, the former executive vice president of NFL Network who now heads his own production company. “Peyton is on the Barkley, [John] McEnroe, [John] Madden communication level. And Eli shows great timing and humor.”

The NFL is not sitting still when it comes to MegaCasts.

ESPN’s parent company Disney is exploring its own kids-focused game telecast that could feature Star Wars or Marvel characters, sources tell FOS. During its recent media negotiations, the NFL gave all its rights partners (ESPN, CBS, NBC, Fox, and Amazon) the green light to produce their own alternate game telecasts, said sources. 

The NFL is encouraging all of its media partners to “think of new and different ways” to engage current fans and attract new ones, said one source. 

Said Weinberger: “I’m sure every network and content executive is trying to cook this up for other sports. This works so well because it feels independent and out from under anything corporate.”

John Kosner spoke to CNBC's Alex Sherman about the Future of Sports Streaming

Original Article: CNBC, by Alex Sherman, October 10th, 2021

At last month’s Communacopia conference held by Goldman Sachs, Disney CEO Bob Chapek was asked about the importance of ESPN and sports broadcasting to his company’s streaming strategy. His answer sounded like a throw-away line.

“The number one most-viewed thing every year tends to be sports, something like nine out of 10 of the top viewership events in television are sporting events,” Chapek said in a virtual session on Sept. 21. “Who knows what the future will bring, but it’s certainly an important part of our consumer offerings at the Walt Disney company.”

Chapek’s generic response about the future for one of Disney’s most valuable assets inspired no follow-up questions or headlines. But Chapek was addressing an existential threat facing the media industry, and an issue that may one day rock the foundation of his media empire, which includes some of the most valuable studios and film franchises in the world alongside the dominant network for live sports.

Disney’s big dilemma for ESPN is whether and when to fully embrace a future without cable.

Broadcast and cable networks still make billions of dollars per year from the traditional TV model. ESPN is a huge beneficiary, because media companies earn monthly subscriber fees from pay-TV providers regardless of how many people watch their programming. Niche channels make just a few cents a month per subscriber, while sports networks charge several dollars.

Disney makes more money from cable subscribers than any other company, and that’s solely because of ESPN. ESPN and sister network ESPN2 charge nearly $10 per month combined, according to research firm Kagan, a unit of S&P Global Market Intelligence. That’s at least four times more than almost every other national broadcast or cable network, according to Kagan.

Disney requires pay-TV providers to include ESPN as part of their most popular cable packages. It’s a no-brainer for TV providers, who wouldn’t dare drop ESPN.

Meanwhile, the non-sports world is cutting the cord. More than 6 million people ditched pay TV in 2020, according to research firm eMarketer — the highest annual total ever. About 25 million Americans have dropped linear TV bundles in the past decade.

That creates a struggle within Disney that’s poised to escalate. Disney wants people to sign up for its streaming entertainment products, Disney+ and Hulu. Wall Street wants this too. Streaming video is a growth business. Traditional pay TV is a declining one.

It’s also a wise financial swap for Chapek. While Disney makes more than $10 a month per subscriber for sports, it makes far less for entertainment networks such as Disney Channel and FX, which draw lower audiences and don’t command high advertising rates.

If Disney can get a cord cutter to pay $8 per month for Disney+ and $6 for Hulu, it’s a huge win for the company.

The reverse is true for ESPN. Swapping an ESPN subscriber for an ESPN+ customer, who contributes average revenue of less than $5 per month, is a significant loss for Disney. ESPN+ is a streaming service with limited content.

Disney Chairman Bob Iger, who was CEO until last year, told investors when he launched Disney+ that Disney was “all in” on streaming video.

But ESPN isn’t. ESPN’s strategy is to cling to the cable bundle for as long as possible, knowing it can draw potentially billions of dollars from U.S. households that are each paying $120 for the network even if they never watch it.

Some analysts have even questioned whether Disney should spin off ESPN, allowing Chapek to focus more clearly on streaming. An ex-Disney executive, who recently left the company and asked not to be named, said there’s “strategic misalignment” between the parent company and ESPN, and the businesses no longer belong together because Wall Street doesn’t look kindly on declining assets. The executive said having ties to the legacy bundle will weigh down a company’s stock multiple.

ESPN’s fit within Disney

Whether or not the fit still make sense, Disney has a huge financial incentive, at least in the short term, to keep the marriage going.

At $10 per month, or $120 per year, multiplied by about 75 million U.S. homes, Disney earns roughly $9 billion annually in domestic carriage fees from ESPN and its associated networks. Advertising that comes with broadcasting sports brings in billions of additional dollars.

That cash allows ESPN to spend big on sports rights, continuing a virtuous cycle. Disney agreed to spend $2.7 billion for “Monday Night Football” in a deal that runs all the way until 2033. ESPN pays $1.4 billion annually for NBA games and will likely pay more when those rights will need to be renewed after the 2024-25 season. The network owns media rights to every major U.S. sport in some capacity.

It also allows Disney to pay up for original streaming content, bolstering the quality of Disney+ and Hulu as the company competes with Netflix and Amazon.

“We’re successfully navigating the evolution of consumer choice,” said Jimmy Pitaro, chairman of ESPN, which is majority-owned and controlled by Disney, in an interview with CNBC in April. “We believe we can be multiple things at the same time. As consumers continue to gravitate toward direct to consumer, we have the optionality that we need.”

ESPN’s role as cash machine works nicely for the time being. But if 25 million U.S. households ditch cable in the next four or five years, as some predict, the math will no longer add up, said LightShed media analyst Rich Greenfield.

“If we’re going to 40 to 50 million, the question is, ‘Is there any economic model that justifies the level of spending that we’re currently at?’” said Greenfield.

ESPN has to figure out how to make up $3 billion in annual lost pay-TV subscription revenue that’s coming in the next few years as cord-cutting continues, a decline that Disney executives are anticipating, according to people familiar with the matter.

Disney’s plan is to incrementally raise the price of ESPN+ as it adds more valuable content while maintaining contractual obligations for exclusive programming to pay-TV distributors, the people said. An early example is Eli and Peyton Manning’s alternative broadcast of “Monday Night Football,” which will air 10 times this season on ESPN2, with some appearances available on ESPN+.

Should the number of pay-TV bundle subscribers drop to a level well under 50 million U.S. households, Disney would likely take ESPN to consumers in a more complete streaming package, said two people with knowledge of the company’s plans. At that point, the economics would flip, as most of the people paying for linear TV would be sports fans. Disney could likely make more from a full-service sports streaming service than it would make in a wholesale pay-TV distribution model.

In the near term, selling ESPN separate from the linear bundle isn’t feasible. Disney has negotiated digital rights flexibility in almost every major rights renewal in the past few years. But the company is currently restricted by its linear pay-TV obligations, which require certain premium programming to stay exclusive to the cable bundle, according to people familiar with the matter.

What to charge for streaming ESPN

David Levy, the former president of WarnerMedia’s Turner Broadcasting, said that Disney will have plenty of leverage with consumers when the time comes to bypass the bundle.

Levy, who’s now chairman of data firm Genius Sports, said he thinks Disney can get 30 million customers to pay $30 a month for streaming ESPN, or more than double the cost for a standard Netflix subscription. That would bring in $10.8 billion annually — more than Disney makes today from pay-TV affiliate revenue.

