John Kosner Spoke with Mike McCarthy of Front Office Sports About the Future of the Super Bowl
Original Article: Front Office Sports, by Mike McCarthy and A.J. Perez, February 12th, 2023
More than any major sports league, the NFL embraces systemic change.
Next year, the NFL kicks off the first season of its 10-year media rights cycle with Disney’s ESPN, NBCUniversal’s NBC Sports, Fox Corp.’s Fox Sports, Paramount’s CBS Sports, and Amazon’s Prime Video that runs through the 2033 season.
But once those $110 billion-plus deals expire, all bets could be off.
After leading the fight against sports betting, the NFL did a complete about-face. It now has a sportsbook on the same site as this year’s Super Bowl.
Over the decades, the NFL extended its regular-season game schedule from 12 to 14 to 16 to 17 games. To hell with historical player stats a la Major League Baseball. This league’s all about the future.
Seeking to turn itself into a year-round sport, the league successfully transformed the formerly sleepy NFL Draft into must-see TV. The rapacious NFL has invaded the rival NBA’s stronghold of Christmas Day. Next year it will play a game on Black Friday for the first time.
What’s stopping a global pay-per-view bonanza to beat all pay-per-views? What about playing the NFL championship across the pond?
Let’s get into the time machine and talk about the future of the Big Game.
What If It Isn’t Free?
How much would you pay to watch the Super Bowl 10 years from now?
Yes, the NFL has built its popularity on free television and has broadcast all Super Bowls across over-the-air networks, including this Sunday’s Super Bowl 57 on Fox Sports.
But you can never say never — especially with the NFL potentially able to charge homes hundreds of dollars a pop.
Former ESPN president John Skipper boldly predicted the Super Bowl would eventually leave broadcast TV for a paid streaming or PPV platform. If sports fans are willing to pay to watch Floyd Maywather fight an exhibition boxing match vs. Logan Paul, then surely they’ll pay to watch the biggest, most important sporting event of the year.
“Super Bowl — take that to pay-per-view,” Skipper told Dan Le Batard. “That’s how they’re going to replace the [advertising] money someday.”
PPV expert Joe Hand Jr. told Front Office Sports that a Super Bowl PPV would easily shatter the record for highest-grossing PPVs of all time, saying the NFL could easily charge $200 a home.
Subscriptions and VR
A decade from now, media consultant Patrick Crakes sees the Super Bowl placed behind a paywall.
It will be a paywall that doesn’t exist yet — but one that will boast enough subscribers to reasonably replicate the reach offered by today’s broadcast TV.
“Think of it as a natural evolution from a standalone broadcast TV system to the hybrid system of today, and over to one with just a few paywall video providers with the scale to replicate the current retransmission fee and advertising revenue model that’s nearly tapped out as a high-margin economic source,” said the former Fox Sports executive.
John Kosner, a former ESPN executive, agreed with Skipper’s PPV theory. But only to a point.
Yes, there will be PPV options for future Super Bowls. But not in the way we define PPV today, he said.
By the mid-2030s, he sees the NFL keeping the Super Bowl on free TV — but also selling a variety of lucrative, high-tech viewing options to fans.
Fans will be able to buy virtual reality headsets that immerse them in the game, he predicted.
There will also be volumetric 3D video that gives customers the same on-field view as the quarterbacks. Not to mention a slew of new audio, statistical, and co-viewing options for sale.
“As great a spectacle as the Super Bowl is, we probably haven’t seen anything yet,” Kosner said. “We may just have to pay something for it.”
Future of Betting
The NFL has deals with Caesars, DraftKings, FanDuel, FOX Bet, BetMGM, PointsBet, and WynnBET, and Sunday’s game will be the first to have a sportsbook on the same property as a host Super Bowl venue.
With around two-thirds of states offering some form of sports betting, the American Gaming Association projected 30 million people in the U.S. will place a legal sports wager on this year’s Super Bowl — a 66% increase from last year’s game.
Leigh Steinberg, the legendary agent who represents Kansas City Chiefs quarterback Patrick Mahomes, sees betting evolving and growing over the next decade.
But Steinberg said there’s a potential downside.
“They’re going to have to be very rigid,” Steinberg told FOS. “The existential threat to professional sports is the concept that the games might not be played on a level playing field. And if they ever suspected someone was holding back their performance [due to betting], it would be a disaster.”
Cathy Lanier took over as the NFL’s chief security officer nearly two years before the Supreme Court’s decision in May 2018 that allowed all states to offer state-sanctioned gambling as Nevada had for decades.
“It’s always been part of my job. It’s a bigger part of my job now,” she told FOS. “Like everything else that we do, it’s about relationships. We have very good, well-established relationships, both with [state] regulators along with the sportsbooks themselves. If there are any violations of policy, we take those very, very seriously.”
Last year, the NFL suspended Atlanta Falcons receiver Calvin Ridley and New York Jets receivers coach Miles Austin for violating the NFL’s gambling policy.
Arms Race
The viewing and betting experience isn’t the only thing that could change — the in-person experience is going to get bigger and better.
Across the country, there’s an arms race to host the most popular sporting event in the country. The key: a shiny new stadium.
Last year’s Super Bowl, for example, was hosted at the new SoFi Stadium in Los Angeles. The facility has only hosted events since 2020.
The next Super Bowl will be at Allegiant Stadium in Las Vegas — which also opened in 2020 to accommodate the Raiders’ move to Sin City.
To entice the league, teams like the Titans and Bills have released billion-dollar plans for new stadiums.
The Titans are working on a $2.1 billion project for a 1.7 million-square-foot stadium seating around 60,000. The stadium will have not only a see-through roof, but panoramic views of the city as well. In Buffalo, the Bills are working on a $1.4 billion stadium that could be ready by 2026. Both are slated to receive massive public funding.
Others, like the Dallas Cowboys, are committing millions to renovations — even to stadiums less than a decade old.
International Waters?
The destination outside the stadium matters to the NFL, too. After all, the league is interested in using the event to build fanbases in new regions.
If you thought Las Vegas — once a sporting event pariah — was an unexpected future host, try a city that isn’t in the United States, or even North America. It’s more than possible that a future Super Bowl could land in the U.K., Europe, or Mexico.
Regular-season games in London and Munich have been popular, and Commissioner Roger Goodell has said he’d be interested in placing not one but two teams in London. The Premier League’s Tottenham Hotspur FC were reportedly interested in hosting the Super Bowl at their London stadium.
Whether the overseas ambitions materialize or not, one thing is certain: We can’t expect America’s most popular moment across sports and entertainment to stay the same forever.
John Kosner Spoke with Mike McCarthy of Front Office Sports about FOX Sports’ Talented, Young Super Bowl Announcer Team
Original Article: Front Office Sports, by Mike McCarthy, February 10th, 2023
PHOENIX — The joke about No. 1 NFL TV analyst jobs is they’re like Supreme Court appointments: The lucky few serve for life.
But this elite, highly-paid fraternity will be upended this Sunday as a pair of Super Bowl rookies take over the broadcast booth.
Greg Olsen and Kevin Burkhardt will call Fox Sports’ telecast of Super Bowl 57 Sunday night between the Kansas City Chiefs and Philadelphia Eagles.
It’s been a season of firsts for the 37-year-old Olsen and 48-year-old Burkhart: a pair of Jersey Boys whose relationship dates back to Olsen’s high school football days in Wayne.
On Thanksgiving, the duo called the most-watched NFL regular-season game ever: Dallas Cowboys vs. New York Giants, which drew a record 42 million viewers.
Then they called the Philadelphia Eagles’ 31-7 win over the San Francisco 49ers in the NFC Championship Game. Despite the lopsided score, it averaged 47.5 million viewers.
“I’d called playoff games, but I’d never called a Championship Game,” Burkhardt told Front Office Sports. “So, that was pretty special two weeks ago. Just to get a chance to do that and call a team into the Super Bowl was awesome.”
The ascension of Olsen and Burkhardt underscores how few announcers have called America’s Game.
Immovable Objects
For nearly six decades, the NFL has rotated the lucrative Super Bowl assignment between partner broadcast TV networks paying billions for rights: Fox, NBC Sports, CBS Sports, and the old ABC Sports. The top on-air talents at these networks were usually in place for decades.
The result? Only seven announcers have called the Super Bowl from the broadcast booth since 2010 (That number doesn’t count various sideline reporters and rules analysts over the decades).
NBC’s Cris Collinsworth-Al Michaels, Fox’s Troy Aikman-Joe Buck, and CBS’ Tony Romo-Phil Simms-Jim Nantz have called the last 13 Super Bowls.
If you add Greg Gumbel and the late John Madden and Pat Summerall to the list, a total of 10 announcers have called the Super Bowl since 2001.
The only outlier in the 21st century was Boomer Esiason, who called his one and only Super Bowl on ABC with Michaels in 2000. (The duo hated each other and split the next year. Esiason continued to call the Super Bowl on Westwood One Radio.)
Even when announcers change jerseys, the song remains the same. After calling six Super Bowls together at Fox, Aikman and Buck are poised to call ABC/ESPN’s Super Bowls after the 2026 and 2030 seasons.
Another benefit to Fox? Younger announcers come cheaper.
Olsen is making about $10 million a year, said sources, compared to $12 million for Collinsworth and $18 million for Aikman and Romo.
Sports media consultant John Kosner gives credit to Fox for “zigging” where other networks have zagged.
