The New Dilemma in Sports Media. John Kosner’s Latest SBJ Column With Ed Desser
Original Article: Sports Business Journal, by John Kosner and Ed Desser, March 25th, 2024
For rights owners, negotiating sports media agreements was never easy, but it was straightforward, pre-COVID:
Estimate rights for fair market value.
Identify at least two interested linear networks with capacity.
Determine which will provide the best consideration package, optimal schedule and quality production.
Negotiate and close.
If shelf space existed and the money was right, the sport would get both the largest potential audience on established platforms and revenue, reaching substantially all sports fans. Plus, since almost everyone (100 million homes) subscribed to cable TV,non-sports fans essentially subsidized fans and sports programming seemed practically free. Live sports emerged as the most attractive, valuable form of entertainment, becoming the linchpin of the cable bundle/sports marriage. Here are a few things to keep in mind:
Today, sports retains its unique competitive advantages, but it’s hard to recognize the media business:
Just about 40% of homes still subscribe to most linear cable sports networks, and RSN re-tiering is lowering that while further increasing fan costs.
Cable affiliate revenue is declining. Lost revenue from disconnects now exceeds the price increases networks and distributors can pass on to remaining subscribers — shrinking network margins and the available funds to pay for sports.
While broadcast stations can technically reach all homes in a market, just two-thirds of viewers actually have access (15% via antennas). Students recently told John that they thought they had to subscribe to Paramount+ to watch a recent NFL playoff game.
Typical linear network audiences are a small fraction of before. Shockingly, the average combined four-network 18-49 adult prime-time entertainment audience is down to just 1.6 rating points (from mid-40s) — a mere 0.4 per network!
Thus, these once-mighty linear channels no longer provide the large, assured audiences, lead-ins, and promotional value for sports they did a decade ago.
Meanwhile, streaming services, social media platforms and video games each generate more total screen time than all linear TV networks combined.
The viewing habits of those under 30 do not resemble their elders. Most simply don’t watch linear network programming, let alone full games, with the same frequency. It’s the first generation watching pirated sports feeds.
Input A is now Input B. Most viewers’ default video programming setting is streaming, not “live” linear TV. New strategies are needed to engage younger fans.
Today, every event, on every network, competes for audience not just against each other (like the “old” days) but also against every viewer’s highly curated, and practically unlimited, SVOD favorites list of movies and TV shows, culled from deep libraries of all content ever produced. Younger audiences also choose from an endless supply of free, ad-supported short-form videos on social media networks, YouTube, a host of video games or play uncapped in free virtual worlds like Fortnite or Roblox. Even top-tier sports struggle to draw large audiences across attractive demographics to generate growing media rights value in this unprecedented, hyper-competitive environment. Indeed, only the weekly ritual of fall football appears safe — so far!
To grow revenue and fan bases, all sports media properties must think differently:
If you’re not a top dog (SBJ, Jan. 29, 2024), look out! Expect your media model and rights revenues to be challenged.
Just licensing your events to a linear network alone, and hoping to attract a large fandom, is unrealistic and no longer a viable strategy. A single vanilla feed is unlikely to satisfy an increasingly diverse fan base. Instead, you will need multiple platforms and a variety of targeted products.
Researching your fan base is a must. (not just relying on Nielsen or syndicated services). Do a SWOT analysis on your media business. How many are willing to pay for your content? How much are sponsors willing to support you? How and where do your viewers spend their time? How do they define fandom? Do they bet on your sport? Where are your new opportunities?
Multiple media relationships/platforms will become the norm. “All means and media hereafter developed” grants are mostly behind us. Options are proliferating: linear (broadcast and/or cable), subscription, 4K, FAST channels, channel stores, viewing parties, social, gaming/gambling/sub-second latency, short-form/highlights, radio/podcasting/audio, data products, merch and collectibles, even super-high-resolution “back to the future” closed circuit.
Shorter-term agreements are in. The NFL deals run through 2033 but the league has an out after 2029. The 10-year WWE agreement includes both a five-year out and 10-year extension for Netflix. The NCAA “other” championships deal is now eight years, down from the previous 12, smartly co-terminus with the men’s basketball championship. Leverage has its benefits.
What is your direct-to-consumer model? Even if you don’t want to go it alone, it’s critical to know what pricing and revenues are possible, and how much it would cost to operate. Have a production, sales, and fulfillment plan in place, should it be needed. Some small properties have surprisingly sizable DTC audiences. This knowledge is a useful backstop for negotiations.
Change is already underway:
This is the second season of MLS’s exclusive deal with Apple.
The Suns/Golden Knights/Jazz have moved their games from RSNs to OTA and DTC.
NASCAR once had two media packages; now it has five.
ESPN/Fox/WBD announced a new sports streaming joint venture.
The CFP is expanding to 12 … or is it 14 schools?
Seismic change has hit the sports media world. We’re not going back. Be prepared for a variety of alternatives, some incremental, which may look quite different. For licensors, there are new buyers, but their priorities might be different. In an era of increasing tumult, it’s always wise to plan ahead.
Ed Desser is president of consultancy 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.