“With sports, there’s a guaranteed built-in audience,” Levy said. “It’s much different than entertainment. With entertainment, every show is hit or miss, and you always have to market content. You never know what will succeed and what won’t. That’s why sports is the best content to invest in, and it will be no matter what the distribution model is.”

But Levy’s estimate may be optimistic. A top executive at one of the largest U.S. pay-TV operators told CNBC that about 15% of video subscribers are heavy sports viewers. That would equal just over 11 million U.S. households. Even if ESPN could double that number for a streaming app at $30, the service would make less than the $9 billion ESPN takes in today.

The uncertainty of how many subscribers will pay for sports in an à la carte streaming world isn’t lost on the leagues. The NFL built in early out-clauses to its most recent 11-year deals with the networks, according to people familiar with the matter, allowing the league to bail if the business model stops working. The NFL can end its agreement after seven years with CBS, NBC and Fox and after eight years with ESPN, said the people, who asked not to be named because the negotiations were private.

That’s why Disney and other networks with live sports want to keep the linear bundle around until they have to let it go. It’s difficult to make up the lost revenue in a reliable way.

“We believe strongly that the traditional pay TV bundle will remain intact for a long time,” said
Sean McManus, chairman of ViacomCBS’s CBS Sports. “I don’t think it ever whittles away to zero. And while it’s certainly possible the amount of subscribers will continue to decline, I don’t think the decline ever reaches a point in the coming years that it won’t support the current rights deals that we have, both for NFL football and our other sports.”

Churn baby churn

A streaming-only world would also subject ESPN to a challenge that it’s never had to worry about: Churn.

People who cancel ESPN unsubscribe from the whole linear bundle. In the direct-to-consumer market, it would be easy for football fanatics to only subscribe during the few months when games are played.

ESPN executives have been playing with ways to incentivize annual membership on the existing ESPN+ service to reduce month-to-month volatility. Several times this year, ESPN has sold a pay-per-view UFC fight for $69.99 on ESPN+, and at the same time offered a full-year membership, that would include the match, for $89.99, a 35% discount.

Packaging ESPN+ with Hulu and Disney+ is another churn buster, as the combined offering is 33% cheaper than buying all three individually.

However, a more complete ESPN offering combined with another streaming service would have to cost more, a proposition that would likely scare away the non-sports fans, who are used to paying much less. Disney already packages sports in some of its foreign streaming services, such as India’s Disney+ Hotstar and Latin America’s Star+. But the economics internationally aren’t the same as in the U.S.

“If you put sports into Hulu or Disney+, instead of charging $5 or $7, now you’re charging $30?” Greenfield said. “And then you’re trying to compete against Netflix at $15. There is no model I see that works. There’s no easy answer.”

Threats and saviors

Then there are the technology risks.

ESPN executives are hesitant about moving their prized programming to directly to consumers because of rampant password sharing among young users, according to people familiar with the matter.

“Watching a pirated stream or sharing a streaming service password seems like a victimless crime,” said John Kosner, who led digital media at ESPN from 2003 to 2017 and is now president of media consulting firm Kosner Media. “But it really impacts the business model of sports on streaming services.”

Whether younger audiences even want live sports is another issue for Disney. Other entertainment options, such as social media, mobile games and on-demand entertainment services may be eroding the cultural grip of televised sports. Americans age 13 to 23 are half as likely as millennials to watch live sports regularly and twice as likely to never watch, according to a 2020 Morning Consult survey.

“The overall relevance of sports is an open question for the younger generation,” said Kosner.

One potential model that could save Disney a lot of future heartburn is a new streaming bundle that effectively replicates pay TV but with more options. If that becomes the winning form of distribution, media companies may be in a familiar position, making money from their most-popular services even if not everyone is watching them.

Dexter Goei, CEO of cable TV provider Altice USA, said in May that such a product offering could work well for the sustainability of the media industry.

It “would allow us to focus primarily on our broadband product” and “be a partner for content on a direct-to-consumer basis as opposed to a partner on a linear basis,” Goei said at JPMorgan’s Technology, Media & Communications conference. It “will dramatically improve the economic trends of our business from a cash-flow standpoint,” he said.

The growing popularity of sports betting could also help. Betting by mobile app, which is slowly being legalized around the country, boosts viewership, because “if you place a bet on a game, you’re much more likely to watch that game,” Levy said.

Kosner added that augmented reality devices that create new viewing experiences and innovative products like non-fungible tokens (NFTs), which are digital collectibles, also have the potential to lure younger fans to watch games.

Add it all up, and media executives can find plenty of reasons to be optimistic despite the uncertainty that lies ahead for live sports.

“The value of sports continues to be more and more important every single year,” CBS’s McManus said. “Advertisers are going to continue to want to reach the largest possible audiences. The way to do that is with sports. I don’t see a cliff coming. Our roadways are clear.”

John Kosner spoke with Sportico's John Wall Street about Barstool Sports & MLB

Original Article: Sportico, by JohnWallStreet, August 13th, 2021

Earlier this week, the New York Post reported, “Major League Baseball and Barstool Sports have had significant negotiations about having national midweek games on the site’s platforms” ( the non-exclusive games ESPN gave up). The story spawned a media debate largely centered around the league’s desire to cultivate the next generation of fans (see: Washington Post, Star Tribune) and Barstool’s well-documented, controversial history.

But JohnWallStreet has learned the polarizing discourse is much ado about nothing. A source familiar with the dialogue between the two parties said: “Barstool called MLB because they knew these rights are on the block. MLB fielded the call. But it hasn’t gone further than that and likely won’t. In fact, MLB was surprised to read the Post article because the conversations are barely existent.” Barstool is believed to have fed the story to the tabloid. The company did not respond to our request for comment.

Our Take: There is nothing unusual about Barstool reaching out to Major League Baseball. When tier-one rights become available, prospective partners across the broadcasting landscape will inquire. It is the smart thing to do. That’s because even if the company knows it is not going to win the package, kicking tires can be helpful in building relationships. It also provides for an opportunity to gain intel.

There is also nothing out of the ordinary about MLB taking the meeting. Doing so helps to ensure the league maintains a level of friendliness with the growing media brand. There may also come a day when the company is ready to spend $150 million per year on a national broadcast package.

What can be considered atypical is Barstool’s apparent decision to reach out to a rights owner and then look to leverage the nascent discussions in the media. But as John Kosner (president, Kosner Media) reminded, Barstool is not your parents’ sports media company. Leaking early-stage talks with MLB “is consistent with them drumming up attention for themselves,” he said, and it’s a strategy that has worked well for them.

For a company that courts publicity—good or bad—there is seemingly little downside to letting discussions with MLB be known. The affiliation helps to legitimize the Barstool Sports brand outside of their target demo and may make the company look to be more credible the next time they are pursuing a rights package.

Major League Baseball declined to comment. But the league probably isn’t thrilled by the prospect of Barstool taking talks of a proposed partnership deal to the media. The Post story has almost certainly forced them to answer questions from partners and sponsors alike.

On the other hand, baseball may not be publicly shutting down the rumors because, real or not, Barstool’s perceived interest may make the sport seem more relevant to the young demographic they desire. And there is no harm in either expanding the array of potential bidders (it’s possible that DraftKings and/or Fanatics could emerge) or having serious bidders believe the pool of prospective broadcasters is larger than previously anticipated. “It also keeps them in the news and makes the point that those mid-week game rights are available,” Kosner said.

As for those arguing MLB, and any other tier-one property, should stay away from the controversial digital media company, Kosner says they are barking into the wind. “If they have real money and want to spend it on sports rights,” he said, “there will be an audience of rights sellers.” One just needs to look at the Fox empire to make the case.

