John Kosner Spoke with Doug Greenberg of Front Office Sports About The Return of Slamball
Original Article: Front Office Sports, by Doug Greenberg, July 30th, 2023
Good morning, I’m Doug Greenberg. When I was a kid, in the days just before always-accessible internet, my friends and I would watch SlamBall reruns on SpikeTV. The blend of basketball, football, and trampolines seemed perfectly fit for the early 2000s.
The sport, which made its return after 15 years on July 21, sees players soar up to 18 feet in the air for three-point dunks. And it’s full-contact, though the league does have its own set of foul rules.
If SlamBall is going to survive — or even thrive — 20 years after its initial debut, it’s going to have to capture a whole new audience’s attention in a whole new way.
Nostalgia Brought SlamBall Back. Can It Survive Among The Startup Leagues?
In 1999, Mason Gordon drew out the concept for SlamBall on a napkin.
Inspired by video games like “NBA Jam” and “NBA Street,” the TV producer imagined a full-contact basketball-football hybrid amplified by trampolines — sorry, “springbeds” or “tramps,” as Gordon will quickly correct you.
“Trampolines, people think Cirque du Soleil,” he recently said on the Front Office Sports Today podcast. “This is a legitimate, competitive sport. Our guys are trying to win and hoist the trophy at the end of the series.”
Each SlamBall game is made up of four five-minute running-clock quarters. Four players from each team take to a specialty spring-loaded floor that features four tramps surrounding and under each of the hoops. Players can score two or three points like normal basketball — but can also score three points through dunks.
The original SlamBall was more akin to professional wrestling, the Harlem Globetrotters, or reality television than an actual sport. Games were pre-taped from a Los Angeles studio and edited to fit into neat half-hour windows for cable channel SpikeTV (now Paramount Network).
Gordon and business partner Mike Tollin wanted more. Following the 2003 season, the pair were determined to air games live. When the league couldn’t convince Spike or other networks, the league shut down. An IMG-backed revival on Versus and CBS in 2008 folded after one season amid an upheaval in management at the agency.
But a generation grew up with SlamBall seared in its collective consciousness — and 15 years later, on July 21, 2023, the sport returned live on ESPN.
“The TV landscape is dominated by live sports, and there are so many peripheral, tangential sports that might be considered participatory that are now being consumed in large numbers,” Tollin told Front Office Sports. “We just feel like this is what we always intended.”
Like many startup sports leagues, SlamBall faces an uphill battle to survive, and it won’t be able to rely on millennial nostalgia alone. But the sport has the right backing, media deal, and expertise to make it work — if it plays its cards right during this first six-week season in Las Vegas.
“This can’t be like the SlamBall of old,” says Gordon. “This has to be the best SlamBall that’s ever been played to make it live and worthy of ESPN’s air.”
Buying In
The most obvious question for SlamBall’s return: Why now?
It started with fans and the hashtag #BringBackSlamBall, which the league says has garnered more than 200 million impressions on social media — and which Gordon claims, “was wholly organic, we had nothing to do with it.”
From there, Gordon and Tollin found a who’s-who of sports investors for an $11 million Series A funding round, including HBSE co-founder David Blitzer, HBSE limited partner David Adelman, Fanatics CEO Michael Rubin, entrepreneur Gary Vaynerchuk, and six-time NBA All-Star Blake Griffin.
The round was led by renowned investor Roger Ehrenberg, whom Tollin says is “very methodical” and “kicked the tires long and hard.” Ehrenberg emphasized the importance of a strong media deal and the presence of betting in the fledgling sport.
That first hurdle wasn’t terribly difficult for the league to clear.
Tollin is extremely well-respected in the sports media space, having executive-produced ESPN’s “The Last Dance,” “The Captain,” and many episodes of “30 for 30.” He also produced the scripted sports films “Hardball,” “Radio,” and “Coach Carter” — which was based on SlamBall coach Ken Carter’s time coaching high school basketball.
Tollin says the league had “half a dozen suitors” from media companies with live sports presence across linear, cable, and streaming, and described the process as “competitive.” With its pick of the litter, SlamBall chose ESPN on a two-year deal that will reportedly pay the league a rights fee and allow it to handle production.
“SlamBall is a unique sport that we all remember and continues to still live in that highlight reel even from years ago,” ESPN senior director of programming and acquisitions Ashley O’Connor says. “We’re always looking for differentiated content to continue to fulfill and round out our basketball coverage, which is truly a year-round sport.”
Tollin says he and Gordon have had to exercise a “different muscle” to produce live TV. The pair have pored over every detail, from how to set up angles for eight cameras to implementing a rotating cast of commentators (like former NBA player Nate Robinson), all with the knowledge that there is no take two.
Between the approximately 30-minute games and highlight-reel plays, the league plays well to younger demographics with increasingly short attention spans.
“When you think about 2002, 2003, 2008, it’s a lifetime ago in our industry,” says sports media consultant John Kosner. “That’s all pre-streaming, it’s all pre-social networks. So if you were conceiving of a sport today, you’d probably have a lot of the elements that they have in SlamBall.”
Vegas Residency
To fully take advantage of sports betting and capitalize on other obvious perks, SlamBall decided to lay its roots in Las Vegas.
In the five years since PASPA’s repeal, sports betting has exploded into a massive American industry. SlamBall’s founders knew they had to leverage it this time around.
After evaluating the first week of games, Tollin says that BetMGM, Caesars, and Circa were expected to carry SlamBall lines for this weekend’s slate — though it would only be inside the physical Vegas sportsbooks and limitedly online at first.
“It was so obvious, and there was never a discussion about [Las Vegas],” says Tollin. “We thought, OK, it’s coming right off the NBA Finals, which leads to the Summer League. Why don’t we just piggyback on Vegas, where the entire basketball community has congregated for the last two weeks?”
SlamBall booked a six-week residency at UNLV’s 2,400-seat Cox Pavilion, taking over the space less than a week from the end of Summer League. The league is only committed to Cox for this season, but has every intention of staying in Las Vegas for future seasons and calls Cox a “strong partner.”
Mike Newcomb, UNLV’s senior associate AD for facilities and events, says workers practiced setting up SlamBall’s extensive court at a separate venue to be ready.
Newcomb notes that the trickiest part of booking SlamBall was clearing six straight weeks for the league to take over the space — but that it made all the sense in the world.
“Las Vegas is obviously a great place to host everything,” he says. “I’ve been at this facility for 27 years and have seen how the city has changed since sports were an afterthought… People used to be scared to come here with that, but I don’t think that’s the case anymore.”
Staying Power
The league has played only three full seasons in its 20-year American history — so the threat of folding again is ever-present.
On what was supposed to be an ordinary July night in the sports world, SlamBall was unlucky enough to play its first games opposite the USWNT’s first 2023 Women’s World Cup match and Lionel Messi’s Inter Miami debut. A mediocre 212,000 viewers tuned in to ESPN, per SportsMediaWatch — certainly disappointing, but a “blip” Tollin says the network understood.
Injuries — sometimes gruesome — were a concern during SlamBall’s first go-around. The league addressed this by outfitting players with elbow pads, knee pads, padded combat shirts, ankle-roll guards, ankle braces, and custom padded headgear.
It’s all part of the process of legitimizing SlamBall and reaching the potential Gordon and Tollin envisioned 20 years ago.
“I think you have to go into these things thinking that a startup sports league is by definition going to be a big challenge,” says Kosner. “What constitutes a success is somewhat subjective… Overtime Elite, PLL, and Drone Racing League are not the NFL or EPL yet, but they’re still in business, and they’re still growing.”
Assuming moderate success this summer, SlamBall’s growth plans involve staging multiple tournaments per year both in the U.S. and abroad, where the sport has had some unexpected success after the 2008 collapse with a professional league launched in China. It also wants to launch a women’s league.
The trick will always be to balance spectacle with substance.
“As this game is being consumed as a real sport, it’s really important that the gameplay be more sophisticated, more varied, and surprise you,” Tollin says. “Yes, there is an enormous wow factor to SlamBall, but we also want to sustain the long-term, deep involvement of a fanbase.”
John Kosner Spoke with Doug Greenberg of Front Office Sports About The NBA & NFL Programming Year-Round
Original Article: Front Office Sports, by Doug Greenberg, July 16th, 2023
Good morning, and welcome to the Front Office Sports Sunday newsletter. I’m Doug Greenberg, here to take a look inside the NBA’s plan to become a year-round presence in sports.
Last weekend, the league hosted the first NBA Con — a gathering of NBA fans in Las Vegas that included appearances from NBA legends and stars, concerts, and the kind of exclusive perks one would expect from a fanfest like Comic-Con. It also used the platform to announce the In-Season Tournament — the league’s first Euro-soccer-style cup tournament.
I spoke with officials in and around the NBA to find out how and why these events will benefit the league in the long run as it attempts to chase down the NFL for year-round sports supremacy.
The NBA Wants Your Attention All Year Long
July represents the dog days of summer — and typically the slowest part of the NBA calendar.
The Denver Nuggets hoisted their first Larry O’Brien Trophy as champions in June, and aside from some strong buzz this month from the NBA Draft, trades, and free agency, the NBA chatter should usually die down until the fall, when teams return for training camp and preseason games.
But nowadays, the league wants more: It wants fans to be plugged in — and spend — even when meaningful games aren’t being played.
“As we think about this larger experiential moment, it’s with the thought of the fan always being put first,” NBA head of event strategy and development Joey Graziano told Front Office Sports. “Is this something that the fan is willing to be able to get off the couch and go to? And if the answer is yes, then I think it opens up a number of business drivers for us.”
This summer in particular has been a treasure trove for hoop heads and casual fans alike — and it’s largely been driven by one man. Victor Wembanyama, the French international sensation and basketball unicorn, has dominated headlines ever since the San Antonio Spurs won the lottery to select him first overall in the draft.
Wembymania hot-wired the NBA’s marquee — but historically speaking, relatively quiet — offseason event, the Las Vegas NBA Summer League.
Tickets for his debut game sold at record prices on the secondary market, and TV viewership was the second-highest ever for the tournament (Zion Williamson’s 2019 debut was responsible for the previous and current records, respectively). Overall, the opening weekend of Summer League averaged 456,000 viewers per game — the most ever for broadcaster ESPN.
Summer League has grown in influence over the years, and the 2023 edition, which concludes Monday, has clearly provided a spark. But the 77-year-old league is striving for a level of year-round sports omnipresence not often seen in the United States.
It’s going for the top shelf: the kind of domestic attention usually reserved for the NFL — and internationally, the undying appeal of soccer.
“I think the fervor [from fans] always was there,” sports media consultant John Kosner tells FOS. “It just wasn’t exploited because neither the NFL nor the NBA had yet really expanded their programming beyond their seasons.”
The Personal Touch
The NBA’s mission isn’t just about putting on more events, but also increasing the quality of its offerings at existing ones. That’s why last summer, it created NBA Experiences — a program of premium packages designed to bring fans closer to players off the court.
NBA Experiences sets up shop at satellite NBA events such as its international games, All-Star Weekend, and Summer League, providing meet-and-greets, behind-the-scenes tours, and more.
“Our players are as dynamic off the court as they are powerful on,” says Graziano. “They’re entrepreneurs, they’re investors, they’re artists, they’re musicians, and we wanted to be able to showcase their holistic interests.”
This line of thinking culminated in the first NBA Con — a festival of NBA fandom held in Vegas last weekend alongside Summer League.
Like any other fan convention — think Comic-Con — the NBA’s version included exclusive giveaways, concerts from artists like 2Chainz, and panels with current and former NBA stars. Coming off his first Summer League game, Wembanyama sat down on the main stage with no less than NBA legend Kareem Abdul-Jabbar.
“It’s those kinds of exclusive collaborations, those can’t-miss moments, those one-of-one items that we think our fans are craving and that we believe, at the NBA, we’re uniquely positioned to deliver,” Graziano says.
He adds that the league plans to eventually hold multiple NBA Cons per year, both domestically and abroad.
More To Play For
Like any good convention, NBA Con 2023 used its platform to exclusively announce the league’s newest initiative — the In-Season Tournament.
An idea that has been brewing for years, the IST will inject some much-needed action into the first half of the NBA schedule and before the jockeying for playoff spots traditionally picks up around Christmas. It will also provide an opportunity for players to compete for more hardware — the newly annointed NBA Cup.
The league gained the confidence to go ahead with the new format after several years of experimenting in its affiliate leagues with the G-League’s Showcase Cup and the WNBA’s Commissioner’s Cup (a WNBA spokesperson told FOS that while its tournament wasn’t created as a test for IST, the NBA certainly benefited from studying it).
The IST will also provide another outlet to reach international fans and encourage them to travel to the U.S. for games.
“That’s the way they’ve grown up across other sports like soccer,” says Graziano, “so for a league that is as global as ours, we have to continue to build things that we know are going to make the global NBA fan find closer connection points.”
But perhaps most importantly for the league’s bottom line, IST provides more inventory for the NBA’s media product — which will be crucial as it enters landmark media rights negotiations next year.
FOS reported that while media plans for the inaugural tournament won’t be announced until August, the league will take an “everything on the table approach” to selling the rights for future seasons.
That includes folding it into a larger rights package or selling it on its own — the WNBA has already found success with the latter option in taking the Commissioner’s Cup Championship to streamer Amazon Prime Video.
What Happens In Vegas…
The one thing all of these events have in common is that they take place in Las Vegas — arguably the hottest locale in the sports world right now, and an increasingly important one for the league’s ambitions.
Like its experimentation with the in-season tournament format, the NBA has watched its sister league flourish in Sin City for years. The Las Vegas Aces are the reigning WNBA Champions, are enormous favorites (-290) to repeat, and hosted the WNBA All-Star Game at Michelob Ultra Arena on Saturday.
In time, such success could convince the NBA to bring its own team to the city.
“It’s not a sure thing, but as I’ve said before, I think it’s natural that organizations grow over time,” commissioner Adam Silver recently said at the Associated Press Sports Editors Convention. “We will look at [Las Vegas]. There’s no doubt there’s enormous interest in Seattle. That’s not a secret.” He added that the league isn’t considering expansion at the moment.