“They have gone with younger, far less expensive broadcast talent. And coming into the Super Bowl they appear to be a big winner,” said the former ESPN executive. “Kevin Burkhardt and Greg Olsen are appealing. They certainly seem to like each other and they are rising to the occasion. Burkhardt gives Olsen a lot of room. In return, Olsen is insightful, energetic and fearless.”
Changing of the Guard
The genesis for this year’s changing of the guard actually dates back to 2017. That’s when CBS boss Sean McManus shocked the industry by hiring TV rookie Tony Romo for the No. 1 analyst job with Nantz. As a result, longtime No. 1 Phil Simms was shifted to “The NFL Today” pregame show.
Until that decision, the NFL TV scene was a much quieter place. Most top analysts had held their seats for years.
Simms had served as CBS’ lead analyst for 19 years. Aikman and Buck had reigned as Fox’s No. 1 team since 2002. Collinsworth was entering his ninth season with Michaels at NBC. And Jon Gruden was heading back to the NFL after nine pedestrian years in ESPN’s “Monday Night Football” booth.
Olsen actually announced games for Fox while still an active NFL player. During the 2021 season, he and Burkhardt moved up to the No. 2 team.
When Aikman and Buck both jumped to ESPN’s “Monday Night Football,” the duo were promoted to the A Team. As opposed to studio analysis, Olsen enjoys the unscripted nature of calling a game live.
“Yeah, you’re definitely nervous,” Olsen told FOS. “You’re definitely anxious. I mean, you’re gonna be speaking on live television for three hours about a live sporting event that you have no idea what’s really gonna happen. So, you better be prepared for pretty much everything, and be able to rattle it off and spit it out.
“To me, that’s the fun of it. Like that’s the challenge of why I was kind of driven to calling games, as opposed to some of the other stuff, because I think it’s hard to do and I’ve enjoyed that challenge.”
Olsen and Burkhardt will lead a broadcast team of experienced veterans, including sideline reporters Erin Andrews and Tom Rinaldi and rules analyst Mike Pereira.
They can also rely on Fox NFL lead game director Rich Russo and Richie Zyontz, the network’s lead NFL producer. The duo have been part of 29 Super Bowl productions combined.
“They know the enormity of this event,” Russo said. “I know they haven’t done the game. It’s a bigger audience so, you’ll have to pull back a little bit as far as in-depth analysis, but that’s something Greg does well. He’s a great teacher of the game.”
What About Brady?
This week, Tom Brady told Colin Cowherd he’ll be ready to start his 10-year, $375 million gig as Fox’s No. 1 color analyst in 2024.
That means Brady will presumably call Fox’s next Super Bowl after the 2025 season — while Olsen drops down to No. 2 analyst. He’ll lose his productive on-air partnership with Burkhardt, who will become Brady’s partner. His pay will likely be slashed as well.
Without Burkhardt as his partner, Olsen will have to decide whether he wants to stay at Fox. Or if she should pursue a No. 1 job at another network like NBC or CBS. The wisest move would probably be to play the long game at Fox and see if Brady lasts on TV.
Jimmy Johnson, the Super Bowl-winning Dallas Cowboys coach turned analyst for “Fox NFL Sunday,” thinks Brady will benefit from a year off. As with his football career, he expects the seven-time Super Bowl champion to defy expectations in the booth.
“I think Tom Brady will be outstanding. He will work at it for a year. He’ll prepare himself,” Johnson said.
Meanwhile, Fletcher Cox, the star defensive tackle of the Eagles, would rather watch Brady on TV than play against him on the field.
“I think he’ll do a really good job. He’s been around for a long, long time. He’s seen a lot of ball — and he knows ball,” Cox said.
While Fox says the legendary QB won’t appear on Sunday’s coverage, Brady told Cowherd he’ll tune in to check out his future colleagues Olsen and Burkhardt this Sunday.
“I will be 50% watching the game. And 50% listening to those two – and hearing the amazing job they’re going to do, along with the whole Fox Sports crew,” Brady said.
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.
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
"We’ve Officially Crossed the Sports Media Rubicon," John Kosner's Latest SBJ Column with Ed Desser
Original Article: Sports Business Journal by John Kosner and Ed Desser, December 5th, 2022
Our industry reached its point of no return (the “Rubicon”) on Sept. 15, 2022. That’s when Amazon Prime’s streaming service delivered 15 million viewers for an exclusive NFL game, more (and younger) than via traditional pay-TV on NFL Network the same Thursday (Week 2) last season. Under the leadership of Marie Donoghue, Amazon’s technology survived the pressure test. Its Super Bowl-level production complement of six TV trucks and announcers Al Michaels and Kirk Herbstreit provided shock and awe-worthy coverage of the excellent Kansas City-San Diego matchup.
Sept. 15 was a tipping point for sports media. It’s been 35 years since a comparably transformative event — Nov. 8, 1987, when ESPN televised its first NFL game. That telecast heralded an earlier crossing of the Rubicon, starting the sports media balance of power shift to pay-TV from broadcast — buoyed by cable’s then-unique dual revenue streams of affiliate and advertising revenue. In fact, the start of the cable shift, and introduction of daily national prime-time sports, began a decade earlier. In 1977, Ted Turner put Braves games on his Atlanta Channel 17 “SuperStation,” novelly distributed via satellite, to content-hungry, growing cable systems nationwide. Similarly, streamers have been carrying live sports in recent years — just not close to what Amazon achieved this fall.
Over the past four decades, the cable TV industry’s desire to build out its technical plant, and motivate 90% of U.S. TV homes to subscribe, drove cable networks like ESPN to program nightly live major league sports and others to offer uncut, commercial-free movies, 24/7 news, original kids content and music videos. Today, crown jewels like “Monday Night Football” and the college football championship air exclusively on cable, which also has deals for all major pro leagues and college conferences. Sports has proven its unique ability to drive distribution before (NFL putting Fox on the map; and NBA making TBS a full national service, then launching TNT). The best entertainment programming has already made the move: Amazon, Netflix, and HBO Max regularly win awards for best drama, comedy, etc. Now, the question is: Will the streamers have the same desire to fully distribute their platforms by harnessing sports rights in a similar manner?
It seems inevitable:
Prime Video and Netflix each now reach more homes than cable (nearly as many as broadcast TV).
Each major sports league (except so far the NBA) has an exclusive streaming package, and the major soccer properties including MLS, Premier League, La Liga, Serie A, UEFA and Bundesliga are primarily distributed via streaming.
Apple, Disney (including Hulu and ESPN+), Paramount+ and Peacock all now also carry major live sports.
Amazon, Apple and Google each have market caps that dwarf all traditional media companies combined, against whom they can bid for future, more expansive sports rights.
In particular, Amazon is a frightening disrupter because unlike traditional media companies:
It knows not only how many of its subscribers watched each NFL game, but also exactly who they are, and where they live!
Also, how many minutes they watched, when they logged on and off, the streaming device they used, and if they were on a mobile or wired network, watching via Prime Video or its sister service Twitch. (It achieved 15 million viewers on Sept. 15 despite being a product tilted to big screen viewing; advances in its mobile app will only fuel more viewing on phones.)
Amazon knows what other programming that home also watches, and what music they like.
It knows what actual products that home buys, and what they spend each year on e-commerce.
Amazon also has their email, phone and credit card numbers; Alexa even recognizes their voices!
As a result of this Amazon revolution, sports fans who were once largely anonymous — with no direct relationship with the broadcaster, league or team — are suddenly, continuously and personally connected.
In fact, Amazon represents a new world order — it has a triple revenue stream: Amazon Prime subscriptions, advertising and its viewers’ e-commerce purchases. In addition to AppleTV+/Music/News subscriptions and its own burgeoning ad business, Apple also has a third stream: hardware (iPhones, iPads and Macs). With the three revenue sources, immense cash reserves and global scale, Amazon and Apple can choose to investment spend on anything they wish, elbowing out traditional media competitors, provided they believe it can ultimately benefit their core business.
Having crossed the Rubicon, what’s next?
In terms of game coverage, we see an end to delaying the start and/or joining a game in progress. Every game will be shown in full, complete with the pre/postgame shows. If a game runs long, you can watch it, or the next game (live or delayed), or even watch both simultaneously.
We also foresee the demise of the standalone broadcast. Amazon is complementing its Michaels/Herbstreit main broadcast with other feeds including from Dude Perfect and LeBron James’ The Shop; that’s just the start. Apple will stream MLS games worldwide; and sports now has an instant global backstop service option.
From a business perspective, dated exclusivity grants will be re-examined by rights holders looking to supplement linear reach to target different demographics via non-traditional platforms.
For the fans watching, there will be more variability, customization and creativity. That’s all to the good. But, all of that will come at a steeper price with more service subscriptions and increased fragmentation. After all, crossing the Rubicon is one-way only, and not toll-free!
Ed Desser is president of Desser Media Inc. (www.desser.tv). John Kosner is president of Kosner Media (www.kosnermedia.com). Together they developed league strategy and ran the NBA’s media operations in the ’80s and ’90s.
John Kosner Discussed The Future of Sports Media with Warren Tredrea and Andrew Montesi for The Big Deal Podcast
Original Article: The Big Deal Podcast, November 9th, 2022
In this fascinating interview, John talks about:
Pioneering broadcasting as Michael Jordan transformed the NBA
Building and growing ESPN’s online sports platform
Lessons learned from sports business icon David Stern
The evolution of media rights, and what it means for rights holders, sports organizations and fans
The biggest investment opportunities in sports
Challenges facing the sports industry and a looming ‘reset’
What it takes to build a successful career in the industry
And much more. Listen below or on Apple Podcasts, Spotify and Google Podcasts.