“A Revolution Led by Athletes,” John Kosner talks about sports data with Asli Pelit at Sportico

Original Article: Sportico, by Asli Pelit, July 30th, 2021

With millions of dollars on the line, athletes are discovering the power of their own personal data. Once exclusively used by sports leagues and teams to maximize performance and profits, data analytics has become a tool elite athletes count on while negotiating their million-dollar contracts.

The trend gained attention this past spring when Kevin De Bruyne, the 30-year-old midfielder for Manchester City FC, decided to negotiate with the powerhouse club without an agent. Instead, he hired a software company called Analytics FC. The company uses a database “across 100 leagues and multiple data models to highlight players that contribute to their team results in a holistic way, rather than just goals scored or xG (expected goals) earned,” Analytics FC founder and CEO, Jeremy Steele, said in an interview.

The company’s flagship product, “The Transfer Lab,” effectively calculates the expected goal difference each player contributes to the team by analyzing the player’s every action on the pitch. “We communicate the output from these [algorithm calculations] in a way which makes sense to club executives and coaches by using football language to describe them,” he added via email.

Negotiations lasted six months, but in the end, the club’s executives found the Belgian player’s argument persuasive enough to make De Bruyne the best-paid player in the Premier League, signing him to a four-year contract for $27 million a season.

De Bruyne set an example for athletes who want to control the data that leagues and teams have collected for decades. “This is a revolution led by the athletes,” John Kosner, the president of Kosner Media, said in a recent interview. “I think what is unique at the moment is how athletes themselves are sort of leading this revolution.”

One of these revolutionary efforts is called Project Red Card, and it started on the other side of the Atlantic. Last year, some 400 players across the English and Scottish leagues threatened to take legal action to establish who owns player-performance data. Data analytics companies can track over 5,000 data points per game observing player performance. The information is used by everyone from team scouts to video-game developers to betting companies. Until recently, that data has proliferated largely unchecked. The Project Red Card group is arguing that a player’s performance data is actually personal and is being exploited for financial gain without their consent. If successful, players could receive tens of thousands of dollars in compensation.

On the U.S. side, athletes are following in the footsteps of management when it comes to data. Analytics is ingrained in American sports, where data has been used to make better, more effective business decisions à la Moneyball. From sabermetrics to infrared cameras to wearables, team owners have invested in ways to collect information about athletes—in recent years with the increasing interest from PE and investment firms seeking robust returns.

More often than not this data were collected without players’ consent. When the NFL put chips in players’ shoulder pads, “some of the players did not even know they were wearing chips,” commented Brian Kopp, a pioneer in sports data analytics, who started talking about the subject 12 years ago.

Sports leagues and teams defend and promote the use of wearable technology, claiming they impact “performance optimization” or injury prevention. However, the wide-ranging consequences of collecting data and the ultimate ownership of that information are still gray areas. In their 2017 collective bargaining agreement, the NBPA pushed for a set of rules governing the use of wearable technology by the league and its players. According to the agreement, NBA teams won’t be able to use the data collected via wearable technology against players in contract negotiations. Kopp, now the CEO of Phoenix Sports Partners, thinks in the future there will be “more of a collective conversation. The caveat was always at the college level, where the players don’t have a player’s union. But I think that all changes now with the NIL ruling.”

Joshua Ebrahim, CEO of ProFitX, has a similar take. He, too, expects the new NCAA rules around name, image and likeness rights will change how young athletes look at data and its ownership. A former athlete agent, Ebrahim understands the importance of data while negotiating contracts. So he founded a software company, ProFitX, which today uses more than 90 data points compiled in the platform and AI technology to display real-time contract values and two-year projections to consult teams, players and fans.

In April the company ran a pilot program with 20 NBA teams. “I think these kids are going to come into it with much more acumen at a younger age, and maybe there’s an avenue where they start to value this data even more,” Ebrahim said. “We never had this kind of data as agents. If we did, it would have been very powerful.”

The potential power of data in negotiating contracts is kindling a new industry. This summer Analytics FC will be advising two Champions League winners, two current England internationals, and an FA Cup winner, though the company declined to name them, citing privacy considerations.

In the U.S., Steve Gera, a former NFL coach, started Breakaway Data and is consulting with a group of players in the league. “We’re basically helping them access their data, visualize it, and then customize it in a way to where they can look at their data profile,” Gera said. “The reason why De Bruyne had to hire his own [data] team is because there’s no club that wants to actually pay players more.” He believes it will be customary for players to own and use their data in negotiating with teams in the future.

And while De Bruyne decided against using one, data-savvy agents are still likely to play a huge role in negotiating contracts. “Analytics are important and crucial to make a case,” said Leigh Steinberg, the agent who secured Kansas City Chiefs star Patrick Mahomes’ record-breaking 10-year, $503 million contract. “The key is to analyze that data and show that he is statistically prolific and that he is better than the rest, using the facts. There is no arbitration, no Supreme Court in sports. How will we prevail? Stats are black-and-white values.”

John Kosner spoke with Sportico's Anthony Crupi about Giannis's Instagram moment

Original Article: Sportico, by Anthony Crupi, July 21st, 2021

It was arguably the most engaging moment of the Milwaukee Bucks’ postgame celebration, but you wouldn’t have caught it if you were watching TV.

After putting up 50 points and steering his team to its first NBA title in as many years, Giannis Antetokounmpo hopped on Instagram Live to toast the championship with his brother, Thanasis. Placed in the NBA’s health and safety protocol prior to Game 5, the elder Antetokounmpo was cooling his heels in a local hotel suite while the bubbly sprayed at the Fiserv Forum.

Hundreds of thousands of fans watched in real-time as the newly minted NBA Finals MVP exalted with his socially distanced brother. A Champagne-goggled Giannis kicked things off with a Delphic riff on “For the Night” by Pop Smoke, cutting off the verse right before it would have veered into the part with the F-bombs, before telling Thanasis that he was bringing the party to his rented room.

“I’ll come to the hotel! I don’t care, I’m coming,” Giannis said, while holding his phone at arm’s length.

“No you’re not,” Thanasis shot back, grinning. “I’m not opening the door.”

While there’s no way of telling just how many people watched the exchange as it happened or viewed the clip after the fact, network execs and marketers alike probably want to tap into Giannis’ base of 9.6 million Instagram followers. Unfortunately for media’s old guard, moments like last night’s impromptu IG Live event are like lightning in a bottle of Veuve Clicquot.

“After the fact, someone at ESPN may have thought, ‘Man, I wish we could do that,’ although there aren’t too many people working in TV who’d be willing to risk picking up on a live feed,” said John Kosner, president of Kosner Media. More to the point, Kosner believes that any attempt to commoditize an impromptu social media exchange would only serve to drain it of the authenticity that made the Antetokounmpo brothers’ chat so endearing.

If the traditional media may find itself shut out of this sort of viral exchange, you can be sure that a whole lot of sports stars were taking notes during the Giannis-Thanasis chat. “I can’t think of another time when a separate live event took place during the primary live event which a broadcaster has paid for the right to distribute,” Kosner said. “But if you’re an athlete, what you saw was Giannis commercializing his success. The takeaway is that there are opportunities to create your own windows,” even in the midst of a trophy ceremony.