Whether the league ends up in Vegas or not, it’s clear that the NBA is chasing a piece of the cultural zeitgeist that perhaps only the NFL — which already has a presence in the city with the Raiders — has accomplished.
America’s most popular league is always lurking in the background of sports conversation, inciting a fervor among fans that entices media to give it extra coverage and fans to follow it year-round.
The NBA, then, may not be able to take attention away from The Shield — but that ultimately may not matter on a global scale.
“It’s a Darwinian sports world out there,” says Kosner. “I don’t think the NBA is going to challenge the viewership supremacy of the NFL in this country, but I do think that by the time you get to the NBA’s next media deal, it’s going to be pretty clear that the NBA is the most successful global professional sports league.”
The NBA believes it can get to that level — and feels its best way to achieve it is by sticking to its guns and making its products a constant presence for the fans.
“Traditions are going to take time to be able to build,” says Graziano. “What’s important is to continue to be very clear about why we’re doing this — and to remain authentic to our values.”
John Kosner Spoke with Mike McCarthy of Front Office Sports About The NBA’s New In-Season Tournament
Original Article: Front Office Sports, by Mike McCarthy, July 13th, 2023
The hotly-anticipated negotiations for NBA media rights became more intriguing with the introduction of the new In-Season Tournament.
Starting with the 2023-2024 season, the NBA will launch a new annual competition for all 30 clubs. The inaugural event tips off on Nov. 3 – and culminates with the Championship Game on Dec. 9 in Las Vegas.
According to sources, TV plans for the first IST won’t be announced until August. Similarly, broadcast plans for the second annual tournament won’t be revealed before the 2024-2025 season.
But the NBA confirmed media rights to the tournament would be up for grabs in upcoming rights negotiations with incumbent the Walt Disney Co.’s ABC/ESPN and Warner Bros. Discovery’s TNT.
“Future media rights for the NBA In-Season Tournament will be included in our next round of media rights negotiations,” said a league spokesperson.
Regarding upcoming rights talks, the NBA is taking an “everything on the table approach,” said sources.
That means the NBA could fold IST inside a bigger rights package. Or possibly sell it as a standalone package.
The NFL, for example, has mastered the dark art of creating lucrative new packages out of thin air.
Amazon Prime Video will pay an estimated $70 million to $100 million for the league’s first-ever “Black Friday” game. That’s on top of the tech giant’s $11 billion, 11-year deal to stream “Thursday Night Football” through 2033 exclusively.
“They have two partners right now on the national side. But who knows where it goes moving forward,” said sports media consultant Lee Berke. “They’re offering up more opportunities. The (IST’s) going to be one of them.”
But former ESPN executive turned consultant John Kosner thinks it is “highly unlikely” the NBA would split off IST as its own package.
“I think the league will make it into another tentpole – like All-Star Weekend and NBA Summer League – that will be used to enhance one of the new packages in the new deal,” Kosner said.
Front Office Sports previously reported the NBA is poised to sell a separate package of streaming-only games under the next deal. According to consultant Patrick Crakes, bidding would likely start at $1 billion a year.
The NBA’s billion-dollar rights talks will be the most talked-about sports negotiations next year.
The NBA’s expected to seek $50 billion to $75 billion for its next cycle of long-term media rights. That would more than double its current $24 billion deal that pays $2.6 billion annually.
During an exclusive negotiating period, ESPN and TNT will get the chance to defend their co-exclusive partnership with the NBA that stretches back decades.
But if they can’t close the deal during that window, Commissioner Adam Silver’s NBA can open negotiations with tech giants like Amazon Prime Video, Apple, and Google/YouTube.
That’s when the sports industry will get a read on the real future of sports rights as legacy media companies like Disney face off against streaming giants with trillion-dollar market values.
On the world stage, Amazon is looming as the biggest threat to Disney and WBD’s hoops hegemony.
In 2021, Amazon signed a multi-year deal with the WNBA to stream 16 regular season games and the Commissioner Cup Championship on Prime Video.
Last year, Amazon signed a multi-year streaming deal with the NBA in Brazil.
The IST is designed to pump up TV ratings during the slowest part of the NBA season.
But Kosner thinks the league might be better off shifting the tournament later to avoid competition with the NFL.
“I wonder whether or not the League will ultimately make it into more of a ‘mid-season’ rather than ‘early season’ event and play it after the NFL season,” he said.
John Kosner Spoke with Shwe Surendran from ESPN About the Significance of Apple’s MLS Deal with Messi
Original Article: ESPN, by Shwetha Surendran, July 11th, 2023
The moment seven-time Ballon d'Or winner Lionel Messi announced he would head to the U.S. to begin his MLS career, the "Messi effect" immediately took hold. Inter Miami CF's social media following exploded, ticket prices skyrocketed and upcoming fixtures sold out. And all before he even signed a contract.
Ahhh, the contract. As the league and club went to work on the specifics of Messi joining Inter Miami following the expiration of his PSG contract on June 30, questions emerged about how one goes about formulating a deal compensating for such influence. Would just offering money be enough to woo a player who ranked second in 2023 on Forbes' list of the world's highest-paid athletes at $130 million?
What else can you bring to the table? Miami and MLS' answer appears to be to bring league partners into the mix.
The deal, unique in its structure, raises interesting questions about revenue splits for superstar athletes and the cascading impact on media rights negotiations.
According to Sportico, Messi's 2½-year deal with Inter Miami is "worth up to $150 million total from his salary, signing bonus, and equity in the team." Sources confirmed to ESPN's Jeff Carlisle that the option for part-ownership of Inter Miami will not be subsidized as it was in 2007 for David Beckham, who could purchase an MLS team for a discounted price of $25 million.
But that's not all. In addition, revenue-sharing agreements with Adidas, Apple and others were being negotiated. Here are some key questions and answers about Messi's "unprecedented" MLS deal and what it means for everyone else.
Why are we talking about Messi's Inter Miami contract?
Contract talk is usually boring talk unless you have a 36-year-old Argentine soccer legend attached to it. And this one does.
While the multimillion-dollar salary side of the contract is stale news in modern soccer, the revenue-sharing agreements with league partners offer something new. One industry expert called the Apple part of the deal "unprecedented." Another termed it "unusual."
"That deal has never been given to anybody in baseball, basketball, football, and so it's very unique," said Irwin Kishner, co-chair of the Sports Law Group. "It's a generational-type thing, and it's hard to think if you would ever see anything comparable."
ESPN confirmed that part of the ongoing discussion is a cut of revenue from new subscribers to Apple TV's MLS Season Pass streaming service. The subscription service on Apple TV+ was launched earlier this year when Apple and MLS kicked off their $2.5 billion decade-long media rights partnership.
"I do think in a significant way that what the [Messi] deal's about is customer acquisition," said John Kosner, president of Kosner Media, a digital media and sports consultancy. "Customer acquisition is perhaps the biggest issue in sports and sports media these days."
Apple currently holds exclusive, worldwide rights for every MLS game, and the season pass also features both an English and Spanish broadcast crew. "This [Messi's arrival] is the sort of thing that will get them noticed and expand their international reach," said Ed Desser, president of Desser Media Inc. "That is the kind of thing that's particularly interesting for a global company like Apple."
A similar profit split -- reminiscent of the Nike-Michael Jordan deal over Air Jordan -- is said to be in discussion with Adidas, the official supplier of the league and a longtime sponsor of the player himself. What cut of those increases, if any, Messi gets is yet unknown. Any agreement between Messi and Adidas would strictly be between the player and the company and wouldn't directly involve MLS, ESPN confirmed in earlier reports.
Ernesto Bruce, CEO of For Soccer and former senior director of soccer for Adidas, likened this deal to an "evolution" of what Beckham's contract was when he signed with the LA Galaxy in 2007. "David Beckham was a big catalyst when he came over," he said. "He had a deal with Major League Soccer, he had a deal with LA Galaxy, and he also happened to have a partnership with Adidas while I was there. That was a revolutionary moment because part of that deal had a future ownership stake in an undisclosed MLS team."
That MLS team wound up being Inter Miami, where Beckham is co-owner alongside brothers Jorge and Jose Mas. Now, Bruce compares Messi's contract and presence in MLS to an "accelerator."
What does this deal mean for other star athletes' contracts in the future?
MLS, a fairly young and innovative league, and Messi, one of the sporting greats, are uniquely positioned assets in their own way as parties to a deal of this scope. At the upper echelons of sporting legend, only a few command the same influence as the man from Rosario.
In the NBA, one could argue, what about Steph Curry? LeBron James? Would Messi's potential revenue-sharing agreement inspire something similar for them?
"That is really going to set some alarm bells off," a former NBA agent said. "For the right players and the right player agents, if they have individuals who can really move the needles -- so the Giannis Antetokounmpos of the world, the Nikola Jokics of the world, the Joel Embiids of the world, they are going to look at this in the next collective bargaining and say, 'Listen, players control the league,'" he said.
But even with the NBA stars' power, it might not be enough to match Lionel Andrés Messi Cuccitini. "I don't think they have that level of power like Messi," Kishner said. "There is global reach, but not nearly what a Messi has."
Much like on the pitch, Messi is in a league of his own at the negotiating table, his influence matched by only an ultra-elite few. The Argentine boasts Instagram's third-highest following -- 478 million -- behind only the social network itself and fellow soccer star Cristiano Ronaldo, who has 596 million followers.
However, there might be other ways to creatively approach such negotiations. "What I've learned in all my years in licensing, there is a thing called 'slicensing' -- because you can slice the pie up," said Cara Lustik, a branding and licensing expert.
Lustik explained that while not every athlete can match Messi's scope of influence in securing revenue-sharing agreements, slicing the subscription model into smaller segments in specific regions could favor other athletes. "There are so many leagues that could use extra eyeballs, and to do that, the easiest way is to take advantage of the talent who has them, and everybody wins," she said.
Another league that might take notice? The NWSL, Bruce said. "The U.S. leads soccer in the women's game," he said. "And so how does NWSL adapt to this?"
What about Apple, MLS and a sign of the future of live sports programming?
The streaming giants want a bite of live sports programming and in recent years, they've chomped down. Amazon's Prime Video has NFL's "Thursday Night Football." Apple TV+ is in a partnership with Major League Baseball to stream games. Google's YouTube TV is now home to NFL Sunday Ticket, and you can add MLS' Apple TV+ deal to the growing list.
Research by Park Associates, a market research and consulting company, showed that "annual sports OTT subscription revenue in the United States was $13.1 billion in 2022 and will almost double to approximately $22.6 billion in 2027."
Eric Sorensen, a senior contributing analyst at Park Associates, attributed this shift to the pandemic and the need for a more immersive experience for the sports fan. "Sports online, on streaming services, are much more engaging from interactive feature sets, from the chance and the ability to potentially place bets and wagers, the stats and data and integration that's coming into the screen," he said.
But it's not all doom and gloom for traditional broadcasters. Kosner, a former ESPN executive vice president, emphasized that technology companies are not media companies first. "I think we're going to see a bifurcation of different rights really based upon the interests and priorities of these bidders, including traditional companies and also just the viewing habits of sports fans," he said.
The choices available and competition for live sports programming perfectly set the stage just as the NBA's $2.66 billion-a-year deal with Disney and Warner Bros. Discovery expires after the 2024-25 season.
"I don't think that the NBA could have planned it much better," said Desser, who was the former chief negotiator for all the NBA and WNBA national media agreements. "The combination of various parties trying things out for the first time and seeing what could happen will accrue to the NBA's benefit."
Who are the real winners in this deal?
Umm, so far ... everyone?
Messi, Inter Miami, MLS and all their league partners emerge looking great. And while the Saudi Pro League might have missed a chance to sign one of the greats, the footballer still has a $25 million public partnership with the country, according to a New York Times report. The only ones who miss out are the Barcelona faithful, whose hope for a Messi return might have to wait a few more years.
And while the terms of his overall deals remain under wraps, one thing is certain: Messi at 36 is still Messi nevertheless.
You need only to look at a recent clip from Argentina and Australia's recent international friendly. It's the 33rd minute of the game, and Messi -- unflinching, unbothered, with the ball glued to that left foot -- glides between four defenders like a player in his prime. And soon, that talent will be on full display in the U.S., when he is expected to make his club debut July 21 against Cruz Azul in the Leagues Cup.
As Inter Miami co-owner Jorge Mas told the Miami Herald, "I think there will always be a before and after Messi when we talk about the sport in the United States."
John Kosner Delivered the Keynote at the SVG Regional Sports Production Summit in Chicago
Original Article: Sports Video Group, June 29th, 2023
The regional-sports-network side of the business is at a crossroads, and the unclear future of this sector was on everyone’s mind at the 2023 SVG Regional Sports Production Summit (RSPS). Taking place at the Renaissance Chicago Downtown Hotel on June 28-29, more than 250 attendees addressed the pertinent issues and seismic changes as well as covered the latest developments in live-production workflows, DTC streaming, sports betting, 4K and HDR technology, labor and crewing, league and team relationships, and more.
The day was kicked off with an opening presentation that dove deep into the uncertainty of the rapidly changing RSN marketplace. Kosner Media President John Kosner, who previously managed ESPN’s streaming operations and helped guide the NBA’s TV strategy and media operations, offered up advice on how teams, RSNs, and other media organizations can weather the looming storm.
“We’re all here because we appreciate the value of sports, and there’s still room for growth on this side of the business,” says Kosner. “I have no doubt that local sports will continue to thrive and that the individuals in this room will be in high demand.”
John Kosner Spoke with Mark Burns of Morning Consult About the Significance of YouTube’s NFL Sunday Ticket Deal
Original Article: Morning Consult, by Mark J Burns, June 22nd, 2023
Google’s YouTube easily boasts one of the largest user bases of any video-sharing platform in the world, but the collective sports business has only recognized its potential in the last few years.
“The significance of YouTube is not quite understood yet, but it’s going to be,” said John Kosner, president of sports media consulting firm Kosner Media and a 20-year ESPN veteran. “You’re moving to the internet as a platform. In the center of that is video with YouTube.”