Michael Smith discusses John Kosner's work on the value of NCAA media rights in the Sports Business Journal
Original Article: Sports Business Journal, by Michael Smith, October 31st, 2022
College Basketball: The Times, They Are A-Changin’
The face of college basketball is changing.
Two of the game’s winningest coaches and greatest ambassadors, Mike Krzyzewski and Jay Wright, have retired and no longer will be marching up and down the sidelines. College basketball’s most familiar voice during March Madness, CBS Sports’ Jim Nantz, will say goodbye after the 2023 Final Four.
GETTY IMAGES
Some of the best teams in the nation, like preseason No. 1 North Carolina, will be led by veteran returning players who are juniors and seniors, not the talented one-and-done passers-through who use college basketball as a way station before matriculating to the pros. And schedules are being assembled to accommodate the shifting conference alliances that so often are dictated by the strength of football.
And change isn’t just happening between the white lines. It’s happening off the court and in NCAA meeting rooms in Indianapolis as college leaders contemplate the future of March Madness, the composition of Division I, the expansion of the men’s and women’s basketball tournaments, a new media rights deal for the women’s basketball tournament and new offseason playing opportunities.
All of these transitions are intended to make the game more equitable, appealing and sustainable to the players, the fans and the stakeholders that rely so heavily on its success, while also keeping pace with so many of the shifts in the college landscape — from name, image and likeness to massive player movement through the transfer portal.
“Our business is like that now — everything is a balancing act,” said Dan Gavitt, NCAA senior vice president of basketball. “We have to start thinking about things a little differently. We’re all trying to develop new fan bases, younger fan bases, and engage with fans in different ways. To do that, you have to step out of your comfort zone sometimes, try new things or take events to new places.”
Gavitt will play an instrumental role in many of the college basketball decisions across the horizon. New men’s Final Four sites will be selected next month for 2027-31. A summer series of basketball exhibitions, starting as soon as August, could help college basketball reach a broader audience and provide its players with new NIL opportunities.
Other shifts in the landscape, such as the make-up of Division I and modified championship brackets, will be driven by the NCAA’s Transformation Committee and the Division I Council.
“There’s probably not a lot different that’s above the water this year that a fan would notice,” Big East Commissioner Val Ackerman said of the primary issues in college basketball. “Most of the rules are the same; the tournament format is the same. But there is a lot going on just beneath the surface of the water that administrators and coaches are paying a lot of attention to.”
With that as the backdrop, what follows is a deeper dive into the biggest issues and storylines facing men’s and women’s college basketball, ranging from tournament expansion to media rights and possibly some new innovations that might generate new revenue, as the season tips off this week.
Demonstrating the shift from one-and-done for the top players in college basketball, North Carolina stars Caleb Love (left), R.J. Davis, Leaky Black and Armando Bacot are back this season to lead the preseason No. 1-ranked Tar Heels.
AP IMAGES
NCAA BRACKET MADNESS
Does tournament expansion bring enough financial benefits to merit the growth?
Expanding the NCAA men’s basketball tournament from 68 to 75, 96 or even 128 teams is a discussion worth having, but nothing formal has emerged out of the governing body. Commissioners Jim Phillips from the ACC and Greg Sankey from the SEC have floated the benefits of growing the tournament by 28 or so games — theoretically creating more opportunities for teams that ordinarily would be living on the bubble.
The coaches are becoming more vocal as well. Baylor’s Scott Drew and Missouri’s Dennis Gates advocated for tournament fields of 128 teams last week. The thinking is that there are 363 teams in Division I and a 128-team field would put 35% of the teams into the championship. Other informal proposals have recommended 25% of the teams should make the postseason. In Division I basketball, that would equate to 90 teams in the tournament.
Former Duke coaching legend Mike Krzyzewski will be missing from the Blue Devils’ sidelines, and March Madness, for the first time in more than 40 years.
COURTESY OF DUKE UNIVERSITY
What does that bracket look like? Would CBS Sports and Turner agree to that? Are there any provisions in the NCAA’s media rights contract for additional revenue for an expanded tournament?
Sources indicate that more games would not guarantee more media revenue.
That has prompted a range of reactions about March Madness, most notably that it shouldn’t be fixed if it’s not broken.
It's understandable that those who direct the Power Six leagues (the Power Five plus the Big East in basketball) would push for a larger bracket, the thinking goes. Most of those teams that are on the bubble come from those larger conferences and more at-large bids would most likely increase the chances for teams in the P6 to make the tournament.
There are multiple scenarios that would accomplish the goal of expansion. Going to 96 or 128 teams, while somewhat watering down the product, provides opportunities for conference champions to retain their status as automatic qualifiers while also providing more spots for at-large teams.
Another scenario involves growing the tournament field just slightly — to 75 teams or so — and creating more of the play-in games. That raises the question of whether teams mired in perpetual play-in games are actually part of the tournament or not, and it scares the schools in the smaller conferences because they worry that their automatic bids might be in jeopardy.
For a commissioner like the Big West’s Dan Butterly, access is everything. So, when NCAA committees start talking about taking away automatic qualifier spots for conference champions — no matter the sport — he gets nervous.
“Automatic qualifier spots represent opportunities,” Butterly said. “That would have a pretty big impact on every conference that’s not a high-resource conference. Fortunately, what I’m hearing is that the transformation committee is doing everything they can to protect the automatic bids [for the conference champions].”
Both retired Villanova coach Jay Wright and Jim Nantz of CBS will no longer be a part of March Madness after Nantz calls his last Final Four in 2023.
GETTY IMAGES
BEEN DOWN THIS PATH BEFORE
More games doesn’t guarantee more tournament revenue.
There was a time in 2010 when the NCAA proposed expanding the men’s basketball tournament field to 96 teams. There was an expectation that the media rights would grow exponentially, creating a windfall of new revenue for the governing body and its members.
The response from the networks who saw the presentation never matched up with the NCAA’s expectations. It turned out that there just wasn’t much interest in paying more for a handful of games that pit mediocre teams against one another, even if they played under the March Madness banner.
“The money just isn’t there to make the leap to 96,” Ohio State Athletic Director Gene Smith said when he chaired the basketball committee at the time. “A lot of us assumed more inventory would mean more money, but that just wasn’t the case.”
That’s one reason many college basketball stakeholders don’t expect the men’s tournament to grow to 96 teams in this next iteration of the championship. Ultimately, though, the revenue will have to match up with the larger field.
“The NCAA’s championships really have not been right-sized for a long time,” West Coast Conference Commissioner Gloria Nevarez said. “We haven’t taken a lens to the championships unless it was for cost savings or cost cutting. How are we traveling teams? How do we seed in regionalized brackets? It’s not just what we can afford to do, but if we’re going to be transformational, let’s look at what should these championships look like.”
The men’s and women’s NCAA tournament fields have had 68 teams for years, but there is steady talk about adding schools.
GETTY IMAGES
UNBUNDLING MEDIA RIGHTS
Could separate negotiations help women’s basketball break out?
The NCAA is considering an unbundled approach when it takes its championship events to the media marketplace, which would enable the governing body to sell media rights to the women’s basketball tournament separately. That’s a significant change to the way the NCAA has negotiated in the past.
“We are very seriously considering breaking up the package and exploring whether there’s greater value in selling the championships individually rather than as a bundled package,” Gavitt said. “Time will tell, but that’s the work we’re doing now — how best to position those rights to take them to the market.”
One stop, then another.
In this new era of player movement, athletes are bouncing from one school to the next. A look at stats related to men’s and women’s basketball player transfers in Division I in 2021.
Source: NCAA Get the data Created with Datawrapper
The current media rights agreement with ESPN for all Division I championships, except men’s basketball, pays the NCAA about $40 million annually. The way the deal is structured, though, has been the source of considerable debate, especially the past two years. For as long as the NCAA has taken these championships to the marketplace, it has sold them as a package, believing that a bundled set of rights was the most efficient way to sell them. There is growing skepticism about that now.
As more fans began showing up for the women’s Final Four and watching the games on TV, the growing popularity of the women’s basketball tournament became more evident. What finally shed some light on the championship was the 2021 event in San Antonio, where Oregon’s Sedona Prince shot a video of the meager workout facilities at the team hotel, compared to what the men had in Indianapolis. That led to the Kaplan Report, which evaluated the media arrangement as part of its analysis.
The NCAA was leaving millions of dollars on the table by going to the marketplace with all of those championship rights bundled, Ed Desser and John Kosner wrote in the report.
ESPN’s media rights contract runs through August 2024. The network and the NCAA will begin negotiations about this time next year. The NCAA’s Gavitt and Lynn Holzman — vice president of women’s basketball — will take the lead for the governing body, supported by media consultants who have not yet been hired.
Endeavor’s Karen Brodkin and IMG’s Hillary Mandel have done some analytical work for the NCAA in the past. Separately, consultants Desser and Kosner wrote the analysis for the Kaplan Report.
Ackerman: “We’re closing in on the time to make these decisions. Sometime next year, the NCAA is going to have to figure out what sports it’s going to take to the market separately versus bundled."
“There are tremendous opportunities if we unbundle,” Nevarez said.
An unbundled approach would enable the NCAA to take some of its most valued championships, such as baseball and softball, ice hockey and volleyball to the marketplace individually.