Naturally, with opportunity comes the inevitable commercialization that spoils everything it touches. If it had been LeBron James hoisting the Larry O’Brien hardware in L.A., fans may have had to endure a not-entirely off-the-cuff bull session between the Laker great and, um, Porky Pig. (Gotta get fannies in the seats for Space Jam: A New Legacy.)

“The natural connection because Giannis and his brother is what made the moment,” Kosner said. “Because of that, and because of all the variables that were in play—the historic championship, the fact that [Thanasis] was in the COVID protocol, etcetera—it’s unlikely that there will be a command performance.”

If Giannis’ IG celebration may be an irreplicable phenomenon, it’s perhaps worth noting that the MVP knows how to pick his spots. While nobody was going to censure the guy who put up that lurid stat line, other players have caught a fair amount of grief for inviting the outside world into the locker room. When Antonio Brown in 2017 secretly posted footage of Steelers head coach Mike Tomlin talking smack about the Patriots during a boisterous playoff celebration, the receiver’s exercise in guerrilla filmmaking would mark the beginning of the end of his tenure in Pittsburgh.

At the time Brown made the recording, he noted that 40,000 followers were watching his coach’s private address to the team. This morning, 150,000 fans watched Giannis request a 50-piece order (“not 51, not 49”) of Chicken Minis and a large drink, no ice (half Sprite, half lemonade) from a Chick-fil-A drive-through.

Giannis had the MVP trophy in his lap while he ordered the tiny sandwiches.

John Kosner on the potential NBA Mid-Season Tournament with CNBC’s Jabari Young

Original Article: CNBC, by Jabari Young, June 26th, 2021

National Basketball Association executive Byron Spruell has some work to complete before the league’s next media rights deal. The NBA wants a rights increase, and developing new concepts that attract viewership could assist.

The league’s push for a mid-season tournament is one option, but it needs to gain momentum throughout its ownership group. The players union will have a say, and the other constituencies (team executives, sponsors) will chime in, too. And then there’s basketball historians and traditionalists that will make a fuss.

It’s here that NBA commissioner Adam Silver is entrusting Spruell to help create the blueprint for the mid-season tournament. But early signs suggest he needs more incentives to make it work.

What’s in it for the viewer?

The NBA’s concept for a mid-season tournament derives from its observations of international soccer leagues. European basketball clubs also incorporate tournament-style games, and one NBA team executive noted the massive fan support those games get.

The concept would include group games -- essentially enhanced versions of regular-season contests -- and teams that perform well would be invited to the mid-season tournament. The NBA is testing the idea in the WNBA for its 25th anniversary and called it the “Commissioner’s Cup in-season competition.”

WNBA players will divide a $500,000 prize pool. The winning team gets $30,000 per player, runner-up $10,000 per player and the MVP of the Commissioner’s Cup title game takes home $5,000. Google is a major sponsor of the WNBA tournament. And Amazon is the media partner that will stream the games on its Prime video service.

The NBA wanted the concept for its 75th anniversary, but the pandemic changed things. So this year, league executives will study the fanfare of the WNBA’s format.

“It’s a visionary idea,” said long-time media executive John Kosner of the tournament. “I think we’ll see more of that.”

The NBA will use money as the main incentive for team staff and players. League officials hope this reward-based business model will drive players to compete. And adding compensation for player charities, especially social justice organizations, could help get their approval.  

The thing is, what’s in it for the viewers? What will make people watch a mid-season tournament, especially with the National Football League in progress? And how would the NBA keep fans engaged?

Deputy Commissioner of the NBA, Mark Tatum holds up the card of the Detroit Pistons after they get the 1st overall pick in the NBA Draft during the 2021 NBA Draft Lottery on June 22, 2021 at the NBA Entertainment Studios in Secaucus, New Jersey.

Adding a draft pick

Kosner, who led digital media at ESPN until 2017, noted consumers have more options outside sports. Covid-19 disrupted sports consumption, and viewers have identified other entertainment options. For leagues outside of the NFL, innovation around its product is a necessity. Even if it means disrupting the tradition.

“You have to convince people that there’s a reason to watch,” Kosner said. “You have to make your product as good as you can because you’re no longer competing with another sports choice -- it’s everything else that people can view and can do.”

In a fall-winter sports cycle, the NBA’s 82-game season has become a bit stale. It has moments, like the Christmas Day games, and Thursday nights are entertaining with Turner Sports’ production. But players resting is still an issue, and that impacts the national contests.

Its top superstar, LeBron James, moving out west didn’t help matters, either.

This season, the league’s viewership averaged 1.3 million viewers throughout its national games on ESPN, ABC, and TNT. Covd-19 impacted that, but pre-pandemic numbers: for the 2018-19 season, the NBA saw an average of 1.79 million viewers. And the year before James left the East (2017-18), the average was 1.89 million.

Viewership metrics are somewhat tricky to comprehend, and the NBA’s product is strong for the 2020-21 postseason, including solid play-in viewership featuring James and the Los Angeles Lakers.

But to expand engagement and increase interest around a mid-season tournament, some in league circles floated the idea of adding a draft pick to the stakes.

The NBA could place the pick between the No. 14 and 15 slots, protect the lottery teams, and add an asset for teams that win the tournament. The league can call it the “commissioner’s cup pick” or some other title sponsor to pay for the naming rights.

The pick rewards the team that stays competitive during the regular season’s early stages. It creates an asset for team owners that executives can leverage in possible trade scenarios. And finally, that creates engagement, as social media channels are filled with NBA fans examining ways to improve teams via trades and draft picks.

Byron Spruell, President of League Operations speaks at the 2017 NBA Finals Cares Legacy Project in Cleveland, Ohio.

The NBA tossed around the idea, but so far, it didn’t get enough support. There are concerns about possible backlash and of empowering good teams with star players. It’s teams like the Lakers and the loaded Brooklyn Nets, that many expect would win any tournament. But with a knockout-style match, similar to the NCAA March Madness games, even the power teams could have a bad night.

Another team executive favored adding the draft pick. The individual called the concept, The NBA Commissioner’s Cup tournament, where every contest is a Game 7.

A peek at the viewers for recent postseason Game 7s: The Nets vs. Milwaukee’s Bucks averaged 6.9 million viewers. And the underdog Atlanta Hawks took out the power team – Philadelphia 76ers. That Game 7 that attracted 6.2 million viewers. Postseason elimination games are fun, and attracts sports fans.

The elimination style could help in the regular season too, said Kosner. He agreed with the incorporating the draft pick, adding the tournament  “creates another event the [sports] betting entities would get excited about. So I think it’s a good idea and hope that they’ll do it.”

“It’s more quality programming,” said former CBS Sports president Neal Pilson said. “I can’t imagine the viewer would object or not watch. The idea of the mid-season tournament has an appeal in terms of creating more exciting and competitive games that might otherwise not exist during the regular season.”

NBA betting on patience 

Pilson, now a professor at Columbia University’s sports management program, cautioned about player injuries, though.

Tournament games could raise intensity levels, and force players to play through nagging injuries they could otherwise sit out. After all, the NBA’s postseason is the most important stretch of the year. If key players are injured during a high-pressure tournament game, championships could be at risk.

But with the right incentives, the league believes even the best players would be willing to help teammates earn more money.

Draft compensation could return to the bargaining table as the NBA continues designing the blueprint. Again, the plan is to examine how the concept works with other properties, including elements in the Basketball Africa League.