Sports stakeholders previously prioritized other channels, like Facebook, Instagram and Twitter. For example, MLB only granted teams’ access to their individual YouTube accounts in 2019, meaning the platform has historically been underutilized across sports. But that has been changing: In 2017, YouTube TV launched, and combined with the rise of video consumption, adoption of connected TVs, the platform’s user base and discoverability capabilities, YouTube now has a more permanent place in sports executives’ strategies.
Today, YouTube is the equivalent of TV, and it’s wading further into sports fans’ conscience. The NFL’s new media rights deal with YouTube for “Sunday Ticket,” reportedly worth around $14 billion over seven years, has only increased the platform’s importance.
Beyond live sports rights, YouTube has become a versatile medium to distribute sports highlights, all-access footage, personality-driven videos, short-form content, episodic programming and podcasts.
Jen Millet, chief marketing officer for the Golden State Warriors, told Morning Consult that YouTube remains “player and game highlights driven at its core.”
“There’s a real drive to see more than just one great dunk or pass,” Millet said. “It’s more like, ‘I want a highlights recap. I don’t want to sit through ‘SportsCenter’ and wait for my team’s two-minute highlight of the game.’”
With the sports industry already struggling with Gen Z, it would be prudent for stakeholders to develop a strategy to meet the next generation of fans where they’re spending a large amount of their time: YouTube.
YouTube has the golden (Sunday) ticket
A new Morning Consult survey found more than 2 in 5 self-identified sports fans (42%) said they watched livestreams of games or replay videos of games on YouTube in the past month, making it the most popular video destination, followed by Facebook (28%) and Twitch (8%).
Gen Z adults, millennials, Gen Xers and baby boomers all said they incorporate YouTube more into their monthly content diet than other platforms, per the survey. Nielsen data also shows that the video-sharing service is the No. 1 streaming platform by share of time spent viewing.
All of this confirms why the NFL would partner with YouTube for “Sunday Ticket.” The relationship started with highlights and clips before expanding to game previews and recaps — a popular use of YouTube among several major U.S. pro sports leagues — in addition to original programming and interview-style comedic sketches. The NFL joined other major U.S. leagues and teams, such as MLB and LAFC and the Seattle Sounders, MLS clubs that previously signed media rights agreements with YouTube.
Jon Cruz, YouTube’s head of global sports partnerships, told Morning Consult that “successful execution of ‘Sunday Ticket’” and getting the “requisite number of subscribers” are the main areas of focus for live rights at YouTube.
“YouTube TV sports viewership, sports viewing on that platform, is a top priority,” Cruz said.
Blake Stuchin, the NFL’s vice president of digital media business development, said the league’s fans increasingly spend their time on YouTube, not only in the United States but also in Germany, Canada, Mexico, the United Kingdom and Brazil.
“‘Sunday Ticket’ has always been a premium product and it appeals to particularly an avid fan,” Stuchin said, “but in the last several years, it hasn’t been as widely available as we’d like it to be. The availability of ‘Sunday Ticket’ being on YouTube PrimeTime Channels and YouTube TV will make it that much more accessible to our fans than it historically has been on satellite.”
“Nearly half of all YouTube viewership now takes place on TVs, which is remarkable,” he said. “That's where our long-form programming, with everything from 15-minute game recaps to original shows on YouTube, becomes another great avenue for discovery. The best example of that will be having full games starting the season.”
Through the “Sunday Ticket” deal, the NFL can leverage top YouTube creators, like MrBeast, and provide them content opportunities around exclusive access to league tentpole events and games. The NFL and YouTube are launching a “NFL Creator of the Week” initiative, according to Stuchin, where popular YouTubers in fashion, fitness, music and gaming will introduce their audiences to football.
“The creator program is perhaps the biggest aspect of this deal that really matters that people aren’t focusing on quite yet,” Kosner said.
Sports highlights a slam dunk on YouTube
Game highlights are the most important type of content that YouTube provides fans. More than half of sports fans (56%) said they use social media either “often” or “sometimes” to stay updated on game highlights, followed by 52% who said the same for game day content and 51% who said the same for team-related news.
Drew Muller, vice president and general manager of House of Highlights, said the brand’s YouTube channel, which has about 9.5 million subscribers, has become a “go-to destination” for NBA fans over the past five years. The NBA, meanwhile, told Morning Consult that its highest-performing YouTube content is its 10-minute game recaps.
The Baltimore Ravens said one of their most-watched YouTube videos this year is a career highlights compilation of new signee Odell Beckham Jr. Other popular Ravens videos have included a six-minute compilation of players picking a Maryland crab, which has received over 415,000 views, and a clip of defensive legends Ed Reed and Ray Lewis teaching high school students how to study game film, which has garnered 1.3 million views.
“YouTube is the engine for our business,” said Chad Coleman, chief brand officer for Dude Perfect, a youth-centric content creation brand with nearly 60 million YouTube subscribers.
Coleman said it’s a balancing act catering to Dude Perfect’s 5 million “really hardcore, devoted fans who will consume everything” and the rest of its subscribers.
“The diversification of content on YouTube has been instrumental in helping our longevity and not just being a flash in the pan,” he said of the 14-year-old brand. “It’s hard to find lightning in a bottle and usually that starts with a certain niche. For us, it was trick shots.”
Dude Perfect, which still produces its trick-shot and stunt-like videos, broadened its usage of YouTube, producing a longer-form variety show, hosting an alternative broadcast during “Thursday Night Football” on Amazon.com Inc.’s Prime Video and exploring mini-documentaries. In May, the group shared a 17-minute video where it broke the world record for the highest basketball shot — it has generated more than 6 million views.
The Los Angeles Chargers have found success by providing fans an inside look at a new signee's first 24 hours in the city, said Jason Lavine, the organization’s vice president of content and production. This behind-the-scenes content has longevity and provides teams with captive audiences that are actively searching for that content, executives said. YouTube is one of the few platforms — digital or linear — where social media strategists and marketers can create long-form evergreen storytelling, which isn’t available on other video platforms. Personality-driven programming that also incorporates trending cultural moments is a way for creatives to reach a broader sports audience.
Specific demographics at scale: Surveying thousands of consumers around the world every day powers our ability to examine and analyze perceptions and habits of more specific demographics at scale, like those featured here.
Why it matters: Leaders need a better understanding of their audiences when making key decisions. Our comprehensive approach to understanding audience profiles complements the “who” of demographics and the “what” of behavioral data with critical insights and analysis on the “why.”
Launched in 2021, YouTube Shorts, a vertical short-form video feature, has added to the platform’s range of offerings for sports stakeholders. One surprising benefit is its ability to bring in new audiences. Millet pointed to Shorts’ ability to reach a new Warriors audience: 80% of total YouTube views are male users, but Shorts views skew 78% female.
Lavine said the Chargers’ subscriber growth has “skyrocketed” with the help of Shorts, which the team started to consistently prioritize in December. The short vertical format allows the Chargers to “get reach and get to peoples’ phones quicker than a long-form video,” he said.
The Chargers’ two most popular Shorts feature a young fan, dubbed King Aidan, who initially gained notoriety after ripping his shirt off during a home game on Nov. 27. Both videos have collectively driven over 18 million views and at least 14,000 new subscribers to date.
“If you’re a Charger fan and you want to find any video of a press conference, media availability, a highlight or a feature, you're finding it on YouTube all in one place,” Lavine said. “It’s on a little playlist for you.”
Global fandom and revenue opportunities through YouTube
Aside from its versatility, YouTube offers teams and leagues a major opportunity to reach an untapped global audience ready to consume more football and basketball-related programming.
Stuchin teased a new original YouTube show, which “will target an international audience,” as well as plans to engage top YouTubers outside the United States to “expose their audiences to NFL and football,” starting with the upcoming season.
In May, the NFL’s Atlanta Falcons secured international marketing rights to Germany as part of the league’s global markets program due, in part, to noticeable consumption patterns overseas. Across the Falcons’ website, mobile app and YouTube, Germany ranked No. 2 or No. 3 “in terms of audience size and traffic from outside the United States,” said Scott Kegley, vice president of digital strategy for AMB Sports and Entertainment, parent organization of the Falcons. He estimated that 15% of the Falcons’ YouTube audience is international.
Meanwhile, about 70% of the NBA’s YouTube traffic is from outside the United States, with the top international markets including the Philippines, Canada, Brazil and India, according to Bob Carney, the league’s senior vice president of social and digital content. He added that the NBA is deep into an exploratory and testing phase about how artificial intelligence tools can help reach different audiences. For example, the NBA could take a game recap for YouTube and, through artificial intelligence, automatically produce a new script, translate it into 10 different languages and generate a new narration for those languages “to truly localize that for our global audience,” he said.
For the NBA’s Warriors, more than half of their YouTube video views came from outside the United States over the past two seasons. Millet said the team is strategizing ahead of the upcoming campaign about how to maintain the U.S. appeal for its YouTube channel while also reaching a global audience.
“If you’re an out-of-market or out-of-country fan, YouTube is one of the only places where you can watch longer-form content and get more Warriors access,” said Millet, adding that the NBA franchise, like some other sports teams interviewed, are discussing leveraging popular international YouTubers in the future.
The revenue potential on YouTube shouldn’t be ignored either. Millet estimated 70% revenue growth year over year on YouTube, which is the Warriors’ and Chargers’ biggest source of revenue compared with other social media and video platforms, executives said. The Falcons’ saw a 467% spike in year-over-year revenue growth from 2021 to 2022, according to Kegley.
John Kosner Spoke with Mike McCarthy of Front Office Sports About Colleges Recruiting Sports Media Executives
Original Article: Front Office Sports, by Mike McCarthy, June 9th, 2023
The joke inside NBC Sports was if chairman Pete Bevacqua was ever offered the athletic director job at his alma mater Notre Dame, he’d take it in a heartbeat.
That’s precisely what happened on Thursday as Bevaqua accepted an offer to succeed Jack Swarbrick as Notre Dame’s director of athletics next year.
The move was not a surprise. Bevacqua is just the latest top sports TV executive to migrate to the college ranks.
Big Ten Commissioner Tony Petitti and American Athletic Conference Commissioner Mike Aresco are both former CBS Sports executives.
Former ESPN executive John Wildhack got the ball rolling back in 2016 by shifting from the Worldwide Leader in Sports to Syracuse University as director of athletics.
Several factors are driving the TV-to-college trend. Media rights revenue is the biggest factor.
Like professional sports leagues, the power conferences and power schools now recognize media rights fees as their “lifeblood,” according to Andrew Brandt, the former Green Bay Packer executive turned executive director of Villanova University’s Moorad Center.
“We are long past the days of college athletic directors as administrators who schedule games and handle ticket sales. The job is much more complicated and requires strategizing around fundraising, player rights, legal changes, and – perhaps most importantly – media,” said Brandt, who also writes the “Sunday Seven” newsletter.
“As with professional sports, media revenue is the lifeblood of big-time college sports. These hires reflect that, leveraging the person’s relationships and knowledge that will be vital for future revenues in both traditional media, digital, social and more.”
All you have to do is follow the money, noted John Kosner, the former ESPN executive turned founder of the Kosner Media consultancy.
He traces the Bevacqua and Petitti hires directly to the SEC Conference’s $3 billion, 10-year deal with ESPN/ABC and the Big Ten Conference’s $7 billion, seven-year rights deals with Fox Sports, NBC Sports, and CBS Sports.
“Everyone else is on notice – and playing catch up,” Kosner said.
T.K.Gore, the longtime advisor turned head of sport business development for Kiswe, agreed.
The No. 1 priority these days for colleges and conferences is “media mindshare” regarding rights, distribution, and audience growth.
“There is a need and skill set for people who possess a good track record and experience in negotiating rights deals, understanding the complex linear TV and DTC streaming ecosystem and content creation, value and selling,” said Gore. “For the conference commissioners, they are selling as well as recruiting. They are recruiting schools for new content to add value to their growing conference content empires.”
Big moves like this also come down to the personal passions of executives.
Mark Lazarus, chairman of NBCUniversal Television and Streaming, noted in a staff memo that Notre Dame was Bevacqua’s “dream job.”
It’s no coincidence that both Bevacqua and Wildhack returned to lead the athletic programs for their respective alma maters: the Notre Dame Fighting Irish and the Syracuse Orange. College loyalties run deep.
But these former sports media executives won’t have an easy transition, Kosner warned.
Besides mega media rights deals – which are often locked in for five to 10 years – new athletic directors and commissioners must quickly come up to speed on NIL and athlete compensation issues.
“That’s an education unto itself,” Kosner said.
LeslieAnne Wade, the former senior vice president at CBS Sports turned founder of White Tee Partners, has worked with Bevacqua, Petitti, and Aresco.
All three have negotiated major TV deals in the past, she said. All three are attorneys so that they will be well-versed to handle the NIL challenge.
“College sports – at the highest level – are increasingly media and marketing businesses. These leaders are proven in this space,” Wade said.
John Kosner Spoke with Tom Kludt of Vanity Fair About the Significance of the NFL’s Licensing Peacock An Exclusive 2024 Wild Card Playoff Game
Original Article: Vanity Fair, by Tom Kludt, May 23rd, 2023
Football still dominates traditional TV ratings, but the league’s deals with YouTube, Peacock, and Amazon—all while ESPN considers offering streaming access to its flagship channel—signal that the future of live sports is increasingly outside the cable bundle.
NFL commissioner Roger Goodell stood on stage at Lincoln Center last week to trumpet the dawn of the league’s streaming age. The NFL’s partnership with YouTube TV, which will carry the league’s prized Sunday Ticket package starting this season, “is only the beginning,” Goodell said. “The fact is,” Goodell told advertisers gathered at YouTube’s upfront, “millions of football fans are on YouTube to catch all things NFL.”
Basketball fans, on the other hand, were outraged later that night when YouTube TV experienced apparent technical issues that caused viewers to miss the final stretch of Game 1 of the NBA Eastern Conference Finals between the Miami Heat and Boston Celtics. With about four minutes remaining, the game went to commercial and “the stream just lost it,” according to Sports Illustrated’s Andy Nesbitt. “Many fans saw the same ad starting and stopping for what felt like an endless amount of time, and it never came back for the rest of the game,” Nesbitt wrote.