The potential drawback would be whether there’s enough competition for those media rights to truly drive the prices higher. Whether the championships are bundled or unbundled, the media rights’ value might be dictated by a lack of interest beyond the walls of ESPN.
Butterly: “It would be a positive step” to unbundle the rights. “You see the growth of women's basketball and women's sports overall. I mean the emphasis being placed in that area. … I think that would be a positive to be able to separate it and allow it to be a standalone event, so you’d really provide that opportunity for continued growth at the event.”
INNOVATIONS FOR THE FUTURE
Changes could provide new opportunities, fresh ideas as college basketball adjusts and adapts.
Summertime basketball, midseason conference tournaments, conference all-star games, revenue units from the women’s basketball tournament. These new or developing concepts along with name, image and likeness, the transfer portal and tournament expansion, could give college basketball a much-needed refresh in the next few years in an overall landscape driven more than ever by college football.
South Carolina women’s basketball coach Dawn Staley, whose team won the 2022 national championship, is interviewed by SEC Network sideline reporter Steffi Sorensen in March at the SEC tournament.
GETTY IMAGES
None of the ideas are slam dunks, though, and most would require an unprecedented level of cooperation among schools, conferences and media partners.
But concepts like a midseason all-star game, out-of-season contests between conference foes who are not scheduled to play one another in a given season, and summertime basketball certainly sound like further “professionalism of the college game,” said Brooks Downing, whose agency, BDG Sports, runs basketball events throughout the season.
There’s an NIL factor involved in these schedule modifications and neutral-site games as well. In the past, event promoters would pay a fee plus expenses to secure teams in their events. Now, sources say, schools are demanding that payments go to the NIL collectives that funnel the money to the players as NIL income.
It’s the end of an era and the beginning of a new one. The game is changing on a variety of levels and it could look different in the next few years.
Ackerman: “Innovation is all around us, especially if you look at what the pro leagues are doing. So, I think the challenge for college sports leaders is to keep a good thing going, but also how to keep it from backsliding or getting stuck.”
"How To Be a Great Sports Media Partner," John Kosner's latest SBJ column with Ed Desser
Original Article: Sports Business Journal, by Ed Desser and John Kosner, October 17th, 2022
The Seven Habits of Highly Effective Media Partners
Recently, we wrote how the unique NBA on NBC partnership changed our industry and elevated the NBA (Sports Business Journal, Sept. 19, 2022). The friendship of visionary leaders Dick Ebersol and David Stern galvanized both organizations. But you don’t have to be an industry icon to become an excellent media partner. It is a way of thinking about relationships, creating value for all. Here are seven pointers we’ve picked up from our experiences at the NBA and after:
The answer is “Yes!” The best way to build mutually beneficial relationships is to view the success of your partner as your success. Make your default to figure things out, which frequently will be contagious. When Bob Iger was CEO at Disney, he spoke often about the importance of optimism — bring that to your relationships!
Over-deliver: Doing more than what is expected makes an impression. When CBS broadcast the NBA, it used three to four replay devices. Moving to NBC, we wanted four or five. NBC made eight replay units standard, even for regular-season games. We did not have to ask. That approach pushes the other partner to go above and beyond too.
Anticipate needs: What’s better than getting “Yes!” for an answer? Again, never needing to ask. For example, we knew which NBA arenas had poor lighting and/or camera locations. We took those challenges on ourselves, before partners complained. That spirit continues today as the NBA initiates technical enhancements that provide future solutions for the league’s global broadcasters.
Know your partner’s business (better than they do): That was quintessential David Stern — not satisfied with the NBA being experts of (only) our domain. Hyperbole? Sure! But the emphasis is right. We knew how important the Olympics were to NBC. That drove urgency in the formation and marketing of the 1992 Olympic Dream Team and all that followed. Did that success extend to the NBA? Of course, but that’s the point of effective teamwork. The NBA was similarly instrumental to Turner, agreeing to switch from TBS to TNT once the latter reached 30 million subscribers (achieved in record time) — a possible streamer’s tactic today.
More partnership examples from other sports:
When it renewed its deal with Fox in 2020, the NHRA knew the network had to hold multiple fall Sundays open for NFL doubleheaders, even though the NFL would only schedule single Fox windows on half of those dates. By planning a series of “playoff” races on several straight fall weekends, NHRA could guarantee Fox an event on at least one of those “singleheader” Sundays. On Sept. 18, following its NFL game, the NHRA on Fox drew 1.7 million viewers, its most-watched race ever.
In 2010, ESPN and MLB’s digital arm BAM were spirited competitors although ESPN was (and is) a longtime MLB rights holder. At ESPN, we knew the quality of BAM’s streaming infrastructure and discussions revealed an opportunity: BAM was built for the baseball season, while our streaming needs were focused on college football and basketball. The result: BAM became a valuable “white label” solution for ESPN, setting the stage for Disney’s eventual purchase of BAMTech five years ago.
Fox has a lighter event calendar in the spring. The Pro Bowlers Association developed a weekly “PBA Playoffs” series after college basketball ends, providing weekly content for Fox and an additional programming series for the PBA.
Forge true partnerships: In 1990, the NBA had a lot to prove when NBC scheduled a huge increase in games from the handful CBS had broadcast. To deliver the highest possible audience (and ad sales), we needed a great schedule. NBA scheduling savant Matt Winick and Ebersol worked together each summer to craft key matchups to maximize audience. In fact, Dick sat backstage during the NBA Draft (which NBC wasn’t even carrying). An emphasis on similar “win-win” teamwork yielded a revenue-sharing approach, which strengthened NBC’s and Turner’s advertising businesses and ultimately paid the NBA hundreds of millions extra from sales growth. And in 1997, the partners combined to launch the WNBA, which just completed its 26th season!
The same partnership logic applies to smaller properties. The National Finals Rodeo in Las Vegas is the sport’s Super Bowl. In 2020, the Professional Rodeo Cowboys Association moved its full-season linear TV events package to Rural Media Group’s RFD-TV/Cowboy Channel, securing added rights fees and a more comprehensive broadcast schedule. Rather than selling its direct-to-consumer product in a lucrative streaming deal to a third party, the PRCA doubled down, co-developing The Cowboy Channel Plus, a rodeo-oriented DTC product with its partner RMG.
Think big: Extraordinary relationships can deliver unheard-of innovation. Together, the NBA and NBC developed “NBA Inside Stuff,” a weekly tween-targeted show about league personalities. We still hear from young fans who grew up watching it.
Finally, over-communicate! Schedule regular get-togethers. Plan a preseason summit meeting for executives from each company. Do a postseason debrief. Develop social relationships at your events. This fosters goodwill and leads to true successes, while minimizing the risk of the worst-case scenario: surprising your partner with bad news. And when you are dealing with bad news, remember, delivering that news quickly can actually be a gift — especially if the partners address the problem together. That’s the value of a trusted relationship.
Considering today’s myriad challenges and ever-increasing marketplace complications, being a good media partner is even more important. It’s a state of mind, and a way to get noticed!
Ed Desser is an industry expert witness and president of Desser Media Inc. (www.desser.tv). John Kosner is president of Kosner Media (www.kosnermedia.com). Together they developed league strategy and ran the NBA’s media operations in the ’80s and ’90s.
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.
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.
The NBA On NBC Partnership: The Relationship changed sports media and crowned the NBA," John Kosner's latest SBJ column with Ed Desser
Original Article: Sports Business Journal, by John Kosner and Ed Desser, September 19th, 2022
NBA Commissioner David Stern and NBC’s Dick Ebersol worked together to greatly expand the league’s coverage.
AP IMAGES
“A spectacular move!” Sports fans know the clip — Michael Jordan switching hands in mid-air to score; the call from the legendary Marv Albert. But we’re writing about another, similarly spectacular move made by the and NBC on Nov. 9, 1989:
NBC stunned the industry 33 years ago by paying the NBA $600 million-plus, more than triple what the incumbent had been paying, putting the NBA on the map, cementing the visionary reputations of NBA Commissioner David Stern and NBC Sports President Dick Ebersol as sports impresarios, and birthing a truly unique league/network “marriage” that netted (pun intended) a massive “win-win.” It represented a pivotal moment in our careers, and reordered sports media, transforming the NBA.
First, the context: Ed joined the NBA in 1982 as its director of broadcasting/executive producer; John started out as programming assistant at CBS Sports. That season, CBS scheduled only five regular-season NBA games — each involving the Lakers, Celtics and 76ers. Until 1982, weeknight NBA Finals were on CBS late-night tape-delay, so concerned was CBS not to air NBA games in prime time during the crucial “May Sweeps.” The NBA was a programming stepchild. “Our fans like us,” Stern once mused to John, “but they don’t like themselves for liking us!”
The NBA began to rally in its final years with CBS, as Ted Shaker took over as executive producer, adding innovations like “At the Half with Pat O’Brien” and slicker productions that highlighted the many emerging NBA superstars, like Jordan. Just after 6 p.m. ET on Sunday, May 7, 1989, Jordan electrified the nation, hitting the hanging, series-deciding, buzzer-beater over the Cavs’ Craig Ehlo in the opening round of the playoffs. We took note.
We were now working together at the NBA. CBS itself shocked the industry (and us) by paying $1.1 billion to take away NBC’s 41-year national TV “birthright,” providing NBC with airtime and motivation, and us an opportunity.
The rise of Michael Jordan, shown here after winning the 1991 title, further added buzz around the NBA and NBC’s coverage.