Configuring home and away games will also be a challenge, and determining which part of the calendar to install the tournament is critical, too. There’s talk of inviting European clubs. And placing knock games in one location – more than likely, Las Vegas. Should Spruell and Silver develop the tournament’s logistics, and owners and players approve, league officials are betting patience will allow it to grow on fans.

The NBA renewed interest around the All-Star game. The play-in race is a fun concept. Now its exploring with its 82-game campaign to make that more exciting, too.

“If they created a mid-season tournament, with something at stake, you’ll get people to watch,” Kosner said.

John Kosner on The Athletic & the NY Times with Sportico’s John Wall Street

Original Article: Sportico, by JohnWallStreet, May 28th, 2021

Earlier this week, Axios reported that The New York Times (NYT) was “looking into a potential acquisition of The Athletic.” The story followed a Wall Street Journal piece that declared merger talks between the subscription sports site and Axios to be over and also pegged the NYT as the subsequent ‘leading contender’ for the digital sports media property. Vox is also said to be kicking the tires on The Athletic.

The New York Times Company would seemingly be an ideal landing spot for the once high-flying startup. “[They are] already in the subscription business and [from a prestige standpoint], they are one of the world’s preeminent media companies,” said John Kosner (president, Kosner Media).

It is less clear why the NYT would be interested in making a big bet on a growth business that has seemingly stalled, is losing money and competing in an extremely competitive digital media environment. The New York Times Company declined to comment, saying, “As a general matter of policy, we do not comment on rumors about potential acquisitions or divestitures.” The Athletic did the same, stating it “does not comment on rumors or speculation in the market.” But conversations with Kosner (former EVP, digital and print media at ESPN) and The New Consumer founder Dan Frommer indicated that corporate objectives, portfolio fit and a successful track record of launching subscription-based products are likely behind the company’s investment thesis.

““[They are] already in the subscription business and [from a prestige standpoint], they are one of the world’s preeminent media companies.””

— John Kosner
President, Kosner Media

Our Take: New York Times CEO Meredith Kopit Levien publicly set a goal to reach 10 million digital subscribers by 2025. At last count (Q1 ’21 earnings), the NYT reported 6.9 million digital subs (includes: cooking and crossword products). “If you’re the New York Times and you set that goal for 2025, it’s hard to imagine you’re going to get there organically,” Kosner said, noting that new digital news subs are expected to decelerate now that former president Donald Trump is out of office. Rolling up The Athletic and their 1.2 million subs would push the NYT closer to its target.

It’s logical that the New York Times Company would look to add another complementary subscription product to the portfolio, as non-news subscribers are making up a greater portion of new subs than ever before. As Kosner explained, “Getting closer to the customer and serving them in different ways is a bigger business opportunity [than trying to sell news subs exclusively].” Frommer noted that with more subscription products the Times may be able to offer a broader consumer bundle.

An acquisition of The Athletic could in theory also strengthen The New York Times’ news product and support their international ambitions. “The Times has sort of abandoned sports, especially New York sports, and The Athletic has fairly comprehensive coverage of sports, both in this country and football abroad,” Kosner noted. A purchase of the digital outlet “would add a brand known to sports fans, fill a niche and fit into their plans to grow international subscriptions,” he explained.

For all of the positives The Athletic would bring, concerns about the business exist. User growth has slowed (granted, the pandemic likely had something to do with that) and despite bringing in around $80 million in 2020 revenue, the company is still not profitable. There are also questions about the size of the staff—600 full-time employees, including 400 editorial staffers—and how valuable its subscribers are, considering a significant portion remain on discounted plans. It is not clear the company will ever make money.

If there is a reason to believe The Athletic would become profitable under the NYT tent, it would be because the legacy media company has “a very impressive, robust technology and product division and is ahead of the curve [relative to the competition] at productizing and building businesses around different consumer products,” Frommer said. “They also have a huge breadth of experience, and depth of experience, developing and selling subscription products to consumers.”

One could argue that with more than 100 million people in the U.S. identifying as sports fans, The Athletic has barely made a dent in its total addressable market. But Kosner reminds: “The Athletic doesn’t just compete with other sports media subscription services. All of these subscription products co-exist together” (think: Netflix, Amazon Prime, Spotify, Audible, Hulu, The New York Times). It’s not clear there are enough people willing to choose The Athletic over those other digital products.

That said, Frommer can see how acquiring The Athletic could make sense to the NYT, even without a short-term path to profitability. “A company like The New York Times probably plans to be in business for hundreds more years, so they’re in a position to make 20-, 30-year bets,” he said. “If the bet is Americans will continue to love sports in 30 or 40 years, and [they] can own the dominant digital sports media brand, perhaps that’s a worthwhile [wager]–especially if they can buy [the company] with stock.” $NYT shares are trading at their highest level in more than 15 years.

The Athletic raised a $55 million Series D in January 2020 at a $475 million valuation (according to PitchBook). If one were to assume that any deal would ensure that those investors would not lose any money, the purchase of the sports site would be the second most expensive acquisition in Times history (behind only the $1.1 billion it paid for The Boston Globe in 1993). Of course, the company’s track record with mergers and acquisitions isn’t great. It ended up dumping the Globe for just $70 million, lost $110 million on the sale of About.com and saw two marketing companies it bought go under. In fairness, Levien represents new leadership; she was not in charge when those failures occurred.

For the record, Axios wrote that The Athletic has yet to hire bankers, meaning it is unlikely there is a deal in place with the New York Times Company.

John Kosner spoke with Bloomberg's Lucas Shaw about the Deshaun Watson case

Original Article: Bloomberg, by Lucas Shaw, April 25th, 2021

In the five weeks since more than a dozen women accused Houston Texans quarterback Deshaun Watson of sexual assault, sports media has been tongue-tied.

ESPN's “First Take” and “Pardon the Interruption” have spent more time on the NCAA Tournament and the NBA playoff race. Talk radio has gone long on the NFL trade market and the Masters. It's not just sports media. While coverage of the allegations picked up after two women came forward with their stories -- prompting Nike to drop Watson -- the story has yet to appear outside the sports section of national newspapers.

Several senior media executives have expressed surprise at how little coverage the case has gotten thus far. Watson is one of the best players in the most popular sport in the U.S. His demands for a trade received wall-to-wall coverage at most of the major sports media outlets. But allegations of sexual abuse, not so much.

“It’s not been nearly as big a story as the merits of it warrant,” says Pablo Torre, host of the ESPN Daily podcast.

Torre’s podcast has been a notable exception, having now devoted two full episodes to the story. In the first episode, he interviewed investigative reporter John Barr about the case, and then spoke with Texans beat reporter Sarah Barshop. In the second episode, Barr returned to talk about the “conflicting narratives” now that some women have come to Watson’s defense.

The muted coverage contrasts with that of recent entertainment scandals. National newspapers like the New York Times and Los Angeles Times have run a series of front-page stories about toxic cultures at institutions like the Magic Castle and the Friars Club. Both the Hollywood Reporter and New York Times just this month published long investigations into producer Scott Rudin for being an abusive boss. (The Rudin story ran on the front page of the paper.)

Media executives cite many factors for the subdued coverage of the case thus far, including the relative anonymity of football stars, a long history of false accusations against Black men and the profession of the accusers. Watson is accused of sexual assaulting his massage therapists. While they are trained professionals, it has led some to dismiss the case as “tabloid fodder.”  

 “If you go to the NFL page for ESPN, it’s there. But I haven’t really seen coverage in leading newspapers I look at,” says John Kosner, a longtime sports media executive who used to work at ESPN and the NBA. “I suspect at the moment they are going on the information available to them.”