The outage invited visions of a doomsday scenario for Sundays this fall. Warren Sharp, who covers the NFL for Fox Sports, said the league is courting a “disaster” with Sunday Ticket’s move to YouTube TV. The NFL had no formal comment on the mishap, although a spokesman said that the league is in “constant contact” with YouTube and is “confident in their technology capabilities.”
The NFL also appears confident about where live sports are heading. Its deal with YouTube, which is owned by Google parent Alphabet, is just one part of the league’s ever-widening streaming portfolio—and another example of Big Tech’s increased footprint in live sports. After hammering out a seven-year deal in December, YouTube TV will pay the NFL roughly $2 billion annually for the Sunday Ticket package of out-of-market games that DirecTV controlled for nearly three decades. This move follows the NFL kicking off an 11-year partnership with Amazon, which is reportedly paying around $1 billion annually to be the home of Thursday Night Football. And a few days before Goodell’s appearance at the YouTube upfront, the league announced that Peacock, NBC’s streaming service, will have exclusive rights to a prime-time playoff game in January. Hans Schroeder, executive vice president and chief operating officer of NFL Media, said the playoff game on Peacock “will be transformative for sports on digital.”
In moving a prime-time playoff game away from linear television, where it would surely garner big ratings, the NFL is beginning to “habituate its audience to watching big games on streaming,” said John Kosner, a former digital media executive at ESPN who now heads a media and sports consultancy. “The NFL has long been the king of broadcast television and has long prioritized reach,” said Kosner. “Now they’re trying to train their audience to understand that they can find the product on streaming.”
The NFL’s Peacock announcement was one of a pair of industry-rattling developments last week that brought the future of live sports into focus. The Wall Street Journal later reported that ESPN, which has built an empire on its lucrative agreements with cable providers, is preparing to launch a new streaming service that will offer full access to the flagship channel. In the span of a few days, the NFL and ESPN, two paragons of traditional TV, signaled that the streaming era is no longer buffering.
The NFL and ESPN have each enjoyed practically unrivaled dominance over the linear television landscape. Eighty-two of the 100 most watched broadcasts in the United States last year were NFL games, which was up from 75 in 2021, and 71 the year before that. ESPN, meanwhile, receives more than $9 per average customer in fees from providers, far more than any other cable channel. But the growing number of viewers who have spurned traditional cable packages in favor of streaming platforms has forced a recalibration, even for juggernauts like the NFL and ESPN.
The digital marketing agency Adtaxi found that over 30% of viewers intended to watch the Super Bowl this year via streaming, eclipsing cable (29%) and broadcast (26%) for the first time in the survey’s history. Comcast, the parent company of NBCUniversal, reported last month that it lost 614,000 cable TV subscribers in the first quarter this year, while subscriptions to Peacock climbed to 22 million. In its report last week, The Wall Street Journal suggested that ESPN’s new streaming service could augur “cable TV’s demise,” but it did not provide a timetable for its launch. Subsequent reporting by Andrew Marchand of the New York Post indicates that the release will come in either 2025 or 2026. The traditional pay TV model might not go kaput overnight, but it is flickering.
In the immediate term, the live sports experience will continue to be a chimerical enterprise of direct-to-consumer and linear viewing options. “We’re getting into this bifurcated world where we still have people on pay television, although that number is shrinking,” Kosner said. “Meanwhile, streaming is ascendant and sports has begun to take its place there.”
As the number of pay TV customers has dwindled in the last decade, the NFL and ESPN have been preparing for a streaming-centric future. The NFL first streamed one of its games in 2015, when it partnered with Yahoo. Its deal with Amazon, which runs through 2033, was “the moment the industry crossed the Rubicon,” Kosner said.
ESPN already has an existing streaming service, ESPN+, which launched in 2018 and has grown to 25 million subscribers. But that service doesn’t offer the full suite of ESPN programming, and in recent months, executives at both the network and its parent company, Disney, have telegraphed a direct-to-consumer streaming option that would include everything from its linear channels. ESPN chairman Jimmy Pitaro told Bloomberg that the release of such a service was a “a ‘when,’ not an ‘if.’” In an earnings call with investors earlier this month, Disney CEO Bob Iger called it an “inevitability.”
But Iger also stressed that it was a “huge decision,” and that the company has enormous pressure to “get it right, both in terms of pricing and timing.” That captures the tension over this tweener era of television, with Hollywood studios, cable giants, and popular sports leagues all straddling the status quo and an increasingly present future. An industry-wide migration to streaming might be inevitable, but the same level of prosperity and reach is not. Media companies have long paid big sums to acquire the rights to live sports, while cable providers have forked over large fees to carry channels like ESPN. In an era when customers only want to pay for the stuff they watch, ESPN’s new streaming service will almost certainly have fewer customers than the number of households that receive the channel as part of a traditional cable bundle. And while the NFL will likely continue to fetch a big price tag for its rights deals, other sports leagues could be squeezed out in a market with fewer bidders.
Then there is the impact it will have on sports fans, who just want to watch their games free of disruption. YouTube was apologetic for last week’s outage during the Heat-Celtics game, and pledged to offer “the best TV streaming experience” going forward. But latency issues are a maddening hallmark of any live sports stream. Peacock users, for example, have previously reported technical glitches during streams of Premier League soccer matches on the platform. All of that has NFL fans sweating ahead of the upcoming season. In its new partnership with YouTube, the league “could be flirting with a new-age Heidi situation,” wrote NFL commentator Mike Florio, referring to the infamous 1968 Raiders-Jets broadcast that ended prematurely in order for NBC to air its made-for-TV movie.
“The traditional pay television experience is terrific for sports,” Kosner said, “and unfortunately, I think we sort of take it for granted.”
“Crossing the Sports Media Rubicon II” - John Kosner’s Latest SBJ Column with Ed Desser
Original Article: Sports Business Journal, by John Kosner and Ed Desser, May 22nd, 2023
In December, we wrote how Amazon’s exclusive NFL launch signified the sports media business’ “crossing the Rubicon” moment (SBJ, Dec. 5, 2022) — a symbolic point of no return for the industry. That column generated many thoughtful responses. In today’s second installment, we share six early post-Rubicon trends we’re seeing:
1. Women’s Sports Events are Booming. Fifty years ago, the NCAA moved the men’s basketball championship to its current Saturday/Monday prime-time schedule; Bill Walton led UCLA to its seventh consecutive national championship on remarkable 21-of-22 shooting. The Final Four phenomenon was born. This year, Iowa’s Caitlin Clark and LSU’s Angel Reese electrified the nation in the semis (generating historic audiences) and then the women’s championship game drew 9.9 million viewers on Sunday afternoon. Expect to see additional prime-time, regular-season women’s games. The market is hot for women’s events (like the FIFA Women’s World Cup in July with 29 Fox broadcast windows, five in prime time). It will take a bit longer for the pro leagues, although Clark, Reese and Paige Bueckers augur well for the WNBA.
2. YouTube TV’s NFL Sunday Ticket. After almost 30 years, Sunday Ticket is moving from traditional MVPD to virtual MVPD YouTube TV and its streaming platform. No longer will ST subscribers have to be linear subs (watch DirecTV’s 2023 numbers!), as YouTubeTV will also sell ST à la carte (easily paired with an off-air antenna providing most NFL games). YouTube’s moves increase the pool of potential Sunday Ticket subs by millions, to anyone with broadband. Now all three tech majors have an exclusive, significant, formerly linear, sports property. The addition of NFL IP will also bolster Google’s Creator program, a new rights grant that matters. Indeed, it’s now all about the …
3. Data. YouTube’s opportunity to grow is not just theoretical: Google knows our search history, what we watch on YouTube and other information from our Gmail (really!). As Apple sells MLS Season Pass, it knows the apps we download, the in-app purchases we make, the gear we use, and our credit card. Then there’s Amazon’s first: targeted ads in NFL telecasts. Per former IAB CEO Randy Rothenberg: “Amazon owns all three legs of the [sales] attribution stool: (1) transactions at scale, (2) product search function at scale, and (3) scaling media distribution (120 million+ Amazon Prime Video viewers) … [making it a] self-contained attribution machine that no one else currently can match.” Essentially, Amazon can correlate its actual sales with advertising on its “TNF” games, and potentially any ad-supported video it offers, including Twitch. Are rights holders properly valuing their content when they cede ownership of this data?
- Amazon is propped up by “three legs” of the sales stool: transactions at scale, product search function and media distribution.
GETTY IMAGES
4. The CW Network. The CW Network “weblet” recently signed on to carry LIV Golf. Thirty-five years after the launch of the NFL on Fox comes a new over-the-air player in live weekend sports TV. Regardless of how well The CW and LIV do together, there is now potentially another several hundred hours of weekend afternoon shelf space available for live sports content. Don’t expect The CW to pay out rich rights fees, or compete directly with the iconic legacy linear networks for top programming. However, we do see The CW as an emerging new target for those sports properties that are willing to pay for national broadcast reach. And now the Scripps stations have jumped in with the Vegas Golden Knights and WNBA deals (see “1” above) and Gray TV (subject to legal challenge) with the Phoenix Suns/Mercury (Nexstar/Clippers started the trend). Indeed, sports is now linear TV, with most entertainment programming on traditional channels continuing in long-term secular decline.
5. Balancing Revenue vs. Exposure. Rights owners always desire two things: maximum exposure and revenue. Increasingly they may have to choose. The NFL just licensed Peacock (owned by a cable operator that lost 614,000 Q1 subs) exclusive rights to a playoff game, sure to drive signups. MLS traded wider visibility on ESPN and the RSNs for much bigger money with Apple and Fox. To be fair, the Apple deal has also simplified discovery of MLS’s schedule (most games on Saturdays and select Wednesdays), eliminated blackouts and established high quality pre-/post- and shoulder programming. Meanwhile, the Phoenix Suns/Mercury are attempting to embrace reach, provided their local TV deals supplemented by a DTC offering from Kiswe are allowed to proceed.
6. Regional Sports Networks. In our last column (SBJ, March 20, 2023), we addressed the challenged RSN business model. Diamond Sports is in bankruptcy, the AT&T SportsNets are handing back the keys to their team partners and Comcast/NBC has already divested its D.C. network to team ownership. Subject to legal challenge, the Suns may be abandoning their RSN altogether. Once local exposure and revenue powerhouses, the RSNs have been devastated by purchase debt, cord cutting, audience declines, reluctance by MVPDs to pay ever-higher carriage fees coupled with high penetration requirements (and, in the case of some virtual MVPDs, refusal to carry at all). Yet RSNs remain identifiable addresses for large numbers of local fans. Pro sports media arbitrage — getting a much higher yield per inner-market subscriber is now at risk. The new model? Less one-size-fits-all. Likely, more lower-yield distribution on a national basis combined with new streaming plus traditional local options. Are salary cap adjustments and further (or lesser) big vs. small market disparities in pro sports upcoming? Stay tuned.
As we’ve crossed the Rubicon, change is everywhere in sports media, and all participants will need to be especially mindful in this new world order. Next installment as events dictate (probably soon).
Ed Desser is an expert witness and president of Desser Sports Media Inc. (www.desser.tv). He has negotiated dozens of current RSN agreements. John Kosner is president of consultancy Kosner Media (www.kosnermedia.com) and managed ESPN’s streaming operations for over a decade. Together they developed league TV strategy and ran the NBA’s media operations in the ’80s and ’90s.
John Kosner Spoke with Rachel Bachman of The Wall Street Journal About the Rising Media Rights Value of the NCAA Women’s Basketball Championship
Original Article: The Wall Street Journal, by Rachel Bachman, April 24th, 2023
When WNBA commissioner Cathy Engelbert was at the Masters recently, an unusual topic of conversation bubbled among golfers and fans: women’s college basketball.
The LSU-Iowa NCAA women’s title game had just drawn a record-shattering 9.9 million TV viewers, twice the total from a year earlier. In the years to come, the stars of that game, like LSU’s Angel Reese and Iowa’s Caitlin Clark, will be eligible to play in the WNBA—just when the league expects to have a new media rights deal in place.
Over the next few years, four major women’s sports rights packages will be up for new rights deals: not just the WNBA, but also the NCAA’s women’s college basketball tournament, FIFA’s Women’s World Cup and the National Women’s Soccer League.
The task for Engelbert and other stewards of these assets is to leverage the current excitement around women’s sports into much richer media deals than they currently have. Until now, the cost of rights packages for many women’s sports has remained low, and in some cases—such as the NCAA tournament and the Women’s World Cup—the rights holders have simply bundled them into packages with other assets, virtually giving them away.
Positive attendance and ratings developments for all of the properties have created hope that the commercial value of these events, long viewed with skepticism, can be substantially boosted.
FIFA now estimates that rights to the 2023 Women’s World Cup are worth $300 million, according to a person familiar with the matter. That’s partly attributable to simply assigning the tournament a portion of the revenue from the deals in which it is bundled with the men’s World Cup. A spokesperson said FIFA doesn’t provide public estimates for potential rights deals.
“I think we’re at a Rubicon moment,” said Ed Desser, a former NBA media executive who has done extensive consulting work on the value of media rights.
Such moments of optimism have dissipated in the past after major moments in women’s sports, such as the U.S. women’s soccer team’s iconic victory in the 1999 World Cup. Nearly a quarter-century later, FIFA president Gianni Infantino has publicly complained that some broadcasters are lowballing their offers for the 2023 tournament, which begins in about three months.
Here is a look at the developing landscape for women’s sports rights.
NCAA women’s basketball tournament
Desser and John Kosner, a consultant and former ESPN executive, compiled an 88-page analysis of the women’s basketball tournament’s sponsorship and media-rights value commissioned by the NCAA in 2021 following the public airing of inequities between the men’s and women’s tournaments. The women’s tournament is now bundled with 28 other NCAA sports championships and sold to ESPN for about $34 million a year.
The consultants’ conclusion that the women’s basketball tournament by itself could be worth $81 million to $112 million under a new deal starting in 2025 elicited scoffs at the time, they said. But with this year’s NCAA women’s final viewership approaching the NCAA men’s final audience of 14.7 million, that range doesn’t seem so crazy.