GETTY IMAGES
With the NBA’s TV agreements expiring, we set out to -ize the NBA so that it could become the premium network sports property after football season. Rather than accept a network-centric new agreement, we drafted our own form, specifying key required elements — “the stuff.” We wanted weekly Sunday doubleheaders, “major sports” level of production equipment and an actual pregame show “in a studio,” not in front of a wall of monitors or a temporary set in the stands, as CBS had resorted to for budgetary reasons. And we wanted substantial on-air promotion, and cross-promotion between network and cable partners, to expand audience awareness of the NBA. “We willingly promoted games that were airing on, even though it was unheard of at the time,” Ebersol notes in his new book. Our goal made it very hard to stay with CBS, which had the NCAA Tournament, PGA Tour, and now MLB. And, perhaps most importantly, CBS didn’t see the NBA as we … or Dick Ebersol did.
“Within 48 hours of when I started the job at NBC Sports, I went to … meet with David. We hit it off from that point,” Ebersol recalled recently. “Prime time was what we were selling — not just for the Finals or later rounds of the playoffs, but finding ways of getting Sundays into prime time.” Of course, Ebersol and Stern recognized the Jordan/Ehlo effect too.
Ebersol is on the Mount Rushmore pantheon of sports legends, along with his mentor, Roone Arledge, and Stern. What distinguished Ebersol and Stern was that not only did they think big — they did big. That summer, Ebersol (who ultimately served as NBC’s chief executive, programmer, and executive producer for the NBA on NBC) traveled to D.C. to meet with FCC reps — the topic: Could a sports program that contained educational content qualify for the mandated Saturday morning Network TV kids block? The answer wasn’t “no.” Ebersol’s legwork begat “NBA Inside Stuff,” a weekly program produced by NBA Entertainment that ran midday on NBC just prior to live sports every Saturday for 12 years, indoctrinating generations of young adults to the NBA.
So strong was the partnership between Ebersol and Stern, and their respective standings so high with their employers, that Albert’s trademark “Yes!” became the default response when the league or network asked something of the other. As Ebersol said in his book, “the partner always came first.”
Links to NBC / NBA video clips:
John “Tesh Roundball Rock”
NBC’s signoff (all the great moments)
An “NBA Showtime” pregame show from the first season
In a novel move, NBC provided the NBA with a $10 million/year bank of prime-time promotion, which led to the “I Love This Game” campaign. A dozen-plus executives, production people, marketers and ad sellers from both sides gathered weekly for lunch, forged relationships and created great value together. They were afraid not to because Ebersol and Stern made cooperation and success an imperative. “Meetings like that had never happened before in any partnership between a league and network,” Ebersol said. The evocative “joint logo” was emblematic of the parties’ collaborative, integrated spirit.
One star was Jim Burnette, head of NBC Sports sales. Burnette knew the NBA was particularly strong in the second quarter, which was heavy auto sales season. He boldly expanded CBS’s previous two NBA-exclusive auto advertisers to eight, each getting one-quarter of exclusivity and four units every other game. And he moved fast. At the 1990 Super Bowl, Burnette successfully made the pitch, getting seven autos (including GM, which bought two eighths). He also lined up McDonald’s as the halftime sponsor, locking in revenue of hundreds of millions in just a couple of months. Shortly thereafter, the economy collapsed. CBS’s first World Series was a competitive and financial bust (a four-game sweep). But the NBA on NBC was already on a solid financial launchpad.
Two years later, when the NBA and NBC extended their already hugely successful agreement early, the parties added an ad revenue share. That heralded an unprecedented amount of information-sharing and created a practically unheard-of fertile environment, where the league was actively seeking advertisers for its network partners and vice versa.
Eight years after the NBA on CBS had scheduled a five-game regular-season slate, NBC aired 26 games featuring 14 teams. Now there was a legitimate pregame show, “NBA Showtime,” superbly hosted by Bob Costas, and the doubleheader games voiced by play-by-play legends Albert and Dick Enberg. The sidelines were patrolled by Ahmad Rashad, who initially bristled at Albert’s tag, “The Dean of Sideline Reporters,” until he realized that fans liked it. The first NBC analyst, Mike Fratello, was similarly dubbed, “The Czar of the Telestrator.” John Tesh wrote the score, “Roundball Rock.” It was a show, and it was fun.
Whereas CBS was often plagued with local station preemptions, Ebersol had NBC affiliate relations offer the NBA schedule as an “all or nothing” block. The stations had little choice and the NBA had 99%-plus distribution. This helped ratings, as did Ebersol’s understanding of Nielsen. By forgoing a pre-tip break, Nielsen would start the national rating during live action, and the closer the last spot ran to the end of the game, the higher the game’s average. In its first season, NBC was also rewarded with a dream Chicago-L.A. Lakers final, an actual changing of the guard from to Michael, and a ratings hit.
NBC offered the prime-time exposure, and shoulder programming, the NBA needed to boost fandom.
GETTY IMAGES
In late April 1992, the Rodney King riots gripped L.A., scrambling the playoff schedule. Working together with the NBA’s longtime schedule maker Matt Winick, we imagined an opportunity. With three games on Sunday, May 9, but only a doubleheader booked for NBC, what if … we could convince NBC to go at 12:30, 3:00 and 5:30 p.m. ET — the first NBA network tripleheader, climaxing with a must-watch game: the champion Bulls with Jordan at the Knicks with Patrick Ewing and coach Pat Riley. Going nearly unopposed 5:30-8 p.m. ET on Sunday wasn’t possible at CBS (“60 Minutes” was untouchable). But we got to “Yes!” quickly, also by borrowing another NFL innovation: offering the local NBC stations a halftime news break to make up for the news preemption. That night, the Knicks shocked the Bulls, providing a powerful NBC prime-time lead-in during the May sweeps. From then on, tripleheaders and the late Sunday window became the norm for the NBA on NBC, many distinguished by remarkable performances from Jordan.
Stern taught us to understand and strategically use our “assets.” The 1992 Olympics Team is a great example. The USA team had to qualify for Barcelona. The NBA and NBC staged and marketed their “Beatles-like” Dream Team debut. At the Olympics, Ebersol opened prime time with Dream Team games, introducing huge audiences to stars like Karl Malone, David Robinson and Charles Barkley — not to mention Larry Bird, Magic and Jordan, captivating the world and catapulting the NBA to an even higher orbit.
“I miss David every day of my life. He was a … stimulator in my life and a great, loyal friend,” said Ebersol last month. Stern would have said the same, especially if the NBA retained the 5:30-8 p.m. ET time slot and a share of ad revenue!
Today, Ed Desser (www.desser.tv) and John Kosner (www.kosnermedia.com) each operate sports media consulting businesses. They collectively served three decades as the senior media executives at the NBA, collaborating during the heyday of the NBA on NBC.
"Make Media & Tech Innovations Work for You," John Kosner's latest SBJ column with Ed Desser
Original Article: Sports Business Journal, by Ed Desser and John Kosner, August 29th, 2022
You ain’t seen nothin’ yet!
That’s our feeling about sports media. As you try to follow the accelerating changes, we’re here to help. Our suggestion: Follow the Tech. We see nine key innovations changing our industry this decade:
Real-time information: The power of sports is that it’s live and its intrinsic appeal cuts across all demographics, getting everyone simultaneously focused on a single event. Yet, we’re just scratching the surface. You’re typically streaming 45 seconds behind live action. Trying to find a game? Good luck! Powerful solutions are coming — score fixes for your phone and wearables, sub-second latency streaming, and the race is on to provide the 21st century sports “TV Guide.” No more sports fan FOMO! Instant custom curation of live events, triggering tune-in for start of games, significant in-game reporting, social interaction, sharing of remarkable plays and propagation of data to drive gambling.
The cloud: It’s fashionable to deride personalization as an overhyped pipe dream. But the ascension of giant cloud companies and privacy-protection software will enable sports properties with significant data to join forces, unlocking the ability to truly know their fans, creating huge value. And for fans, finally, the opportunity to get value from that shared knowledge such as combined packages of streaming, tickets, merchandise and exclusive team/player access. But cloud innovations extend well beyond that. Today, game telecasts can be directed on an iPad and voiced from any location on the globe with a high-speed connection.
Games: Growing up, TV was our default. Now, playing games is mainstream — as an activity and a business. In the past five years, viewing of esports and game streamers has exploded on Twitch and YouTube, transforming spectators into participants. See the effects in traditional sports game presentation (EA’s Madden has meaningfully influenced NFL coverage with Skycam for NFL telecasts). Today’s carefully produced live-event megacasts will soon be supplemented by platforms giving everyone a voice. Here, podcasting presents a true launching pad. Example: JJ Redick on ESPN. League video game rights may rival broadcast fees (see FIFA’s next agreement following its 30-year partnership with EA).
Betting: Consolidation in sports betting will trim today’s dozen players into a big 3-4, and the reality of sports’ “big bet” on gambling will play out. Betting advertising will become national too. Other effects are uncertain. Through aggressive industry marketing, some fans are already more interested in their fantasy players or action on a particular game rather than “their” team. We foresee increasing friction over vague “official” injury reports. In-action wagering, powered by sub-second latency streaming, is also coming. Look for MVPDs to embrace “live live” sports as a rationale to stay subscribed to the endangered TV bundle. All of this will challenge the unified fabric that’s traditionally made sports, sports.