The story has received more coverage in the Houston market, though the tenor of that coverage has missed the mark, according to Texas Monthly's Dan Solomon.

One reason this story is still relegated to the B block is the evolution of sports media, which now prioritizes “the take” above all. A take is an interesting opinion, an angle on a story that no one else has discovered. It is the foundation of all the biggest sports media personalities on TV.

Stephen A. Smith is the maestro of the outrageous, if not always correct, opinion. Skip Bayless, his former partner-in-banter, built his entire career on takes. Bill Simmons, Colin Cowherd and Mike Francesa all have loyal followings because their listeners want to hear their take on a given topic. 

It’s hard to have a good take on the Watson case. If you make it about the football impact, you may dismiss the allegations themselves. If you believe the women, you risk being the latest bigot guilty of falsely accusing a Black man. If you don’t believe the women, you have even bigger problems. Top sports hosts have often resorted to say things like, “This doesn’t look good for Deshaun Watson.”

None of these concerns have ever stopped cable news pundits from speculating or commenting on ongoing legal matters, but sports media treads more carefully. ESPN has a policy distinguishing between a civil trail and a criminal trial. Criminal trials merit closer coverage.

The investigations into Watson are still ongoing. The Houston police department and the NFL are looking into the allegations. The Texans haven’t punished him either.

“When there is active litigation, civilly -- and you don’t have obvious conclusions to draw about what’s true and false -- it would be irresponsible to do so. I don’t fault the shows that are run on takes for not diving into this through their lens,” says Torre, who is also a  frequent guest on “Around the Horn” and co-host on “Pardon the Interruption."

And yet, ESPN showed no such reluctance to cover the outcome in the case of Derek Chauvin. The network, which just a couple years ago vowed to stick to sports, spent more than an hour of “First Take” on the trial’s verdict, and made it the biggest story on its website’s homepage.

Most members of the media cheered this coverage as a sign of how the activism of professional athletes has forced ESPN to adapt. That story has little to do with sports. But professional athletes cared about it, and spoke out about it, which means their teams had to pay attention, which meant the leagues and their media partners had to pay attention.

But in the case of Watson, his teammates, the Texans and the NFL would prefer this story just go away. -- Lucas Shaw

John Kosner & Ed Desser connect with David Halberstam of Sports Broadcast Journal

Original Article: Sports Broadcast Journal, by David J. Halberstam, April 22nd, 2021

Ed Desser and John Kosner worked together at the NBA for a significant number of years under the tutelage of the late commissioner, David Stern. It was a precious way to learn the business. Stern built the NBA from a drug infested league that failed to get its championship playoff round on live television to a multi-billion dollar entity with huge global footprints. Anyone who worked for the driven Stern knows that he was hands-on and a taskmaster. But many will also tell you how much they learned interacting with him regularly.

For 23 years, Desser served as the senior media executive in Stern’s NBA office and ultimately as President of NBA Television and New Media Ventures. He now has more than 40 years of experience in sports media, performing valuations, determining strategy, and negotiating major media deals in the local, national and international TV marketplaces, and serving as an expert witness.

At the NBA, Kosner was in charge of U.S. broadcasting during the Dream Team era. He then spent 21 years at ESPN where he helped build the world’s leading digital sports destination, a powerhouse in short- and long-form editorial content, streaming, social media, podcasting and fantasy sports. In 2018, John and Stern created Micromanagement Ventures, a portfolio of sports technology start-ups focused on media, betting and player health. Stern passed on New Year’s Day 2020 after a brief illness.

Kosner and Desser negotiate sports media agreements for rightsholders. They’re both ahead of the curve and clearly project conceptual frameworks that will dictate future television deals. The average fan might not know their names. Yet they’re well known and greatly respected in the suites of top television and network executives.

In light of the whopping $113 billion NFL deal, I checked in with them to get their takes on how the deal breaks out, what viewers can expect, the entities that they think could be big TV players down the road and how in a changing world we’re likely to consume sports down the road.

Q& A – Ed Desser and John Kosner 

Both of you worked for the late David Stern at the NBA. He had a reputation of being somewhat of a taskmaster. What are each of your memories of David? Any fun recollections?

Kosner: I got to work with David twice – the first time after Ed hired me from CBS Sports, 1987-1994, and then after I left ESPN, David and I worked together in 2018 and 2019.  My first go round, I got very accustomed to screwing things up and then hearing about it in high volume and frequency from David – leading to multiple “firings.”  When we reconnected in 2018, David was a more content, relaxed person and my work experience with him was great fun. But he never lost his competitive edge. David kept his phone number private so when you saw the “no caller ID” show up on your phone you knew who it was. One time, I was working with David on an investment/advisory deal with a startup and the startup rejected one of our key terms. I sent David an email late on a Friday night, stating that success was unlikely because the startup “can’t do the deal we want.” As soon as I sent it, I felt this familiar shudder – No!!!  David’s going to call me right back and say: “Listen, you ____, it’s not that they can’t, it’s that they won’t. You’re fired!”  Two minutes later the “no caller ID” popped up on my phone. The difference this time was that after David read me the riot act, he had a good laugh when I told him that I got exactly what I deserved.

Desser: I too was “fired” multiple times by David…sometimes more than once in a day, sometime deserved and other times just for dramatic effect! Perhaps that was the reason he had both John and me working there at the same time! There are so many stories I could share about my 23 years at the NBA (plus another 5 before that locally, and 16 since working on NBA-related deals), but I think it’s best to just say there has never been a smarter, harder-working, more gifted, and more transcendent sports executive. David understood how every aspect of the business worked, and what needed to happen to advance the state of the NBA: “everything is a priority.”  He recognized the power of new technology to supercharge opportunities, which was especially valuable for me. He never took himself too seriously, but made sure that we understood that “no one was going to care about the NBA more than we did.” He made my career possible, and I will forever be grateful for all the opportunities he provided, the support he gave, the lessons he taught, and his friendship.

Kosner: Can’t say any of that better. I would just add that David was also self-taught. He reinvented the industry but only after he learned each part of it (broadcasting, marketing, basketball operations, community service, next-gen technology, etc.).

Desser:  I was one of his early teachers, before he mastered the subject and taught me a thing or two about sports broadcasting!

Did the enormity of the $113 billion NFL TV deal surprise you in any way? Other than a few tweaks here and there, be they ABC joining the Super Bowl rotation and Amazon getting Thursday nights, the distribution of rights mirrors what the league and networks have now.

Desser:  The NFL deals collectively are the most outrageous, audacious, overpriced, but completely worth it media deals in sports history. The power of the NFL as a property, a brand, and a perfected form of entertainment, is something that can launch series, networks, businesses, and technologies in the USA. It is simply unmatched. It defines the high-water mark that all others seek to attain. While the deals are innovative (e.g., carving out gambling rights, making Amazon exclusive on Thursday nights), they largely continue the NFL’s long practiced approach, staying with established incumbent partnerships, while continuing the practice of “slicing the salami,” as David would say, just a bit thinner each cycle. No one gets all they want, but everyone is happy to be inside the tent.

Kosner: I was pleasantly surprised that Amazon paid $1 billion annually to get exclusive rights to the Thursday night games. Amazon’s purchase of these rights is the most significant deal in our industry since Fox took the NFC package away from CBS in 1993. What Amazon does with these rights – innovative production, multiple feeds, heavy stats, Twitch, shopping, X-ray – is going to be the most fascinating part for me. I’m also very curious about the streaming plans for other broadcast partners. They are each approaching the challenge differently.