The women’s basketball tournament is “the most important property that ESPN has, the biggest one that it has, in March,” Kosner said. “And in a subscription world, months matter.”
Yet the NCAA still hasn’t decided for certain whether it will sell the women’s tournament as a separate entity. New NCAA president Charlie Baker said the association plans to test the market to measure the appetite for a stand-alone contract as part of a broad review of all NCAA business.
Rosalyn Durant, ESPN executive vice president, programming & acquisitions, said the network is proud to have helped build the WNBA and NCAA women’s tournament “through the unparalleled megaphone that ESPN offers across our linear, digital, streaming and social platforms.” She added: “We hope to continue to play a significant role in ensuring the upward trajectory of the sport for many years to come.”
Women’s World Cup
The value of Women’s World Cup rights has historically been invisible because they were packaged and sold with the rights to the men’s World Cup. The 1.12 billion global audience for the 2019 Women’s World Cup in France changed that, spurring FIFA to begin selling many more of the women’s rights separately.
FIFA also is in the process of calculating a separate value of the Women’s World Cup rights for the first time, according to a person familiar with the matter. This person said that FIFA is projecting the value of media rights for the 2023 Women’s World Cup will be more than $300 million.
Part of that, however, comes not from new rights sales, but rather from assigning the women’s tournament an estimated portion of packaged deals like the one Fox has through 2026 for the U.S. English-language broadcast rights to the men’s and women’s World Cups, according to the person familiar with the matter. Some of the $300 million figure also comes from new rights sales for the 2023 tournament, though this person didn’t detail how much of the total that accounts for.
Regardless, a value of $300 million would make the tournament the most valuable women-only sporting event in the world, according to Minal Modha, principal analyst—consumer research lead for London-based media and research firm Ampere Analysis.
FIFA anticipates that the fees for the U.S. rights to the 2027 Women’s World Cup, especially if it’s located in North or South America, would be greatly enhanced, according to the person familiar with the situation. The U.S. and Mexico recently announced they’ll make a joint bid to host. A Fox spokesman declined to comment.
WNBA
Engelbert said the WNBA will seek a deal worth more than $100 million a year after its current agreement with ESPN expires after the 2025 season.
“We think we can go big and bold and aggressive as we think about what we would return on that investment for these media partners,” Engelbert said.
Still, selling a relatively young league and a week-to-week audience is harder than selling large one-off events, Kosner said.
“Ten games with 1 million viewers is a less valuable advertising vehicle than 1 game with 10 million,” Desser said. “There is an exponential increase in value as the audience size grows. That’s why the NCAA women’s number is a big deal. It takes it into the major-event category—a tentpole.”
Yet there is room for women’s rights fees to simply move into the same neighborhood as those for men’s leagues. MLS and the WNBA had similar ratings on ESPN last year and have a similar number of regular-season games this year. But the WNBA’s broadcast-rights deals are worth roughly $35 million, or 14% of MLS’s 10-year deal with Apple worth $250 million a year.
Engelbert said that large rights deals allowed men’s leagues to boost player salaries and increase the number of charter flights to games—things the WNBA is doing incrementally.
National Women’s Soccer League
At 11 years old, the NWSL is the smallest rights holder of the bunch.
Its current deal with CBS, in its final year, is worth about $1.5 million annually. The NWSL is in the midst of shopping its media rights and anticipates making a deal this summer, commissioner Jessica Berman said, declining further comment. A CBS spokesman declined to comment.
The league has suffered through a major scandal in recent years involving misconduct allegations against coaches and executives at nearly every team in the league, resulting in bans and other sanctions. Yet there are signs that its value as a media property could rise.
Just a few years ago, teams were selling for a few million dollars and some players were changing into uniforms in porta-potties. In recent months, global investment firm Sixth Street Partners won a bidding war to become majority owner of an NWSL expansion franchise in the Bay Area for $53 million. That team, along with the return of a team in Utah, will bring the league to 14 teams in 2024. A 15th franchise, in Boston, will launch at a later date.
CEO Alan Waxman of Sixth Street, which has $65 billion in assets under management and investment stakes in Real Madrid and FC Barcelona, called the NWSL one of the most lopsided investment cases he’s seen. He thinks in a decade, the league’s rights could be at parity with the MLS’s much larger deal.
“That’s our base case,” Waxman said. “And that’s not informed by emotions. It’s informed by data.”
John Kosner Spoke with Mike McCarthy of Front Office Sports About NBC’s Interest in NBA Media Rights
Original Article: Front Office Sports, by Mike McCarthy, April 15th, 2023
Good morning and welcome to the first round of the NBA postseason! This is Senior Writer Mike McCarthy. The upcoming multibillion-dollar negotiations for media rights could feature some fascinating corporate mind games.
There’s the possible network TV battle pitting 20-year incumbent ESPN against the league’s former media partner NBC Sports, and the possible faceoff between their rival parent companies: The Walt Disney Co. and NBCUniversal’s Comcast Corp.
But there’s also the possibility of another mano a mano duel between two media moguls who have clashed repeatedly over the years, Disney chief executive officer Bob Iger and Comcast chairman Brian Roberts — and the grand prize is the future of NBA rights.
The NBA’s Media Future Could Be Decided by a Bitter CEO Rivalry
When its next cycle of long-term media rights begins with the 2025-26 season, the NBA will seek a combined $50 billion to $75 billion.
During an exclusive negotiating period next year, the Walt Disney Co.’s ESPN and Warner Bros. Discovery Sports’ TNT will defend their rights that go back to 2002 and 1984, respectively. But a familiar heavyweight could step in later — and a decades-long feud between executives could be central to the battle.
The Peacock has a deep connection to the $10 billion league. Its 12-year run with “The NBA on NBC” from 1990-2002 is fondly remembered as a golden age for basketball broadcasting.
Iconic announcers like Bob Costas and Ahmad Rashad brought Michael Jordan and the late Kobe Bryant into millions of homes. Games were introduced to the pounding score of John Tesh’s “Roundball Rock,” one of the most popular sports themes ever.
Now, Comcast’s NBCUniversal wants an NBA package including playoff games for its broadcast network and regular-season games for its Peacock streaming platform, according to CNBC.
That means the stars could align for a WWE-like rematch between Comcast chairman/CEO Brian Roberts and his nemesis, Disney CEO Bob Iger — who has won most of their battles.
But if NBC snatches the NBA from ESPN, Roberts could win the war.
“Brian Roberts and Bob Iger are personal rivals — as well as business rivals,” noted Matthew Belloni, former editor of The Hollywood Reporter turned co-founder of Puck News.
“If they can make a smart choice for their own company — and screw over the other guy — they are going to do it.”
Bad Blood
The upcoming high-stakes NBA negotiations could be the latest flashpoint in a prickly history fit for a Hollywood script.
The talks arrive on the 20th anniversary of Comcast’s $54 billion hostile takeover attempt against Disney, led by Roberts.
Roberts wanted Disney mostly for ESPN, then at the peak of its distribution and financial success. Comcast eventually dropped its bid, but the audacity of a cable operator from Philadelphia trying to seize the iconic House of Mouse outraged the Disney board.
It also paved the way for then-Disney president Iger to replace Michael Eisner as CEO.
In 2018, the rival CEOs went head-to-head again, this time for the spoils of Rupert Murdoch’s 21st Century Fox media empire.
Again, Iger emerged victorious by early 2019, swallowing Fox’s wide-ranging entertainment assets for the staggering price of $71.3 billion. But Roberts’ unsolicited $65 billion all-cash offer forced Disney to cough up nearly $20 billion extra.
“Iger is getting shit right now for the cost of the acquisition of most of Fox,” Belloni said. “But the only reason it cost $71 billion is because Comcast ran up the price. The original price was the low 50s [$52.4 billion].”
Roberts posted a W of his own in 2018 when Comcast won a transatlantic bidding war with Disney for British broadcaster Sky. The price tag: $39 billion.
No wonder the New York Times described Roberts as the “Magic Kingdom’s Nemesis-in-Chief.”
Study In Contrasts
A middle-class kid from Long Island, Iger rose from a humble weatherman to succeed the late Walt Disney as head of the world’s most famous family entertainment company.
During his legendary CEO run from 2005 to 2021, Iger bought Pixar for $7.4 billion (2006), Marvel Entertainment for $4 billion (2009), Lucasfilm for $4.1 billion (2012), and 21st Century Fox (2019).
With successor Bob Chapek floundering, the board invited Iger back as CEO in November. But the clock is ticking: He’s only got another 18 months at The Happiest Place on Earth before giving way to another successor.
In one of his first moves since returning to the $82 billion entertainment giant, Iger reorganized Disney, naming ESPN one of three global pillars along with Disney Parks and Disney Entertainment.
He also dismissed calls from activist investors to spin off ESPN, describing it as a “differentiator” for the Mouse, but there are still Hollywood observers who believe he and Disney could part ways with ESPN.
Belloni wrote in his Puck newsletter that siloing ESPN as its own unit makes it easier to sell or spin off. His colleague Bill Cohan speculated Roberts could finally get his mitts on ESPN by swapping Comcast’s 33% stake in Hulu for Disney’s 80% stake in ESPN. That could set up a possible merger between Comcast’s NBCUniversal and Warner Bros. Discovery in 2024.
“There may come a time when [Iger] is essentially forced to sell [ESPN] by the economics of that business,” warned Belloni. “If the rights fees keep going up, the cable fees keep going down, and the streaming business does not mature in the way they hope it does, then it just doesn’t make sense for them to stay in that business.
“But I think Iger wants to stay in that business.”
The Philadelphia native Roberts is the ambitious, hard-driving scion of Comcast founder Ralph Roberts. The junior is a member of Augusta National Golf Club, the country’s most powerful private club.
Roberts has equalled Iger as a dealmaker. He bought AT&T Broadband for $29.2 billion in 2002, NBCUniversal in two separate transactions in 2011 and 2013 worth $30 billion, and Sky. He also grew Comcast’s annual revenue from $657 million in 1990 to $121 billion in 2022.
With his family controlling a one-third stake in Comcast, Roberts isn’t going anywhere.
Peacock Power
The interest is likely mutual between the NBA and NBC.
Consumers are turning away from pay cable networks like ESPN and TNT, which makes free, over-the-air broadcast channels like NBC increasingly attractive to sports leagues looking for the broadest footprint.
NBC’s “Sunday Night Football” — distributed in virtually every U.S. TV home — has reigned as the No. 1 show in prime time for a record 12 straight years.
Don’t think the NBA doesn’t know it, said media consultant John Kosner.
“NBC was a terrific and transformative broadcast partner for the NBA from 1990 to 2002. They have prime-time windows Saturday nights after their new Big Ten package kicks in. And they have Sunday night windows after the NFL season,” said the former ESPN executive. “So they make a ton of sense. I don’t think the NBA is at all dissatisfied with the partners they have. But competition is always a good thing if you’re a rights-holder.”
Under their current rights deals, incumbents ESPN and TNT pay a combined $24 billion, or $2.6 billion annually.
Both ESPN and NBC declined to comment for this story, but ESPN’s Pitaro previously told The Athletic he wants to retain the NBA.
“It’s an incredibly important property for us,” he said.
Who Wants It More?
NBC is just one of several options for the NBA, which is expected to sell multiple rights packages — including one to a giant streamer such as Amazon Prime Video (which has a deal with the NBA in Brazil). Other bidders could include Apple, Google/YouTube, CBS Sports, and Fox Sports.
The NBA could simply re-up with ESPN and TNT for higher fees like it did in 2014, when it signed nine-year extensions with the duo beginning in the 2016-17 season. Other companies never got to bid.
But economic headwinds could redraw the competitive map for leagues and media companies alike.
Cost-cutting WBD Sports boss David Zaslav sent shockwaves through Wall Street in November when he declared, “We don’t have to have the NBA.”
Iger has ordered Disney to slash 3% of its global workforce, which would mean 7,000 lost jobs and $5.5 billion in cost savings. The layoffs could come down any moment at ESPN headquarters in Bristol, Connecticut.
With cord-cutting hammering their bottom lines, will ESPN and TNT pay what it takes to retain the NBA?
One sports TV executive thinks they will: “When companies are hemorrhaging money, they cut costs to afford the stuff they want to keep. I have no doubt they want to keep the NBA.”
Meanwhile, cash-rich Comcast and Roberts could be waiting in the wings to write a big check and get payback on a vulnerable Disney and Iger.
When Comcast’s NBCUniversal bought DreamWorks for $3.8 billion in 2016, Roberts admitted to “Disney envy,” according to the Wall Street Journal. But Iger may be the one who turns green if Comcast can steal the NBA from Disney and ESPN.
“That would be a coup if NBC could get those rights back. But it’s all about price,” Belloni said.
John Kosner Moderated an NFT.NYC 2023 Panel: “The Future of Fandom is On-Chain: Previewing Blockchain’s Role in Sports and Media”
Original Article: NFT.NYC 2023, by April 13th, 2023
John Kosner moderated an NFT.NYC 2023 panel titled “The Future of Fandom is On-Chain: Previewing Blockchain’s Role in Sports and Media” with Essem Harris.
John Kosner Moderated an NFT.NYC 2023 Panel: “What’s Next in Sports and NFT’s”
Original Article: NFT.NYC 2023, by April 13th, 2023
John Kosner moderated an NFT.NYC 2023 panel titled “What’s Next in Sports and NFT’s” with Pet, Brad Feinstein, and Asher Weiss.
John Kosner Spoke with Tom Dart of The Guardian About the RSN Crisis and MLB
Original Article: The Guardian, by Tom Dart, April 3rd, 2023
Local broadcasters are crucial for MLB. Now many are in trouble.
One of baseball’s largest broadcasters has filed for bankruptcy. But even with some revenue streams threatened, teams are rising in value
Tucker Carlson didn’t stand a chance. In the battle for eyeballs in St Louis, the Fox News provocateur could never own primetime like Albert Pujols.
St Louis Cardinals games during the beloved slugger’s farewell season last summer were watched by more than four times as many viewers in the MLB team’s home city as the next-most popular cable show, Tucker Carlson Tonight on Fox News.