Artificial intelligence: Startups mastering computer vision (“Shazam for Video”) are revolutionizing everything from content algorithms to sports video highlights, social media monitoring, athlete scouting and combating streaming piracy. Astonishingly, most of these breakthroughs will be invisible to fans. Fans will find themselves watching more TikToks, not sure why, but noticing more, better and increasingly tailored services. The combination of relevant AI data and cloud breakthroughs will further accelerate development of new sports products and services.
Networks for everyone: As audiences continue fragmenting, today’s social media networks will simply be “networks,” proliferating especially among elusive younger fans. The dominant social media experience at the 2028 L.A. Olympics has probably not even been created yet! Rights holders will have to work much harder just to identify and engage their audiences. Networks have already established virtual sports bars for fans to gather and express fandom, promote content and events, allowing players and teams to directly communicate, an on-ramp to …
The metaverse: At the height of COVID, 300 million people attended 2D interactive meetings on Zoom — building blocks of the metaverse, where people go to do things together. As Everblue’s games expert Dylan Glendinning explains: “A place where your digital identity is just as important as your physical identity.” Our former colleague Steve Hellmuth points out the significant role of key NBA partner Microsoft. It hosts sports and games (Xbox, Halo and soon, presumably, Activision), and it’s a leading funder of the metaverse, making virtual workplaces productive (270 million active “Teams” monthly). Expect the creation of new 3D interactive services as sports and games experiences merge.
Premium streaming: We expect streaming’s superior user experience to continue slowly decimating the traditional TV bundle. From a business standpoint, it’s a mixed bag. Streaming allows content owners to go direct, eliminates the need for middlemen, creates many new bidders for rights, allows for wide variety of new offerings and has created an exciting market in sports docs. AppleTV+, Prime Video, FloSports, ESPN+, Paramount+ and Peacock each expand demand for live sports while simultaneously attacking the bundle (where the money still is), spreading audiences thinner. In addition, for the most popular games, streaming millions of feeds is inherently inefficient versus traditional multicasting. The challenge, regardless, will be getting young fans to pay considering that …
Free streaming is also exploding. Not just YouTube, Twitch, Snap, Instagram, Twitter, but also the doppelganger FAST services (free ad-supported streaming) being launched by all top pay TV networks, the vast competition for time and attention from user-generated interactions detailed above, and pay TV piracy.
There is no clean, well-lit path ahead. Our best intelligence is to improve your product by making these and other technical innovations work for you.
Ed Desser is an industry expert witness and president of Desser Media Inc. (www.desser.tv), which has advised on over $30 billion in sports/media transactions. John Kosner is president of Kosner Media (www.kosnermedia.com), a digital media expert and sports startup investor. Together they developed league strategy and ran the NBA’s electronic media operation in the 1980s and ’90s.
Questions about OPED guidelines or letters to the editor? Email editor Jake Kyler at jkyler@sportsbusinessjournal.com
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.”
"Why the Metaverse will be Epic," John Kosner's latest essay with J Moses
Original Article: Why the Metaverse Will be Epic, by John Kosner and J Moses, June 13th, 2022
Avatars from Blueberry Entertainment
It’s June, 2025 and we have tickets to the NBA Finals in Boston. Before we attend the game, we’re picking up one-of-a-kind outfits from Blueberry Entertainment. Yes, these outfits are actually for our avatars only (we have them for every game) … we’re attending the Finals in the NBA metaverse. And 19,580 fans will be there in person at TD Garden and the game will still be broadcast on network TV. But now there’s a new way to experience all of the action. NBA Commissioner Adam Silver has made the point that globally 99% of NBA fans never have the opportunity to see a game in person – now we are all another step closer. As is the connection between sports and games.
Peter Warman, the co-founder and now chairman of Newzoo, has fashioned the game’s version of “Moore’s Law” – namely that every five years since the breakthrough of online games in 2002, total engagement with games (measured by the number of people playing multiplied by hours spent) doubles. We’ll call that “Warman’s Law.” Over the past 20 years, we’ve seen unique accelerants like mobile and the free-to-play business model. The most-recent doubling to 1 trillion hours of engagement from 500 million has been driven by streaming of Esports and game streamers on Twitch, YouTube, and their Asian peers.
Warman makes the point that games and their developers put engagement first and believe money will follow. And it has. He estimates that in 2022, games will drive a stunning $203 billion in DTC (direct to consumer) purchases alone. That is larger than film, TV, and music combined and growing faster than all of them. Warman forecasts that the next double will be driven by the Metaverse and, within that, NFTs (non-fungible tokens) and P2E (play-to-earn) games – introducing ownership and authenticity to digital, making it easier to integrate with the “real” world.
Warman also has a measured definition of the Metaverse that we agree with: “a place people go to engage in any way or combination of ways they desire, together with others.” Games biz whiz Dylan Glendinning of Everblue Management, adds: “a place where your digital identity is just as important as your physical identity.”
We believe this is already happening.
Will the future of the metaverse be 3D interactive, virtual or augmented reality, all or none? Right now, we don’t think it matters. From a tech standpoint, the key to us is compatibility … and that’s why we think a game company is best situated to help fans begin to realize that potential. Game companies already allow players the most flexibility to express themselves in digital environments – not just to socialize, but to play games, flex for each other, even build actual businesses together.
When we were growing up, turning on the TV was the default leisure activity. Now, games are mainstream – both as an activity and a business. There are the games, the gamers (3.1 billion worldwide; half spending $11 per month on game content … talk about “RCS” – recurrent consumer spending!), the young audiences, game engines, and game developers. And, ascendant in youth culture per Warman’s stats, Esports.
There are a number of game companies with tremendous potential to build big businesses in the Metaverse … our focus today is Epic Games. They appear to have all the pieces – and a key differentiator, Unreal Engine (UE).
It starts of course with Epic’s existing metaverse, the online game Fortnite. Epic released Fortnite originally in 2017. It has become a global phenomenon, attracting 350 million players. Every day, gamers gather to play with friends and other players in the Fortnite metaverse. They own stuff. On the platform, they attend concerts, hang with celebrities, shop the Epic Games Store. It’s annually a $5 billion ecosystem with its own currency, V-Bucks, that can be bought with real-world funds, but also earned through successful activities within the games. In fact, Epic sells $3B of digital skins alone per year. Later this year, the Fortnite Esports tournament will return after a 3-year COVID hiatus.
Now imagine Fortnite gamers able to stroll around a much larger 3D metaverse. One that includes not just TD Garden but also SoFi Stadium, Wrigley Field, movie theatres, music clubs, and sports betting establishments. In their gear. With their friends. Packing their Fan Tokens. Able to use their V-Bucks to watch sports, concerts, or movies.
And, Epic has another huge advantage. It owns Unreal Engine, the game engine Epic uses to run Fortnite. It is a strategic asset. Games are notoriously expensive and difficult to create. Unreal is free-to-use for non-commercial use and levies a low royalty fee on big-budget games, saving thousands of developers millions of dollars of dev work. UE offers a full menu of products that can easily be purchased and integrated into any game; new development will enable the creation of NFT-based P2E games. Today, most popular games today are sitting on either Unreal or its competitor engine, Unity. Per Epic, 48% of next-gen console titles are being built on UE as well as eight titles that have generated over $1 billion. Here is what matters most: all of these games built on the Unreal platform have some form of compatibility and a partnership opportunity with each other.
This is critical because we believe the Metaverse will mirror today’s game business: walled gardens. And the key to success in the Metaverse will be compatibility or in the Web3 vernacular – “composability.” If you own stuff and currency in one metaverse, you’re going to want to take it to other metaverses. We might live in a decentralized future but a definitive advantage goes to the metaverse where the most people hang out – because that metaverse is going to be able to leverage the other metaverses, drive subscriptions, micropayments, etc. Discord plays that centralized decentralized role as a communications platform right now.
In addition to its 350 million Fortnite players and all of the new game development using UE, Epic is also building a war chest and mounting a challenge to Roblox and Minecraft in pursuit of time spent from young audiences. In April, Epic announced a $2 billion funding round, featuring additional investment from Sony and The Lego Group parent company KIRKBI. Including the new funding, Epic now has a valuation of $31.5 billion. Teaming Epic with the creators of both the Playstation and The Lego Group presents significant opportunities.
Of course, the competition too will be epic.
Meta, formerly known as Facebook, is single-mindedly focused on building the metaverse – in a way as Jack Dorsey observed that only a founder-led company can be. Meta is VR-centered as it has continued to build out its Meta Quest platform. But will our children choose Facebook as a metaverse hub vs. one created by a game company? We don’t think so. Games are the biggest entertainment category for Gen Z and Millennials and a close second (to music) with Gen X.
Microsoft could have an early edge. Not only will it host sports (key partner with the NBA) and games (Xbox, Halo, and soon, presumably, Activision) but it is among the major corporations funding the first iteration of the Metaverse, focused on making virtual workplaces productive, leading with its Teams product (270 million monthly active users). Microsoft is also a trusted brand. Note: Xbox and Unreal Engine have been partners now for 20 years. Within games, Roblox has more players compared to Fortnite, plus the ability for users to author content within their ecosystem. And Niantic, the Pokémon Go creator, raised $300M at a $9 billion valuation last November to build a metaverse based on augmented reality and the outside world. Niantic’s Lightship AR Developer Kit (ARDK) enables game developers to build AR games for free if they have a basic knowledge of the Unity game engine, the key UE competitor.