The huge dollar amounts required of the networks for the NFL might very well diminish what the networks have left in the till for other sports broadcast rights. As such, it’s been reported that the NBA is seeking an early renewal of its rights deal with Turner and ESPN. The league is hoping to triple its rights fee from $24 billion to $75 billion. The current deal ends in 2024-25. From an overall revenue picture, other than the NFL, which of the sports will fare best in a landscape that can be financially tighter?

Kosner: I believe the strong will get stronger. The NBA is uniquely popular among young fans and basketball continues to grow globally. If the NBA does not re-up early with ESPN and WarnerMedia, it could become the first league to strike a truly global media agreement with one or more tech companies when its current deal expires mid-decade.

Desser:  The upward trajectory of major sports rights is unabated. There is still nothing else quite like sports to gather a huge, reliable audience. The pool of available funding is growing from streamers and potential gambling opportunities, while the pay television market continues to slowly shrink. Caught in the middle will be the sports properties that don’t command sub fee allocations, and which can’t bring large amounts of content and subscribers to streaming platforms. They will have to adjust to the new normal, but will find a host of alternative options available as streamers look to build sub-bases in the current phase, creating new leverage for previously marginalized properties, provided that they have devoted, well-heeled audiences. Combining out-of-market rights with national rights is also a key “new” opportunity for MLB, NBA, and NHL.

NBC had the whole kit and caboodle in an exclusive NHL deal. ESPN recently bought a chunk of the rights beginning next season. NBC would like to cut a deal for the half that remains but has drawn a line in the sand. It will pay just so much. Thoughts?

Kosner: The NHL’s deal is indicative of what’s coming. The traditional rights buyers are all launching streaming services (except for Fox) and that is where they are investing. The NHL gets the ESPN and ABC platforms for its biggest events but the real news here is that the NHL’s outer-market package and its vast number of games is moving to ESPN+. Did ESPN backstop the deal to pick up the other half of the NHL if it doesn’t find a buyer between incumbent NBC, Fox and CBS?

Desser:  The news here is that after 20 years of being a secondary national sports product in the US (primary in Canada), the NHL has become sought-after by multiple networks. This will be transformational to the NHL’s national revenue picture, which has lagged for some time since ESPN abandoned it in the early 2000s. Gary Bettman and David Proper have done a great job building the league into a true major league media property.

The sponsorship market seems hot. No issues there. Is it sponsorship revenue alone that is fueling these eye-popping deals?

Kosner: The ad market is hot now, but with ratings down across the board, will there be enough sports GRPs (gross rating points) to buy? Part of the energy here is coming from betting companies looking to build brand as legalized sports betting accelerates state by state – and to use sports to sign up more first-time depositors.

Desser: Sponsorship helps but the main driver of revenue is pay TV subscriber fees and current + future subscription revenue from SVOD (Subscription Video on Demand). The future revenue adds leverage to the valuation as they (like entertainment companies and Wall street) consider the lifetime value of a sub, and right now, valuations on new streaming services are very high for that reason.

Amazon struck hard and is putting lots of dough behind Thursday nights. Can other major digital retailers like e-Bay for instance take an interest. E-Bay engages with 35% of American consumers?

Kosner: I doubt it but it wouldn’t surprise me to see telecom giants like AT&T, Verizon and T-Mobile jump in, using sports to supplement their Netflix, Disney+, Discovery+ offers. They’re the real bundle now.

Desser: I’d also consider competitors of Amazon as potential players…Walmart, Costco, Target are unlikely to completely leave entertainment content + retail to Amazon alone (Amazon Prime is a subscription service which packages together free shipping, entertainment programming, music, photo storage, and many other items to create subscriber value). That could also pave the way for 3-way tie-ups with Apple, Netflix, and Google.

Kosner: I have to admit, David, that Ed seconded your point so maybe I need to reconsider …

How will Amazon measure the results of its investment? Where does it expect to generate its revenue beyond advertising? Can the NFL be a profitable package?

Kosner: Amazon is an eCommerce company – so, gaining new Amazon Prime members (lift), better retention of those Prime members (less churn), targeting TV advertising to those members, presenting them with new commerce opportunities, perhaps a new Black Friday initiative … In general, Amazon can use its superior personalization to grow affinity with NFL fans and take a chunk of ad sales in NFL broadcasts. Most media companies have some sort of black box analysis to tell them whether or not a particular sports or entertainment package is profitable. Amazon is perhaps the most analytic of all sports TV rights buyers. I expect them to make the point internally and externally that their NFL investment is profitable for them.

Desser:  Amazon is unique with ads, promotional value and subscription like traditional networks, plus the data analytics, commerce and future options like ticket sales, travel packages, merchandise and even prescriptions. Figure Amazon to also play in the gambling space as a data-based operation. Thus, Amazon can make money via content in many unique ways giving them a competitive advantage. And added sports content provides justification for Prime price increases as well, which they have proven is highly inelastic. The formula is working very well, as Prime now boasts more US subscribers than all pay TV operators combined, next only to traditional OTA (over the air) broadcasters.

Is the very threat of social media and Direct to Consumer (DTC streaming) marketing forcing the Regional Sports Networks (RSNs) to dig deeper into their pockets so that they’re not marginalized?

Kosner: Yes and RSNs have to embrace both to survive and re-invent themselves.

Desser:  RSNs have valuable, exclusive content that fans want. The marketplace is changing, but content is still king. RSNs are the incumbents, so they start out with established revenues and credibility that newcomers don’t have. Teams are very cautious about how they approach the platform (media). That is the primary way most fans experience their products. That isn’t something easily entrusted to newcomers.  Change will happen, but RSNs still represent value in a changing ecosystem.

What’s the next piece of intrusive technology that will affect the way fans consume games?

Kosner: Sub-second video latency to enable in-play betting, instant highlights, watch party tech and other features.

Desser: The NFL carved out an opportunity in this space in the new deals. Look for others to follow. I also think the idea of live cut-ins as a new product is intriguing.

There is the issue of Sunday Ticket. We know that DirecTV won’t bid again. Where is it headed and how can it differ from a distribution perspective? Any last minute, surprise bidders?

Kosner: Sunday Ticket could go non-exclusive. it’s an appealing product for streaming platforms.

Desser:  Yes, unlike the other NFL packages, Sunday Ticket has always been an à la carte subscription offering, that requires a buy-through, meaning that you had to first buy a DirecTV subscription in order to get Sunday Ticket. This means that it has both direct and indirect revenue opportunities for a licensee. Amazon, ESPN+ or YouTube tv could offer Sunday Ticket as a way to get new prime, ESPN+ or YouTube TV subscribers, and then still charge for Sunday Ticket subscriptions on top. And, like HBO, this need not be exclusive. DirecTV could even keep non-exclusive rights at a lower cost as a retention tool. While it might drive fewer new sign-ups, a non-exclusive deal with multiple players could maximize total NFL à la carte subscription sales.

Will the NBA, MLB and NHL ever go an NFL model and sell all their rights to one network that would also get local distribution rights?

Kosner: if the RSN business unravels it’s likely that some sort of hybrid arrangement will emerge.

Desser: Historically, there was only so much shelf space for NBA, NHL, and MLB on a national basis. This drove the current national/local bifurcation approach. While any change will impact teams in different ways, depending on market size and attractiveness, something more like the NFL model could very well emerge in places from the changing dynamics of the regional business.