That points to the enduring popularity of local broadcasts in baseball hotbeds – but with the new MLB season only a few days old there is off-field turmoil sparked by the bankruptcy of America’s leading regional sports network.
The product may well be more attractive this year thanks to the rules tweaks, but how many armchair fans will be watching? Broadcasting baseball is becoming more complex and contentious as the television industry is buffeted by turbulence in the streaming and cord-cutting era. The way viewers consume sports is changing, disrupting a business model that for decades turbocharged team revenues and player salaries.
Diamond Sports, which runs 19 regional networks under the Bally Sports brand, filed for bankruptcy in March, threatening the live game broadcasts of 42 major league teams – 14 from MLB, including the Cardinals, 16 from the NBA and 12 in the NHL – as well as $2bn in combined annual rights fees, about half of which goes to baseball.
What’s more, Warner Bros Discovery has been seeking to exit the regional sports network (RSN) arena and shut down its AT&T SportsNet channels, affecting seven teams, including the World Series champion Houston Astros.
The NBA and NHL regular seasons are about to end so they are less impacted and have plenty of time to work out a solution before the next campaign. And local deals are less critical to the bottom line in the NBA. Its $24bn national rights deals are up after the 2024-25 season and few analysts would be surprised if the league doubles its money next time.
While local rights represent about 15% of income for the NHL and NBA, MLB relies on local media for nearly a quarter of team revenues and its 162-game regular season make it a cornerstone for sports channels who can bank on the league for hours of live action nearly every day.
Typically, leagues manage national broadcast rights while franchises make deals for their regional markets. RSNs have long been viewed as desirable entities that can attract viewers to cable operators such as Xfinity and Spectrum, so they command high carriage fees – in excess of $7 a month per subscriber for the most-watched, the New York Yankees’ YES Network – which are passed on to customers in their monthly bills regardless of whether they can tell Mike Trout from a rainbow trout.
Being subsidised by 100% of cable subscribers even if only 2% of them watched the channel was a lucrative strategy for RSNs and teams alike, especially in big cities. But rising costs are a problem for traditional pay-TV companies as price-conscious customers leave in droves and expect more control over what they buy. In one common analogy, content consumption is moving from a set menu to à la carte – non-baseball fans reasonably don’t want to pay for games they don’t even watch. In 2021 the Dish TV president described the RSN model as “fundamentally broken” and Dish dropped all its RSNs.
That loss of leverage is quite a shift from 2000, when the Texas Rangers credited a local television pact with giving them the financial muscle to hand Alex Rodriguez a then-record contract worth $252m over 10 years. The ground has even budged dramatically since 2013, when the Los Angeles Dodgers signed a local deal worth $8bn over 25 years. A staggering sum – especially when you consider that for six years, only about half the households in Southern California were able to access the channel.
Diamond missed a $31m payment to the Arizona Diamondbacks in mid-March, Sportico reported – about half the team’s annual RSN income. Since the decades-long RSN bonanza boosted player salaries, it is fair to wonder if the on-field product will be affected if revenues decline. After the 2013 deal the Dodgers have boasted MLB’s highest opening-day payroll most years and have reached the playoffs every season.
But Diamond’s interest payments to creditors are a bigger problem than any declining interest from viewers. When Diamond was formed in 2019 as a subsidiary of the giant Sinclair Broadcast Group, it borrowed about $9bn to pay for networks previously owned by 21st Century Fox and Disney. That debt load proved to be too heavy, though for now at least it continues to air games.
Across the country, according to MLB, on the average regular season day, 2.3m fans watch baseball games on an RSN. Live sports remain prized by broadcasters since the audiences are declining more slowly than for other types of content. And there is more competition to drive up national rights at auctions, with tech companies such as Apple and Amazon potentially bidding against traditional networks.
In 2022 MLB hit a new record of nearly $11bn in revenue across its 30 teams, thanks, as Forbes notes, to sponsorship and media deals. In-game betting is a likely growth sector and fresh way to monetise broadcasts as states slowly loosen their gambling laws. (Bally, after all, is a casino and online betting operator.)
According to Statista, in 2013 100.5m households in the US (out of a total of 122.5m) subscribed to traditional pay TV services, such as cable or satellite. By 2022, although the number of American households rose to 131.2m as the population grew, subscribers sank to 65.1m and are projected to fall to 47.8m in 2027.
“The old model was practically ideal for rights holders,” says John Kosner, a sports and digital media consultant and former ESPN executive. “It’s impossible right now to reach all sports fans, especially young ones, through traditional channels. Even if the RSNs sustain in a form that looks like it does today, you’re still not reaching a big chunk of your younger fanbase that way so that’s an additional concern for clubs.”
With a fanbase that skews relatively old, MLB needs to cater to an audience that is comfortable with the traditional subscription model while also appealing to younger viewers who have never known a time without smartphones and streaming and will probably never become cable or satellite TV customers.
Despite its fusty image the league is a pioneer in digital streaming. It launched MLB.TV, an out-of-market streaming service, back in 2002. But plenty of games on the platform are blacked out to preserve exclusivity for RSNs and national broadcasters.
A future template may resemble the new $2.5bn, 10-year deal Major League Soccer struck with Apple: regional broadcasts were axed in favour of a centralised streaming subscription service that makes every game available everywhere to everyone. A few matches are also shown on Fox Sports, giving MLS a degree of visibility to casual fans who can’t or won’t pay $14.99 a month for the Apple offering.
Sports media executives are keeping a close eye on how MLS Season Pass works out. It’s a simple, modern and streamlined approach and perhaps one that appeals to other leagues; MLB appears interested in taking control of local rights. But it’s not so easy to implement. Baseball is a far more valuable local property than soccer; RSN deals expire at different times and some remain profitable; the big clubs may insist on controlling their own content and squabble over revenue sharing; and it’s uncertain how the Diamond drama will play out.
So the end of RSNs is likely to be gradual and city-by-city, rather than swift and sweeping, as teams, leagues and media companies pursue whatever strategy they feel is most profitable. “The revenue is a linchpin to how the clubs operate, player salaries etc. There’s a difference between what one might like to do and what you feel you have to do in order to manage these leagues,” Kosner says.
The RSN-owning Yankees and Boston Red Sox have introduced direct-to-consumer subscription streaming services (priced around $20-30 a month). Rivals will be taking a keen interest in how many fans sign up and how on-field results affect subscriptions.
Who would want to be the Astros executive who decides the team can’t afford to re-sign José Altuve in 2025, for example, because the franchise that had a $73m-a-year rights deal moved its games to a streaming service that didn’t attract many customers? Or could the Astros spend whatever it takes to keep their star second baseman out of fear that his departure would prompt an exodus of month-to-month subscribers?
As Sports Media Watch details, some struggling teams, such as the Rangers, Oakland Athletics and Miami Marlins, benefit from RSN deals that look wildly generous given their modest viewing figures. They’d face huge cuts in revenue if forced to depend on streaming services where there’s a tighter relationship between level of income and size of fanbase.
In the short-to-medium term, it’s realistic to expect that RSNs and streaming services will air the same games, similar to how the same blockbuster films can be found in a variety of places, from old-school cable TV to Amazon Prime, at different price points.
“The ratings are quite good for regional sports networks compared to some TV. Certainly baseball has a strong regional sports audience so I think there’s no way that’s going away,” says Jon Lewis, founder of Sports Media Watch. “Maybe there is a centralised place where you can watch games out-of-market and in-market for the same price, at the same time those games are available over the air.”
Ultimately, the bubble is altering shape but is unlikely to burst. Forbes estimates that last year’s revenue growth means the average MLB team value is up 12% in 2023 to $2.32bn despite the RSN worries. In February the NBA’s mid-sized Phoenix Suns were sold (together with the Phoenix Mercury of the WNBA) for $4bn – by far the largest price in NBA history. Clearly, billionaires believe that major league teams remain shrewd investments.
“These franchises are like beachfront property. There are many, many wealthy people, there’s a limited number of the franchises so I believe that’s one big factor driving the appeal and the valuations,” Kosner says. “And second, I believe that the people in sports think that ultimately this is going to be figured out and that there are going to be new, profitable growth strategies at play because of the power of sports in its community, its differentiation from other forms of entertainment.”
Lewis agrees. “Look at the franchise values, they continue to rise,” he says. “Teams will always find a way to make more money.”
John Kosner Spoke with Dan Weil of TheStreet About Turmoil in Local Sports TV
Original Article: TheStreet, by Dan Weil, April 1, 2023
Turmoil Hits Local Sports TV, But Your Viewing Should be Safe
The biggest owner of regional sports networks has declared bankruptcy. Teams and leagues may take more control.
The times they are a changin’ (as Bob Dylan sang) in the world of televising games of local sports teams.
Bankruptcy has been declared by Diamond Sports Group, whose 19 Bally Sports networks show the games of more than 40 Major League Baseball, basketball and hockey teams to their local audiences.
Also, AT&T Sports Networks, a Warner Bros. Discovery (WBD) - Get Free Report subsidiary that owns three regional sports networks and has a stake in a fourth, wants to get out of the business.
“Clearly the RSN [regional sports network] model is in decline,” John Kosner, president of Kosner Media consulting firm, told TheStreet.com.
To appreciate what’s going on, it helps to understand how the RSN business model has worked for years. There are several moving parts. RSNs pay a sizable sum to teams to broadcast their games on local cable/satellite channels.
In the End, Consumers Pay Up
For example, Spectrum Sports Net LA paid $196 million to the Dodgers last year for broadcast rights, according to Forbes. That’s the highest sum in Major League Baseball.
The RSN then charges a fee to cable and satellite carriers such as Comcast (CMCSA) - Get Free Report and Dish Network to recoup the money the RSN pays to teams.
Many RSNs charge more than $5 per month per subscriber, according to Kagan research firm. That means RSNs are the most expensive networks for the carriers after Disney's (DIS) - Get Free Report national sports broadcaster ESPN, according to CNBC.
The cable and satellite carriers then charge viewers for the channel. For example, in West Palm Beach, Fla., a subscriber would pay Comcast $16.45 per month for a RSN – Bally Sports Florida.
But as you’re no doubt aware, many TV viewers don’t want to pay for channels they don’t watch, which may include sports channels. So they’re dropping their cable/satellite service – cord cutting – and streaming individual networks or bundles such as YouTube TV online.
With fewer customers, cable/satellite carriers have less money to pay RSNs, which means RSNs have less money to pay teams. And that has created the industry’s mess.
Experts: Viewers Should be Safe
The good news is that the turmoil won’t take away your ability to watch your home teams’ games, experts say. Baseball has the most immediate relevance, because the season has just begun.
“Major League Baseball has prioritized making sure games are available to be watched over everything,” Daniel Cohen, executive vice president of media rights consulting at sports agency Octagon, told TheStreet.com. “It may be streaming-only or MLB Network-only for a short time,” but the show will go on, he said.
So how will the RSN business change, given the industry’s turmoil? One thing that’s clear is the networks need to take in money beyond traditional-TV game broadcasts and streaming, experts said.
“If they don’t create additional revenue, then they’re operating a business that’s unprofitable,” Cohen said. The best-case scenario for RSNs would be a “one-stop shop” for fans, including betting, ticket buying and one-click merchandise purchasing, Cohen said.
Meanwhile, the days of watching all your team’s games on a single RSN channel may be over. “It might be that RSNs show home games and over-the-air (local) broadcasters pick up certain road games,” Kosner said. “Or the games might be available on a mix of over-the-air, pay TV and streaming.”
Curt Pires, president of Cap Sports Group, a sports media consulting firm, sees the center of gravity shifting from RSNs. “Leagues will participate with teams” in local broadcasting, he told TheStreet.com. “That’s where we’re heading.”
For example, in Houston, the Astros and Rockets are negotiating to take over AT&T SportsNet Southwest. “We might have more of that,” Pires said. “It’s a healthy way to do business. Teams don’t want to sell their rights, and third parties [RSNs] realize they can’t squeeze a profit anymore.”
John Kosner Spoke with Adam Zagoria of Forbes About Big East Media Deal Prospects
Original Article: Forbes, by Adam Zagoria, March 22nd, 2023
The coaching changes at St. John’s and Georgetown — and the expected uptick in performance by both teams as a result — should benefit the Big East Conference as it seeks a renewal deal with media rights holder FOX Sports in the coming months. The current agreement has two more years through the 2024-25 season.
St. John’s on Tuesday introduced Naismith Hall of Famer Rick Pitino as its new coach, while Georgetown on Wednesday will have a press conference featuring Ed Cooley, who left Big East rival Providence to succeed Patrick Ewing in the nation’s capital.
“It’s big time,” said John Kosner, a consultant and former ESPN Digital executive who previously served as an advisor to the Big East. “When the Big East was at its apex the NYC-D.C. Northeastern corridor was the center of attention. It’s coming back now with the two new coaches in town. On a slightly smaller scale, I liken it to what the resurgence of the Celtics-Lakers rivalry 15 years ago did for the NBA.”
Kosner was referring to the Big East’s heyday in the 1980s when Lou Carnesecca coached at St. John’s and John Thompson Jr. at Georgetown. In 1985, three Big East teams reached the Final Four — St. John’s, Georgetown and Villanova — with Villanova beating Ewing and the Hoyas in the championship game.
Since the formation of the “new Big East” in 2013, FOX has been the Big East’s media rights holder. Prior to that, ESPN was the league’s home.
Big East Commissioner Val Ackerman recently announced that the conference intends to initiate talks to renew its media rights deal with Fox, and Kosner said the league is “well-situated” with the additions of Pitino and Cooley, along with the return of UConn to the Big East.
“They have a good deal with FOX now that includes plenty of FOX broadcast windows,” Kosner said. “FOX has been an excellent partner. The key with these deals is having competitive bidders. The St. John’s and Georgetown announcements raise those odds.”
Under Ewing, Georgetown won just two Big East regular-season games combined in the last two seasons and finished in last place both seasons. Under Mike Anderson, St. John’s finished in seventh and eighth place the last two years, respectively. The expectation is that Pitino and Cooley will help turn both programs around.