To Newzoo’s Warman, the Metaverse is nothing more than a natural evolution, pioneered by games two decades ago. We agree and see both sports and games as early winners. Sports because its large passionate audiences drive new experiences and businesses. And games because they will define the development of the Metaverse. On that front, Epic has a significant head start with Fortnite, a healthy balance sheet, strategic partnerships, and Unreal engine. But like the gauntlet run by the NBA Finalists, there’s a Murderers Row ahead with Meta, Microsoft, Niantic, Roblox, Riot, Take-Two, Sony, Steam, and the many, many others.
Game On!
This is the fifth in a series of essays about why games are ascendant in culture, especially among young people, and what those of us in Sports, Media, Investment … all of us in business … can learn from games. In our last installment, "The Adrenaline Economy" published in May 2021, we noted that Fans want action, involvement, real-time engagement. Entertainment options providing that electrical current are thriving; those that don’t are falling behind. We noted that one service with adrenaline is TikTok, "The World's Fastest Growing Game." We wrote that the massive virtual goods business in games worth $79B annually is coming to sports, finally, with the advent of “NFTs,” non-fungible tokens, "Is Gonzaga an NFT?" And we opined about how games naturally promote and benefit from super-engaged communities "A Trillion Hours! Why Community Is The Game Behind The Games."
John Kosner is President of Kosner Media (www.kosnermedia.com), a digital and media consultancy, and an investor and advisor in sports tech startups. He was the senior digital executive at ESPN for 15 years. J Moses has been in and around the Sports, Games, and Tech businesses for over 40 years. He has been a Director at T2 since 2007 and is currently an Executive Producer on a scripted Esports show for the CW (www.optinstudios.com).
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.
“The Sports Streaming Evolution Halftime Report,” John Kosner’s Latest SBJ Column with Ed Desser
Original Article: Sports Business Journal, by John Kosner and Ed Desser, June 6th, 2022
The sports media industry is evolving, as streaming platforms begin to occupy beachfront once exclusive to linear TV. This is the first material platform change since cable arrived over 40 years ago. So where does this evolution stand, and what does it portend for the future?
First, let’s recognize what has not changed. Despite the decade-loss of 30 million subscribers, traditional linear networks continue to own the key rights for all major U.S. sports properties. Back to the future, a growing 18 million homes get top events ranging from four NFL games/week to the NBA Finals, World Series, Olympics, and PGA Tour, via a $15 antenna.
However, much has actually changed. Three of the four major pro leagues have made significant streaming moves. The bellwether NFL has sold Thursday Night (albeit its lowest-profile package) exclusively to Amazon. Recent MLB and NHL deals have included new streaming rights with AppleTV+, Peacock, YouTube, ESPN+, and Turner. Every major international soccer package (and perhaps soon, most MLS) is provided via streaming. Sinclair is planning a direct-to-consumer version of its RSNs, and half of the UFC is on ESPN+. Thus ESPN+, Peacock, and Amazon are already must-haves for big UFC, NHL, NFL, and soccer fans, in addition to cable.
Recently, streaming’s seeming inevitability hit a speed bump: Netflix actually lost subscribers … and half of its market cap. Suddenly all entertainment companies were under scrutiny. The vaunted NFL may license Sunday Ticket to a streamer, Apple, Amazon, or ESPN+, but it hasn’t happened yet. Has the pendulum started swinging back to traditional TV?
Far from it.
The traditional one-size-fits-all bundle of linear channels to 90% of U.S. homes is gone. The broadcast networks have lost 95% of their adult 18-49 average prime-time entertainment ratings over the past four decades. Today, “prime time” more aptly describes each of Amazon and Netflix’s ~75 million U.S. subscriber universes and even the 95% of 18-29-year-olds who use YouTube; indeed, consumers love streaming (3+ hours/day!). Undifferentiated, all-you-can-eat linear programming buffets are giving way to more targeted, optional packages, all with much better navigation and curation, with or without ads and/or sports, and priced depending on ads, number of streams, or resolution quality. Sports are no longer a required buy for all pay-TV viewers. For sports fans, however, discovery of what you want has become much harder (good luck figuring where) with an average viewer now using seven different video sources!
Major rights packages including the Big Ten, NASCAR, Big 12, Pac-12, and NBA are soon coming to market. Will prior packaging persist, or will the shift to streaming continue? Yes!
Despite losing substantial reach, and more of their audiences, linear networks remain the primary gathering place for live sports. The sports industrial complex retains the experience, know-how, relationships and affiliate and ad revenue streams. Most important, the incumbents need to remain heavily invested in sports. Yet, each of them (except Fox) is also investing heavily in streaming. ESPN+, Paramount+, Peacock, and HBO Max are all in growth mode. They require marquee, monthly, differentiated content like sports to drive and retain paying subscribers.
Digital giants like Apple, Amazon, Netflix, and Google don’t necessarily need sports yet. However, commoditization is contributing to rising churn for all streamers. Every app is basically the same: an endless stream of horizontal tiles. It’s harder to distinguish any particular on-demand entertainment content, especially when so much is already free on YouTube and TikTok. Sports is the only genre that drives passionate audience day-and-date “tune-in” nightly at scale. And as leading streamers including Netflix are now embracing advertising, nothing tops sports.
Looking forward, we anticipate that streamers will return to favor — especially those buoyed by sports. That will trigger further growth in sports rights, powered by bigger streaming allocations.
We expect other changes, too. With fast-shrinking pay-TV plus slow-growing OTA-only homes, about 90 million today have sports access to the premier events. That leaves a rising 30 million outside the main sports ecosystem, without linear TV! Streaming better serves the 100+ million broadband homes — so look for leagues to further embrace that growing medium.
Also, just 34% of 18-29 fans buy network packages. These millennials spend just 20% of their entertainment screen time on TV, compared with 52% for baby boomers, and are far less interested in entire games.
Streaming-influenced changes in games packages are also on the way. Live, full-length games will continue to be offered, in more ways (ManningCast, BradyCast?), but there will also be a multitude of new sports formats targeted at different fan interests. Real-time “Red Zone”-like offerings of portions of games, heavier use and distribution of customized highlights, and integration of live events with gaming, social media, commerce, gambling, and NFTs will continue to change the game-viewing experience. Whoever succeeds in enhancing discovery for live sports viewing will have a true business breakthrough.
When we started at the NBA, the ultimate prize was a big broadcast TV package, with prime-time games, which automatically delivered massive audiences. Viewing is now splintered, but sports always cuts through. We expect more platforms embracing sports to attract (“lift”) and retain subscribers (as cable has done for decades). But, for now, the traditional sports media players will leverage their leadership continuity, albeit at thinner margins, as they build streaming businesses. Like the victors of the NBA and NHL finals series, it will take an extraordinary effort to win.
Ed Desser is an expert witness and president of Desser Sports Media Inc. (www.desser.tv). John Kosner is president of Kosner Media (www.kosnermedia.com). Together, assisted by Neil McDonald, they developed league strategy and ran the NBA’s electronic media operation in the 1980s and ’90s.
"How should smaller properties cope with the shrinking sports media pie?" John Kosner's latest SBJ column with Ed Desser
Original Article: Sports Business Journal, by John Kosner and Ed Desser, April 18th, 2022
By now, most are aware of cord-cutting, streaming growth, and the related tectonic changes hitting the sports media industry. Elite properties like the NFL, NBA, and “Power” college conferences will remain strong draws for the traditional sports TV players, as well as the new tech ones — earning continued exposure and rights fees. But in an era of diminishing pay TV revenue where bigger players, especially the NFL, are taking a far greater share of the shrinking pie, how do small and midsized sports compete in this new normal?
Let’s start by recapping the score:
NBC has shut down NBCSN, reducing linear shelf space;
The entire RSN business is in danger of collapse;
The remaining national sports cable networks have been losing 1-2 million subscribers per year;
Pay TV affiliate revenue increases are only barely keeping up, and most all of that goes to support the major sports; and
Network broadcast prime-time adult entertainment audience ratings are disappearing: down 93% over the last four decades.
What to do?
I. Prepare.
Don’t leave your sports media negotiations to the exclusive negotiation period. Properties should be doing long-term scenario planning, considering options, looking at adjustments, and rethinking their business models. One can’t expect double-digit growth to continue uninterrupted without meticulous preparation. Know your agreement(s), when they end, and project what the world may look like at that time.
II. Be Flexible.
Just being on a national sports cable network is not the end all be all anymore. Reach is down. Not only are these networks’ average viewing much smaller but so is the effectiveness of any promotion from them that you’ve been promised. Paying a network for airtime, only to have them fail to deliver a sizable audience — or worse still, rely solely on you to do so — is wasteful. Consider all the alternatives.
Viewing is increasingly fragmented. Streaming is ascendant; it’s how more and more audiences expect to find most content. Emerging talent like Pat McAfee at FanDuel and properties like Barstool and Overtime have scored significant viewership and attention operating off the pay TV grid. But while there is no barrier to entry, streaming comes with significant fixed costs, and heavy reliance on the host property to market, sell, and produce. You can go it alone, or partner with a streaming partner to save some of those hassles — but if you’re on another’s platform you give up the benefit of direct business relationship with your fan base … a huge incentive to pursue direct-to-consumer (DTC) to begin with. Research is necessary to estimate buy rates, packaging options, and pricing. Unlike being on cable, streaming is hardly turnkey.