What do these leagues and networks do about recapturing young viewers?

Kosner: Most need a new playbook and will have to re-examine their current rights agreements and philosophies around exclusivity, distributing live games and highlights. You have to be where your audience is – and that is going to be increasingly fragmented.

Desser:  This is something that sports has never had to deal with before. The built-in father/son bonding and things like Little League created automatic affinity for young fans. Sports has taken this automatic fan development for granted historically. Now under 30s don’t have pay TV, and prefer Esports rather than playing catch with Dad. Teams and leagues will have to find new ways to get where future fans are in order to indoctrinate them and power the business for future generations.

Betting has been embraced by the leagues. DraftKings recently announced that it’s purchasing VSiN for $100 million. How will it change the way we watch games in the next ten years or so?

Kosner: We are likely to see separate streaming feeds that feature in-play betting. However, most betting activity will probably take place on your phone than on your TV set. The movement of betting companies to get into content (such as DraftKings purchasing VSiN) will probably be hit and miss. I favor connections to live games, influencers versus establishing your own sports media company.

Are you surprised by the continued growth in franchise values – despite the deep losses suffered by the scourge of Covid?

Desser:  Covid is mostly (though not entirely) a transitory event. While it has long term implications, humans continue to be hard-wired to gather. Sports, concerts, weddings, and even business dinners are all things we enjoy. However, never before have we needed to question the wisdom of getting into a room with 20,000 others. This will pose a long- term hang-over, but there is also pent-up demand to eat, play, watch, travel, gather and cheer. The growing number of the world’s billionaires, with little left to spend on after buying a few homes, a jet, and saving humanity, are left with sports franchises as a real life play toy and the ultimate status symbol.

Kosner: The rich “franchise team” will continue to get richer. There is plenty of wealth out there and very few beachfront properties. Values of the 32 NFL teams will benefit from the new TV and betting data deals. Smaller market teams with less certain local TV rights potential may not be as successful.

Desser: It is the most exclusive of all “clubs,” with “initiation” starting in the multiple billions of dollars.

What are the two of you focusing on and what kind of questions are you being asked?

Kosner: I am fascinated by the explosive growth of the video games business and believe it provides a roadmap of sorts for sports.

Desser: I am constantly focused on how the old world of pay TV sports will evolve as a practical matter. The underlying dynamics of changing taste, availability of broadband, expectation of on-demand products of all sorts must co-exist with a historical business model based on nearly everyone paying a small amount for nearly every kind of programming they could want in a huge package. Like when cable evolved from broadcast, and again when digital/DBS (Direct Broadcast Satellite) provided an alternative to cable, the new world of SVOD (Subscription Video on Demand), DTC (Direct to Consumer), and AVOD (Advertising supported Video on Demand) superimposed upon an installed pay TV base provides financial and practical exposure challenges for the sports industry. Trying to be ahead of that curve provides a fascinating, dynamic puzzle to solve.

***

For more information on our guests visit:

Ed Desser www.desser.tv

John Kosner www.kosnermedia.com

John Kosner on “Hot Mic” issues with Sportico’s John Wall Street

Original Article: Sportico, by JohnWallStreet, April 13th, 2021

Back in late March, NHL referee Tim Peel was fired after admitting on a “hot mic” that a penalty called in a game between the Nashville Predators and Detroit Red Wings was predetermined. That slip-up came two months after Golf Channel microphones caught PGA Tour star Justin Thomas uttering an anti-gay slur following a missed putt. (It’s believed he was fined; the PGA does not publicly disclose disciplinary actions toward its members.) That followed just weeks after Meyers Leonard was banished from the Miami Heat indefinitely for using a derogatory term during a live video game stream (Kyle Larson was fired by Chip Ganassi Racing for a similar offense in 2020). But despite the series of costly microphone missteps, a pair of media industry insiders—Mark Gross (senior vice president, production and remote events, ESPN) and Dan Cohen (SVP, Octagon)—expect that leagues will only be providing their media partners with more access moving forward (think: MLB Spring Training on ESPN). “Collectively, the top priority [for leagues and networks] is serving the sports fan, and access is at the very top of the list of what they want,” Gross said.

Our Take: Sports leagues looking to gain younger fans and/or keep them engaged will provide more and more access to their media partners because that is what sports fans have come to expect. “This is an established element of broadcast at this point,” Cohen said. “[The leagues] opened up the opportunity for fans to be this close to the action. [They] can’t close that lid now. Sports leagues are punching into the wind if they think they can [now] turn the ship away from providing consumers a better viewing experience.” Gross agreed, saying, “Access has been increasing for a long time now across sports, so the cat is out of the bag in that regard.”

Research studies done by ESPN during the 2020 season have confirmed that point. When given a choice of alternative production elements, most fans advocated for ones that brought them deeper into the telecast. The element fans were most passionate about was the utilization of player microphones to provide the natural sounds and conversations during a game.

John Kosner was on board with that line of thinking until the recent succession of hot mic incidents. The former NBA and ESPN executive-turned-startup investor now views “the combination of hot mic risk, social media’s instant global distribution and the current unforgiving culture that we all live in” as too great a liability for the big four leagues, and thinks a change in approach is on the horizon. The potential for “players, coaches and executives [to blow] themselves up instantaneously by saying the wrong thing at the wrong time is so palpable that you’re going to have people retreating here. When you have incidents that come up, and the punishment is that the person who makes the mistake is gone forever, there is just too much risk,” he reasoned. Remember, there was already a lot of pushback before the recent series of mic slips.

Kosner suspects it won’t just be the players’ and coaches’ unions, worried about one of their members landing in hot water, that will oppose the increased use of hot mics on the field. “If [a team] has a star player, who is caught saying something offensive, and there is public pressure for the team to sever their relationship with that player, then the owner feels [the burden], the team feels it, and the league feels it,” Kosner said.

Putting on-field/behind-the-scenes audio content on a short delay is a logical enough solution to the problem. Kosner reasoned leagues could “achieve 85% of the value and take out most of the risk” by doing so. But while a delay is fine for the purpose of short audio vignettes or an alternative feed, the approach would seemingly run counter to the leagues’ desire to capitalize on sports betting. “You need a real-time audio/visual feed to make in-game prop bets,” Cohen reminded. In-game sports betting is expected to explode in the U.S. within the next three to five years. For perspective, Bet365 has estimated roughly 80% of sports betting revenues in the U.K. come from in-play bets.

It’s fair to point out, as Kosner did, that “access is just one part of modernizing the game experience to get more [young] people interested.” Providing those fans with “watch party” functionality (commonplace in the gaming world) or any number of other innovations could potentially serve the same purpose. But Cohen says, “While a block party is great and creating multiple feeds with alternative broadcasters is great and tokenizing a match like the NWSL has on Twitch is awesome, none of these different engagement enhancements or innovations replace feeling like you’re a part of [the game] as miking up some of these athletes.”

To be clear, Cohen didn’t deny that “mic slips” can be problematic. But he said leagues concerned about them should focus their attention on accountability and education rather than trying to put the toothpaste (i.e. access) back in the tube. “It’s incumbent upon these leagues to remind people when you’re in public, you’re in public,” he said. “Everyone on the court or field [including the coaches and referees] needs to be aware that [on-court/field mics] are now a normal operating procedure for sports that are broadcast.” Those on or near the field of play simply need to be responsible for the language they use in the workplace—no different than employees in any other field of work.