“St. John’s is one of the legendary names in all of college basketball,” Pitino said Tuesday. “Has it fallen on tough times? Yes it has. But now we’re ready to fall on great times. We’re ready to raise this roof up because St. John’s is going to be back. I guarantee that.”
As for Georgetown, Big East Commissioner Val Ackerman said it’s important for the league for the Hoyas to be relevant.
“We need Georgetown on a high perch,” she said in a one-on-one interview at Pitino’s press conference at Madison Square Garden. “They’re one of the biggest brands, if not the biggest brand in the Big East, [they] have a proud history. They’re very determined to restore past glory and they clearly think that Coach Cooley can get them to where they want to go so I think from that standpoint it’s very exciting with great coaches in the Big East but the bar just got raised.”
Meantime, the Big East has three teams in the Sweet 16 of the NCAA Tournament in UConn, Creighton and Xavier. Kosner said the return of UConn to the league in 2020 also bodes well for future rights negotiations.
“Another key is the return of UConn and its impact on both men’s and women’s basketball,” he said. “Plus the conference’s Midwest expansion (Marquette, Xavier and Creighton, Butler, DePaul) has built followings in some key TV markets).”
Kosner called Ackerman “one of the savviest leaders” in college athletics.
“The Big East Tournament drew very well two weeks ago in New York City and has fought off the ACC, Big Ten and others in New York City over championship week,” he said. “Three Big East teams are still alive in the NCAA Men’s Tournament, two in the Women’s. In a very challenging environment you have to continually improve your product. The Big East is doing that. I think they are well-situated.”
Last August, the Big Ten completed a 7-year, $7-billion media rights deal with Fox, CBS and NBC that begins July 1. As Awful Announcing pointed out, if the Big East strikes another deal with FOX, “Those Big Ten games may wind up across BTN, Fox, FS1, and FS2, reducing available slots for other conferences.”
Ackerman participated in Pitino’s introductory press conference Tuesday at Madison Square Garden and said in a one-on-one interview she believes the Big East is in good position going into its next media rights negotiations.
“We feel like we bring great value to FOX and they bring great value to us,” Ackerman said. “It’s been a great partnership, and we know that our attractiveness in the market is going to come down to not only the size of our markets — we’re in some of the biggest media markets in the country — but the quality of our competition and the strength of our individual school brands. And the quality of our coaches is a way to get to the strength of brand that we need, whether it’s for FOX or anybody else.”
"How to Weather Uncertainty in the RSN Marketplace," John Kosner's Latest SBJ Column with Ed Desser
Original Article: Sports Business Journal, by John Kosner and Ed Desser, March 20th, 2023
Regional sports networks are in the news recently, with the Diamond Sports and WBD/AT&T Sports Networks in financial difficulty. These developments potentially put at risk the major exposure and significant revenue of some 50 U.S. pro sports teams. How should those teams, and others with RSN deals, attempt to weather the crisis? We have these 10 timely suggestions:
Know your agreements. Sounds obvious but the business details, dates, breach and cure provisions, etc., are critical now. Make sure you know about the various contingencies built into your agreement(s), and get legal advice from your team counsel about dos and don’ts.
Keep up to date on industry developments. Things are starting to happen, or at least be reported, day-to-day, so you need to focus much more attention on the matter in the coming weeks. We set Twitter notifications for the key national and local reporters and industry analysts covering this story. Be sure to regularly circulate what you learn to the key executives at your team, including PR, business ops, marketing, etc.
Check in regularly with league media executives, other teams in your market on the same RSN, and other teams served by the same RSN holding company. You can share information that is unlikely to be covered in the trades or business press.
Get educated on the bankruptcy process. Laymen tend to have little knowledge of the process until they must deal with it. Take the time NOW to find out how it works so that you can anticipate the best responses for your organization. You may be surprised.
Understand all of your alternatives. Games used to be carried on local broadcast stations before RSNs. Now there is also streaming, which can be done regionally, nationally or internationally, subject to league parameters. Also, it is possible for a league to make arrangements, which could dovetail with its network (e.g., MLB Network or NBA TV) or through arrangements in combination with out-of-market packages (e.g., NBA League Pass or MLB.TV). Talk to local TV station executives in your market. Some Scripps station executives have already mentioned an interest in getting back into local sports. We expect growing interest from alternative parties. When we worked at the NBA, the focus was on our list of “assets.” What could we deploy as necessary? What are the assets you can bring to bear to improve your local TV business — tickets, events, access, merch, etc.? Put your list together.
Be ready to act yourself. No one cares about and knows your team, your fans, and your market more than you do. That means you should take necessary steps NOW to be ready to produce games, handle sales, and arrange for some form of distribution in a worst-case scenario (see No. 5 above). In our experience, crisis situations can generate novel, sustaining solutions because people have to think differently. The typical RSN broadcast hasn’t changed in decades. What’s the appropriate update for your team? What’s the perfect blend of on-air talent old and new if you have to look at things fresh?
Use this opportunity to generate the best local fan email list now, in case you need to be marketing to them tomorrow. For example, team email lists, social media accounts, season, package, group, and individual ticket buyers can all be prospects. Also, beware that the downstream impact of possibly losing RSN coverage affects your fans, also meaning ticket sales, merchandise, community events — everything down to betting activity.
Perform some local market research. How do your fans feel? What packages would they prefer? What pricing options are they willing to pay? What other streaming services do they already use? What’s the plan for younger millennials, Gen Z, and Gen Alpha, whose viewing behavior is vastly different from older fans? This will help you to build a P&L, with appropriate result ranges. We favor developing actionable questionnaires.
Talk to your sponsors. Perhaps one or more are a good fit as a possible streaming partner. Local retailers, telecoms, and even cable operators could have an interest in an even tighter relationship with your team and your fans. Many are well-positioned to complement your efforts and help you succeed. Casting the RSN crisis as a community opportunity can yield win-win-win local teamwork.
Understand the basics of operating a streaming service. Deltatre, Endeavor, ViewLift, iStreamPlanet, Kiswe and others could provide you with a one-stop solution to the front end, ordering, billing, creating a library, and managing the streams themselves. FloSports and DAZN are also buyers of sports rights in a more traditional manner. There is much more to learn. In our careers, challenging situations forced us to stretch ourselves and become wiser on subjects we knew little about. Long term, those experiences have been invaluable.
Hopefully, you will not experience an interruption in your game delivery and payments, but it’s smart to be ready. Remember former Secretary of State James Baker’s “Five P’s”: “Prior preparation prevents poor performance.” A little bit of preparation now can make all the difference in turning a potential nightmare into a new business opportunity, as the sports media business evolution continues!
Ed Desser is an expert witness and president of Desser Sports Media Inc. (www.desser.tv). He has negotiated dozens of current RSN agreements. John Kosner is president of consultancy Kosner Media (www.kosnermedia.com) and managed ESPN’s streaming operations for over a decade. Together they developed league TV strategy and ran the NBA’s media operations in the ’80s and ’90s.
Questions about OPED guidelines or letters to the editor? Email editor Jake Kyler at jkyler@sportsbusinessjournal.com
John Kosner Spoke to Jon Wilner of Pac-12 Hotline about the Impact of Betting & Data on the Pac-12 Media Deal
Original Article: Mercury News, by Jon Wilner, March 8th, 2023
Pac-12 media rights: How sports gambling and the sale of statistics could fuel revenue growth
The Pac-12 began planning to sell its data last spring, before everything changed.
A year ago this week, Pac-12 commissioner George Kliavkoff sketched a strategy for developing future revenue streams during a news conference at T-Mobile Arena in Las Vegas.
He had no idea that USC and UCLA would announce their departures to the Big Ten a few months later, undermining Kliavkoff’s pursuit of a media rights deal that could secure the future of the 108-year-old league.
But one component hasn’t changed an iota: The potential impact of gambling in general, and the sale of statistical data specifically, on college sports.
“Data is part of media rights, and media rights is one of the issues at the top of our agenda,” Kliavkoff said last year. “We will certainly discuss data rights as part of that package.”
A few days later, the Pac-12 partnered with Tempus Ex Machina, a data technology company based in San Francisco. The agreement created a foundation from which the conference could sell its data and statistics to media, gaming or technology companies.
“This is all designed to be ready for our media rights negotiations,” former Pac-12 Networks president Mark Shuken explained at the time. “We’re trying to get ahead of the future in terms of the fan experience and products and our ability to monetize our data.”
Now here we are, 51 weeks later, and the conference is in the final stages of negotiating a media rights deal and making a decision on expansion. The data piece should not be ignored as a potential source of cash.
In anticipation of sports wagering playing a pivotal role in the process, the Hotline reached out to John Kosner, a former ESPN executive vice president for media (digital and print).
We asked the Kosner Media chief about the impact gambling and data could have on ESPN’s negotiating strategy and the Pac-12’s media revenue.
(Note: The interview was conducted last year, when we thought the Pac-12 was close to announcing a media rights agreement. Kosner has subsequently reviewed his comments to account for any changes to the media and wagering landscapes.)
— Is there a way to estimate the value of a direct sale of Pac-12 statistical data to gambling companies?
It’s a new grant-of-rights that will increase as more and more states adopt not just legalized sports betting but legalized mobile sports betting. It’s worth noting that in the Pac-12 territory, sports betting is legal in four states:
* In Arizona and Colorado, mobile sports betting is legal, as is wagering at several physical locations;
* In Oregon, mobile sports betting is legal on the DraftKings app and is available physically at Native American tribal casinos;
* In Washington, sports betting and mobile sports betting are legal only at Native American tribal casinos;
And, of course, in California there is no sports betting at all, at least for now.
Could mobile sports betting impact TV rights in those markets? Would it encourage betting companies to be more aggressive about getting into the sports rights business? Probably!
Today, all of the Power Five conferences are looking to package an advanced data set featuring real-time information, beginning with football and men’s and women’s college basketball.
That type of data feed has value to basketball and football operations staffs, as well as conferences, betting companies, TV broadcasters and in-venue operations. These rights command escalating seven-figure annual sums – helpful but not game-changing.
New money from advanced data is like sports merchandise. It’s incremental to the existing pie, but core aspects like tickets, sponsorships and media still represent the biggest revenue streams.
— So the value play is really a longer-term proposition: Gambling drives engagement, which can drive audience growth over time?
That is the assumption. I have seen estimates that the betting audience is 10 percent to 15 percent of total viewership, so consumption increases due to betting remains small and unproven.
A wild card here is the development of same-game parlay bets becoming the majority of sports betting. To the extent that these bets proliferate and become easier to market and fun to play and expand the betting audience to more casual fans, more growth is possible.
Meanwhile, TV ratings for sports, especially college and pro football, have been quite strong post-COVID. Many fans were betting illegally on college football and basketball prior to the Supreme Court decision (PAPSA, 2018), which initiated the current state-by-state legalized betting activity.
Of course, betting may also help to generate greater interest in viewing, going to games, and supporting teams, so each of these core revenue streams could also be enhanced. But it’s likely that this will happen gradually.
— How much will capturing the sports wagering audience motivate media companies to partner with the Pac-12, especially for 7:30 p.m. Pacific kickoffs? That’s a great time for bettors to recoup losses from earlier in the day.
The “fourth” national window in West Coast primetime is an attraction. It’s a key differentiator for the Pac-12 with its national brands like Oregon, Washington and Stanford, plus the Arizona schools, Utah and Colorado. That fourth window will continue to increase in value, especially as more and more states legalize sports betting and move to mobile betting.
I believe you will see schools, and other conferences, looking for new windows in order to appear on national TV – early evenings, weekday afternoons and even mornings over the next decade.
— Is there a way to connect the dots between the sports gambling viewership and ESPN’s strategic decisions on college football properties?
I believe it’s peripheral. ESPN wants to continue to program as much big-time college football, including the College Football Playoff, as it can. It needs to do so to fulfill its agreements with cable/satellite distributors and streamers, as well as to maximize its opportunities with advertisers and grow ESPN+ subscribers.
If there is a demonstrable correlation between betting volume and increasing audiences for college football and basketball, that is so much the better. But ESPN had the exact same strategy in place prior to the Supreme Court decision. Nothing has changed.
Over time, if we see a more formal tie-up between ESPN and the betting companies, that could impact ESPN’s strategies regarding college sports.
— Can you estimate the revenue potential within those decisions? In other words, the gambling piece could increase media rights deals by X percent?
This is just conjecture on my part, but I think the impact of betting into the near future is a less than 10 percent factor, similar to merchandise as I mentioned earlier.
The fierce competition for premium sports rights — former ESPN president John Skipper called these, “beachfront properties” — between TV and cable networks, tech companies like Amazon, Apple and Google and, soon, betting companies such as Fanduel (with Fanduel TV), is driving rights deals higher right now.
The wild card here is in-play betting, which I believe will develop during the second half of this decade.
That could be a game-changer for media rights, especially in light of cable’s demise and streaming’s ascendancy.
*** Send suggestions, comments and tips (confidentiality guaranteed) to pac12hotline@bayareanewsgroup.com or call 408-920-5716
*** Follow me on Twitter: @WilnerHotline
*** Pac-12 Hotline is not endorsed or sponsored by the Pac-12 Conference, and the views expressed herein do not necessarily reflect the views of the Conference.
John Kosner Spoke with Eric Prisbell of On3 About the PAC-12 Conference’s Media Negotiations
Original Article: On3, by Eric Prisbell, February 23rd, 2023
While the appeal of its on-field inventory is debatable, the Pac-12’s media rights saga has all the ingredients of a must-see drama: A distressed league fighting for survival, Big Tech companies potentially reconfiguring a fragmented viewing paradigm and an inexperienced commissioner whose legacy largely hinges on securing a palatable deal.
Amid breathless speculation, an empty Pac-12 statement of unity and an interestingly timed story about another supposedly intrigued Big Tech partner, interviews with five prominent TV industry sources paint the picture of a weakened conference facing a pivotal decision: Maximize dollars or exposure?
“It’s a very interesting decision for them – they probably can’t do both,” Neal Pilson, the former president of CBS Sports, told On3 on Wednesday.