III. Think the Way the Potential Buyers of Your Sport (Networks and Fans) Do.
When we started working together at the NBA four decades ago, NBA Finals games aired on late-night tape delay. In fact, the NBA drew lower audiences than horse racing, boxing and bowling. Our NBA was certainly not today’s global juggernaut. Our league office colleagues and teams had to think differently — and we did. We started literally by itemizing our media “assets” and assessing how they were and should be utilized. Rick Welts, then the president of NBA Properties, created compelling decks (using actual slides!) that helped us create and then refine our narrative.
Ask yourself a bunch of questions:
What is “the story” of your sport? Do you have a tight version of that ready to present in multiple forms of media?
How well do you understand your community of fans? Are you able to marshal them?
Are you willing to take chances (“do anything”) to distinguish your product? If so, how and how much?
Are you investing in storytelling, including and especially from your athletes, to get audiences outside your core to care? It’s now part of lore that F1 commissioned “Formula 1: Drive to Survive” on Netflix and now its ratings have exploded on ESPN. The truth is it’s easier for small properties to take fans behind the curtain — there’s less to lose.
Do you have a real-time data feed available for your events — key to data and betting company deals and fan fantasy and wagering?
Do you have your own updated “assets” list?
It’s all less risky than you might think. Failure to take chances probably places you further behind the juggernauts, and the new sports audiences relish (and now expect) customization, curation and behind-the-scenes access (live and on demand). Accommodate their preferences!
IV. In This Quest, Technology is Your Friend.
You don’t need an army to appear to have one. Sophisticated sports artificial intelligence startups can create and instantly distribute personalized sports video highlights to all leading social media networks simultaneously. Others can identify your social media audiences and your super users who spike awareness for your sport. Need to add real-time interactivity to your app? There are partners for that. Best of all, these startup companies compete themselves and are hungry to build businesses like yours to be able to tell their success stories too.
In this world of Goliaths and infinite choice, nothing comes easy for small to midsize sports properties. Nonetheless, these exercises we are suggesting can be both exhilarating and lucrative. Start this necessary work today!
Ed Desser is an industry expert witness and president of Desser Media Inc. (www.desser.tv). John Kosner is president of Kosner Media (www.kosnermedia.com), a digital media expert and sports startup investor. Together they developed league strategy and ran the NBA’s electronic media operation in the ’80s and ’90s
John Kosner is quoted about the media value of the Women's NCAA Women's Gymnastics Championship in the Wall Street Journal
Original Article: Wall Street Journal, by Louise Radnofsky, April 13th, 2022
AUBURN, Ala.—Hours before the biggest college basketball game of the year, Auburn’s basketball arena felt like the loudest place on earth. The roaring wasn’t for basketball. Women decked out in orange, families with young children, couples, older men and students were all screaming for the Tigers at a college gymnastics meet.
“This is our first time,” said Lori Wilson, who flew in from Lakewood, Fla., and said she was loving it. “Our boys’ fraternity is having a moms’ weekend and we were looking for something to do,” she said. Her son and his fraternity brothers were watching in another part of the arena.
It’s been dubbed “The Suni Effect”: a megawatt moment for women’s college gymnastics brought about by the change in NCA A endorsement rules. For the first time, Olympic gold medalists can compete for a college team without forfeiting lucrative professional opportunities—including the reigning all-around champion Sunisa Lee, who has spent much of her busy freshman year marketing herself and her sport.
This golden hour is emerging around the country, but probably nowhere as intensely as at Auburn, as Lee and her college team advanced from the NCAA regional round their school was hosting. The Tigers’ performance propelled the team to the national championships in Fort Worth, Texas, where they will compete in a semifinal Thursday. The title will be awarded Saturday.
The reaction to Lee getting a “perfect 10” on the balance beam was enough to endanger tender eardrums. But so was the shouting when her teammates, Derrian Gobourne and Drew Watson, performed on floor and vault, respectively. The crowd of 6,166 bellowed: “It’s great to be an Auburn Tiger.”
By most metrics, it is. The school says it sold out every regular meet this season. The average price of an Auburn women’s gymnastics ticket sold through online ticket marketplace Vivid Seats from January to March 2022 was $53, up from $29 in 2020, the company said. Around 26% of the Auburn athletics tickets sold on the secondary market during that time were for women’s gymnastics. Just over 16% of tickets were for men’s basketball, in which Auburn rose to the No. 1 AP ranking for the first time in program history this season.
Gymnastics draws a diverse, majority-female audience desirable to many marketers for their household spending power. And Auburn has lines of small children waiting by the Charles Barkley statue outside the arena—not to pose by the legendary basketball alumnus, but for Auburn gymnasts to sign their posters and take pictures with them.
But it’s equally capable of drawing the football team. Tight end Micah Riley-Ducker said he goes whenever the team is competing at home, and at the regional event, was paying close attention. Had he ever seen gymnastics before? “Not until I got here and met them.”
There’s also enough interest for a restaurant here to put a different regional gymnastics round on one television screen, and Duke-UNC’s national semifinal in the basketball championship on the other.
None of this should be surprising. Women’s gymnastics is the marquee event of the Summer Olympics, even after revelations of the physical dangers and abuse for many of the athletes. NBC says that as many as 18.9 million saw Lee take the all-around title in Tokyo on television alone.
The college version of the sport is, in many ways, more comfortable viewing. Its gymnasts have leotards that are often more fun, with more exciting hair and an attitude that is almost breezy when contrasted with elite gymnasts. College floor routines have better music and more personality, many of them built to go viral. The skills are slightly reduced, but performances typically look more secure. And there’s the prospect of rooting for a school.
“I just like the whole collegiate thing,” said Roger Riley, an electrician attending the regional meet with his wife Shannon, a preschool teacher and longtime Auburn fan. “And I like the floor routines. They can be themselves.”
It wasn’t always this way. Auburn and other gymnastics powerhouses like Utah, LSU, Alabama and Florida can pack their arenas now, but it took years. Many of those coaches credit the SEC Network for televising meets since 2014, with the “Friday Night Heights” franchise. The SEC, for its part, credits the coaches with a P.T. Barnum-like approach to staging a meet.
SEC associate commissioner Tiffany Daniels said that the popularity “has also made ESPN more bullish about wanting to show more gymnastics.” ESPN, meanwhile, has worked with coaches to create a more viewer-friendly “final four” format in recent years than past championships, which involved six teams in a hard-to-follow rotation.
“It streamlined our championship and made it extremely fan- and TV-friendly,” said D-D Breaux, the LSU head coach for 43 years who retired in 2020. It made scoring easier to understand, she said. It also made it possible to create a bracket.
The women’s 2021 national championship, when aired for the first time on ABC, drew 808,000 viewers for an unprecedented Michigan victory that gave gymnastics its own claim to spring upsets. The 2022 final will be on ABC again.
Capitalizing on this success will be difficult for the NCAA, however, for the same reasons that are pinching the increasingly popular NCAA women’s basketball tournament. Media rights and corporate sponsorship deals for the events are captive to long-term deals that undervalue them.
The NCAA’s TV deal for the gymnastics championship has long been part of a package—for rights to 29 championships that aren’t men’s basketball—that ESPN currently pays about $34 million a year for.
At the same time, potential sponsors of the women’s gymnastics championship have to go through CBS and Turner, the broadcaster of the men’s basketball tournament, in a separate deal that runs through 2032. The arrangement erects a barrier to companies that might not be interested in sponsoring men’s basketball but see a different, valuable proposition in women’s gymnastics.
The lack of revenue dedicated specifically to sports like women’s gymnastics allows the NCAA to say, for example, that they lose money on the championships. This includes the pandemic-staged version in 2021, for which the organization declined to quantify the loss, and 2019, the first with the “final four” format, which the NCAA said was around $400,000 short of breaking even.
An analysis commissioned by the NCAA to examine gender inequities in its championships found that the arrangement significantly undervalued events like the women’s basketball tournament. Consultants Ed Desser and John Kosner, who worked on the report, said the tournament could be worth $100 million a year in media-rights fees alone starting in 2025 after the current deal ends.
It isn’t clear what the potential value for the gymnastics championship would be, but it’s clearly more than it is now. ABC also aired the first-ever regular season meet on broadcast TV this year, Alabama-Florida, drawing 624,000 viewers. ESPN and ABC are both owned by Walt Disney Co.
“ESPN is upgrading gymnastics to windows on ABC not because it’s benevolent,” said Kosner, who was previously ESPN’s head of digital media. “They can see and hear the interest.”
If the package were broken up, Kosner said, it could also create more competition for the rights. “The original package was designed in a way that ESPN was practically the only entity that could broadcast all these championships,” he said. “If you don’t create a package that only one bidder could handle, you’re going to get more bidders.”
The sponsorship arrangement could also be revised, said Desser, a former NBA executive. “If you’re willing to get your hands dirty, it’s all doable.”
The NCAA said it would explore options to grow all championships at an unspecified later date. It confirmed that businesses currently have to go through the NCAA Corporate Champion and Partner Program, and that plans to change are among the long-term recommendations from the gender equity review that the association is still considering.
For schools and coaches, however, the moment is here already.
Marcy Girton, the chief operating officer for the Auburn athletic department, says the school has drawn interest from fashion, apparel, cosmetics and beauty product brands about becoming a sponsor or advertising at meets next season.
“If you look at our attendance rates across the country, they’re going up. Viewing rates have been going up. And then the Olympians coming in,” said Jeff Graba, Auburn’s head coach. “It’s a great time. It just shows what’s possible in this sport.”
Write to Louise Radnofsky at louise.radnofsky@wsj.com