Debate has stirred for years over when deep-pocketed Big Tech titans would encroach on live sports media rights. That time is now. Amazon is building an ever-growing portfolio that includes spending $1 billion annually for the NFL’s Thursday night package and securing deals to showcase the WNBA, New York Yankees, Overtime Elite, the UEFA Champions League and more. And it may try to get a slice of the NBA when the league’s deal with ESPN/Turner Sports ends after the 2024-25 season. As one longtime TV source said, “I see Amazon specifically coming in for live sports. It is more than dabbling.” Apple TV+, meantime, has secured a 10-year, $2.5 billion deal for Major League Soccer games and is spending $85 million annually for Friday night MLB games.
But what the tech giants possess in dollars they lack in exposure – at least at this point. Yes, the landscape-shifting cord-cutting trend is continuing. Total pay TV subscriptions – cable and satellite – dropped by 6.3 percent in Q3 last year, showed data from research firm MoffettNathanson. More than 34 million homes exist entirely outside the cable network ecosystem; pay TV penetration is now roughly just 61 percent. And, yes, there are now more than 200 million Amazon Prime Video subscribers, including more than 150 million in the U.S. Apple TV+ has a much smaller market share (7 percent) and, as of last year, was estimated to have some 25 million paid subscribers
How much does exposure matter to the Pac-12?
If the Pac-12’s dilemma is whether to give the bulk of its best inventory to a streaming platform or a traditional linear network – assuming financials are comparable – the linear network still offers the best opportunity to maximize exposure. ESPN, for instance, would provide the Pac-12 significantly more visibility and, invariably, promote the bejesus out of the league throughout the fall. As Pilson said, “Rights-holders are beginning to realize that the timing still isn’t perfect for taking your full package off linear television.”
But that’s assuming the network offers the Pac-12 an attractive financial package. Pac-12 schools receive $21 million annually from their current deal with Fox and ESPN, which expires July 1, 2024. With a new deal, the hope is the league’s remaining 10 schools could receive an amount at least in the vicinity of $31.6 million annually. That is the figure Big 12 teams secured in the league’s latest rights deal, which accounts for stalwarts Texas and Oklahoma departing for the SEC and the conference replacing them with BYU, Cincinnati, Houston and BYU.
In a typical conference, TV executives say, the top three or four brands account for more than 50 percent of TV viewership. As one said, “The networks will pay you whatever you need them to pay you for top inventory. What they don’t want to do anymore is pay $9 million a game for Michigan-Ohio State and also pay $9 million a game for Rutgers-Maryland.” And without UCLA and especially USC, the Pac-12 is a shell of itself.
Regardless, the Pac-12 inventory would fill a much-needed, late-night broadcasting hole for ESPN. John Kosner, the former ESPN digital executive and the chief executive of the media consultancy Kosner Media, noted that ESPN has served college football fans for years with all-encompassing Saturdays, starting in the morning with College GameDay and ending late into the night with West Coast action. Heck, it even spawned a hashtag: #Pac12AfterDark
“They definitely want to maintain their late, West Coast, prime Saturday night windows,” Kosner told On3 on Tuesday. “Having their Big 12 renewal – at least with that conference’s current composition – is not enough. Look for ESPN to be part of the mix for the Pac-12.”
But at what price? Disney is laying off 7,000 employees and plans to cut $5.5 billion in costs; it’s uncertain how much of that will come from ESPN. And CEO Bob Iger said on an earnings call with analysts this month, in reference to sports media rights, “We’ve got some decisions that we have to make coming up – not anything particularly large, but on a few things – and we’re simply going to have to get more selective.”
Streaming vs. linear
Pilson said it would be a mistake for the Pac-12 to walk away from a linear network if its offer is comparable to that of a Big Tech company. With diminished exposure, the Pac-12 would risk becoming even less relevant than it is now. But Pilson stressed it is a matter of degree, adding that, ”If your linear offer is 80 percent your streaming offer, you go linear. If it’s 40 percent, now it is a lot more of a difficult choice.”
He doesn’t believe Apple or Amazon should be the Pac-12’s first choice. The only reason the Pac-12 should give the tech company the bulk of its inventory, he said, is if it can’t make an acceptable deal with a linear channel.
“You’re not talking about college kids; you’re talking about alumni and fans of the Pac-12 who are used to watching it on linear television,” Pilson said. “And they don’t know how to connect their large TVs to the Internet. They will be forced to watch on their laptops or their phones. And you’re going to see a significant decline in their total audience if they move their package principally to Apple or Amazon.”
Kosner said Apple might prefer a more comprehensive package than Amazon, but it’s important to keep in mind that its MLS deal left room for the league to put certain marquee games on Fox broadcast TV as well (not everything is exclusive to Apple). As for Amazon, Kosner said, it’s not clear that Amazon wants, or needs, all of the Pac-12’s football inventory – just the week’s best games. It is more likely, he said, that Amazon would team up with one or more linear broadcasters, most likely ESPN. And it’s important to keep in mind the potential market penetration for Amazon in the coming years and the rate at which that grows.
“Through Prime, Amazon will have distribution that rivals or exceeds broadcast during the course of a new deal,” Kosner said, “so it’s not as if the conference is turning its back on its fans. Sharing a deal with a top linear broadcaster could afford the conference the wider distribution it would be looking for in terms of recruiting and overall exposure.”
Amazon wants to fortify its live sports content business, and any decision to acquire Pac-12 rights makes sense “for the right price,” said a TV executive who has made mega-rights deals in recent years. “They can sell a lot of goods and services to the Pac-12 fan base. Getting Pac-12 games should not affect at all the NBA bidding rights. Amazon has enough money for both, and live sports is key to appointment viewing.”
How would a Pac-12 package benefit Amazon? Kosner said it would give the platform a Saturday night single-game or doubleheader opportunity for Power 5 football, which it could promote heavily on its Thursday night NFL broadcast. As for Apple, nestled in Silicon Valley, it has been a target of the Pac-12 since Larry Scott’s tenure as commissioner. The league, Kosner said, could provide an opportunity to create another comprehensive package similar to Apple’s MLS agreement. “Still,” he said, “it’s hard to imagine Apple taking all of that on beyond football and men’s and women’s basketball.”
Is expansion in the cards?
If the Pac-12 can’t enhance its inventory, the other question is whether it should create more of it. It is exploring adding at least two more schools, potentially San Diego State and SMU because of the southern California and Dallas markets, respectively. But neither school is a prime attraction even in its own region. The fundamental question is whether adding those schools would grow the pie enough to make expansion financially beneficial for the other 10 schools.
If it added both, each Pac-12 school would receive one-twelfth of the revenue instead of one-tenth. And TV sources said those additions are unlikely to motivate linear or tech companies to substantially bolster their offers. From a TV perspective, Pilson said, adding those two schools would be an “error.” He said, “I don’t think from the television point of view – whether it’s streaming, cable or network – (adding San Diego State and SMU) would make any difference at all.”
Another longtime TV source countered, pointing out that since future Pac-12 deals likely would be heavy with subscription-driven streaming platforms, possessing as much live inventory as possible is necessary. That’s what San Diego State and SMU provide. As they become competitive within the league, general interest would grow with them.
“People ask, ‘Why would the Pac-12 want SMU or San Diego State – they barely average 400,000 viewers (per football game)?’ ” he said. “Of course that’s all (while) playing average Group of 5 competition on ESPN2, ESPNU, FS1 and CBS Sports Network in time slots against multiple big games on major platforms. What do people think they should be averaging?
“The school will rise to the conference, not the other way around.”
What about Oregon and Washington?
Yet another concern for second-year Pac-12 commissioner George Kliavkoff is whether a deal – both in dollar amount and platform – will appease the wandering eyes at Oregon and Washington, both of whom could maintain aspirations to jump to greener (as in more dollars) pastures of the Big Ten. In August, the Big Ten finalized a seven-year rights deal with Fox, NBC and CBS worth a record $7 billion. It’s expected to pay about $70 million annually to each of the 16 schools.
Bob Thompson, the former Fox Sports Networks president, tweeted this week that “any movement by any Pac-12 team is going to be determined by their TV deal. If it is close to others, nobody is going anywhere for a few (dollars) more.” But he also has said that going all-in on streaming at this point is “not a good idea. Dip your toes in the water. … If they go 100 percent streaming, do schools move? Guess we’ll find out.”
At the end of a phone call with On3, Pilson reflected on how dramatically the media rights landscape has transformed since he entered the industry decades ago, when just three networks ruled the ecosystem and jousted over live sports rights.
“All you had to worry about were the other two guys – and it was still a very tough business,” Pilson said. “You had a third of the audience, and you were always worried and concerned that the other guys were going to take your property.
“We thought it was tough then. But it’s almost impossible now.”
“The NFL Makes It Look Easy, But It’s Not,” John Kosner’s Latest SBJ Column with Ed Desser
Original Article: Sports Business Journal, by Ed Desser and John Kosner, February 13th, 2023
Like the old Hollywood joke about a movie so good it directed itself, the NFL’s juggernaut appears effortless … like a Cowboys extra point. In reality, the league has been offering a best practices master class for decades. With the season just concluded, we examine their aggressive, state-of-the-art tactics to maintain and grow media audience, some of which can be emulated. Here’s our Pick Six:
1. The Game
“Quarterbacks are the most important players in sports,” according to Mike Mulvihill, Fox Sports’ executive vice president and head of strategy and analytics. Their preeminence “simplifies and personalizes a complicated game.” The NFL has embraced charismatic stars like Patrick Mahomes (the Steph Curry of the gridiron) who have opened up the sport, dramatically increasing scoring and the pace of the game, while attracting young fans. Tom Brady and Aaron Rodgers are synonymous with the position, but the eight NFL divisional playoff teams were all led by QBs under 30. The NFL markets these players; the rules protect them.
2. Expanding Core Content
In the 1970s, teams played six preseason and 14 consecutive regular-season games, with uniform Sunday 1 p.m./4 p.m. ET doubleheaders and a Monday night game (beginning on low-rated Labor Day weekend), eight teams made the playoffs, the Super Bowl took place on the second Sunday in January, and the (untelevised) draft was staged two weeks later in a hotel ballroom. Non-sellout games were blacked out in the home market, cold weather night games were minimized and the schedule rarely changed. Baseball was the top U.S. sport.
Today, NFL teams play three preseason games, 17 regular-season games over 18 weeks, with staggered starts for the Sunday tripleheaders at 1, 4:25 and 8:30 p.m. ET, plus four morning starts from Europe, prime-time games Monday and Thursday (the season beginning after Labor Day); 14 teams make the playoffs with later start times, the Super Bowl is now on the second Sunday in February, and the draft is a late April, three-day/night traveling spectacle, dissected by three networks, attended by 100,000+. Local blackouts are long gone, every market (including those with a home game) now gets three Sunday afternoon broadcast games (a fourth on the opening and closing weeks), and next season will bring flexible scheduling to both Sunday and Monday nights. The NFL has no peer on U.S. television.
The NFL not only maximized its season (adding few net average additional games beyond those from expansion teams) but also its January/February extension capitalizes on high cold weather HUT (homes using television) levels and routinely frigid night games. Ever opportunistic, the NFL found valuable new promotable opportunities — “Super Wild Card Weekend,” which captures the Martin Luther King Jr. holiday, tripleheaders on Thanksgiving and last year, Christmas Day, with a Black Friday game for Amazon Prime upcoming.
3. Moving to a Year-Round Presence
In addition to its scheduling maneuvers, the NFL has forged a year-round content calendar with its combine and free agency signings in March, the draft in April, the NFL schedule release in May, training camps in July and the preseason in August.
4. Content Innovations
As NFL Films is the granddaddy of in-house sports production, it’s fitting that the NFL has become its own executive producer with NFL Network, NFL.com, premium app NFL+, and NFL RedZone, which revolutionized live sports coverage. It has also redefined access with “Hard Knocks,” highlights with “Inside the NFL” and even has its own daily show, “Good Morning Football.”
SkyCam technology over the years has changed the way NFL games are produced.GETTY IMAGES
5. Maintaining Multiple Media Relationships
In the 1970s, before cable and streaming, all three broadcast networks held NFL rights. Today, the NFL has agreements with all four broadcast networks, the leading national cable sports network, plus huge digital companies Amazon and Google/YouTube, plus Apple is the new sponsor of Super Bowl halftime. Each of the media partners is deeply invested in the NFL, contractually mandated to aggressively promote, and by design encouraged to outdo one another. ESPN’s popular “ManningCast” is an example, as are a set of tech innovations such as “1st & Ten” and SkyCam. Plus, the NFL negotiated itself an early opt-out in these deals. In this dire media environment, its numbers defy gravity:
Per Variety, in 2022, NFL games represented 75% of all sports telecasts that reached 10 million or more viewers last year (figures achieved because the NFL has embraced both broadcast and streaming);
Per The Wall Street Journal, the league has boosted the rights fees for all of its media properties by more than $100 billion in less than three years.
6. Continuously Raising the Bar
No “prevent defense” here. The NFL has had excellent senior media leadership from Steve Bornstein and Howard Katz to Brian Rolapp.
The league commissioned fan research in 2016 resulting in several changes that streamlined game broadcasts, including fewer commercial breaks and advertisements now inserted into dead spots, like instant replay reviews.
They’ve upgraded both markets and venues — Las Vegas and Los Angeles, with state-of-the-art Allegiant and SoFi stadiums.
But traditions live on. In the 1970s, the league marketed “On Any Given Sunday,” trumpeting the competitiveness of its then 26 teams. In 2022, the NFL’s 32 teams played a season with an average victory margin less than 10 points, the lowest in 90 years.
Befitting of a 21st century sport behemoth, the NFL has embraced its own weekly spectacle, where the regular season truly matters. And, of course, everyone watches the Super Bowl (some for the commercials). Some things never change.
Ed Desser is an expert witness and president of Desser Sports Media Inc. (www.desser.tv). John Kosner is president of consultancy Kosner Media (www.kosnermedia.com). Together they developed league TV strategy and ran the NBA’s media operations in the ’80s and ’90s, always with an eye on the NFL.
Questions about OPED guidelines or letters to the editor? Email editor Jake Kyler at jkyler@sportsbusinessjournal.com