John Kosner Spoke with Mike McCarthy of Front Office Sports About Caitlin Clark’s Potential Impact on WNBA Media Negotiations
Original Article: Front Office Sports, by Mike McCarthy, March 19th, 2024
A wild card has emerged in the multibillion-dollar negotiations for NBA media rights: the WNBA.
The NBA and WNBA are jointly negotiating an extension of their current media-rights deals with the Walt Disney Co.’s ABC and ESPN. But the WNBA’s media rights are rising in value as Iowa’s Caitlin Clark prepares to join the league—and women’s sports reach new levels of popularity.
The WNBA believes its media rights are undervalued. If the league doesn’t get what it wants jointly from ABC and ESPN, it’s quite likely to negotiate its own separate deal, say sources close to the negotiations—either with Disney or a competitor. Possible packages and proposals are flying back and forth between the two sides, sources tell Front Office Sports, and the WNBA is open to anything. The goal is to maximize the league’s reach and market value.
The WNBA declined to comment for this story.
The WNBA currently earns about $60 million annually from its TV and streaming deals with ABC-ESPN, Amazon Prime Video, CBS, and ION. With excitement building around Clark and women’s March Madness, the league will try to push its annual media-rights payout to between $80 million and $100 million, predicts former ESPN executive John Kosner. ABC-ESPN generates about two-thirds of the WNBA’s annual rights revenue on a deal that will, like the NBA’s, expire after the 2024–’25 season.
“You can’t miss all of the attention the 2024 [NCAA] women’s championship is receiving and ESPN’s strong ad sales efforts against it. All of this inures to the benefit of the WNBA’s media rights,” says the former ESPN executive turned founder of Kosner Media. “Caitlin Clark is that most unusual athlete who brings fans to the sport for the first time. Far more people will tune in to the WNBA this summer, and they’ll discover the wealth of talent in the women’s game.”
The WNBA just posted its most-watched season in 21 years, averaging 462,000 viewers per game across national TV partners ABC, ESPN, ESPN2, and CBS—up 21% over last year. On ABC alone, regular-season games averaged 627,000 viewers. The league also had its most-watched WNBA Finals in 20 years, averaging 728,000 viewers per game—a 36% year-over-year increase. As far as the live gate, the league’s average attendance rose 16% to 6,615 fans per game, the highest figure since 2018.
The rising tide of women’s sports is lifting all boats—or at least many. For the first time, Fox Sports averaged more viewers this season for women’s college basketball than men’s college hoops. Iowa’s stirring comeback OT victory over Nebraska grabbed more than 3 million viewers, making it the most-watched women’s college basketball game on CBS in 25 years. So-called “women’s elite sports” are projected to generate more than $1 billion in revenue for the first time in 2024, according to Deloitte.
Donna Orender, the former WNBA commissioner, expects a “significant increase” in WNBA rights as Clark enters the league—almost certainly as the No. 1 pick of the Indiana Fever at the league’s draft in New York City on April 15.
“The No. 1 driver of [TV] ratings points right now happens to be Caitlin Clark,” Orender tells FOS. “And her first game in the WNBA will be this spring. Her fans are going to follow. The WNBA’s fans continue to grow. It’s that convergence point that’s really moving things forward.”
The National Women’s Soccer League just set the record for the largest media-rights deal in women’s sports history via its $240 million deal with ESPN, CBS, Amazon, and Scripps Sports. The four-year deal will pay NWSL about $60 million a year—or 40 times what the previous deal did. That landmark pact bodes well for the WNBA as it nears tip-off of its 2024–’25 season May 14, according to Orender.
“These rights have been depressed, or suppressed, for quite a long time. But it’s always a question of buyer and seller. Everyone’s always trying to get their best price,” she says. “But I think there is a recognized increase in value across the board for women’s sports. And I think that’s going to be represented in the new rights fees that will be paid.”
Orender has a point. There’s an argument that the WNBA’s media rights are undervalued vis-a-vis men’s sports leagues. Take the NHL, which is in the second season of twin seven-year deals with ESPN and TNT. The NHL pockets a combined $625 million annually from ESPN and TNT—more than 10 times that of the WNBA’s current payout. But the WNBA’s average national viewership of 462,000 across ABC, ESPN, ESPN2, and CBS last season nearly equaled the 474,000 for the league’s regular season on ESPN on TNT last season. WNBA fans also tend to be younger and more diverse, making them more attractive to advertisers.
The NBA is currently in a 45-day exclusive negotiating period with ABC-ESPN and TNT for new long-term agreements. The league will seek up to $75 billion for its next long-term media rights, according to CNBC. That would more than double the combined $24 billion from its twin nine-year deals through the 2025 season.
Here’s the problem for ESPN and TNT. Once ESPN’s exclusive negotiating period ends April 22, NBA Commissioner Adam Silver is expected to throw open the bidding to Amazon, Apple, and former TV partner NBC Sports. Amazon is looking to replicate its success with the NFL’s Thursday Night Football by devoting a night to the NBA. The NBA, meanwhile, is looking to bring back the magic of the Michael Jordan/Chicago Bulls glory days in the 1990s. Losing the NBA would be a serious blow for ESPN and TNT as they try to launch their as-yet-unnamed streaming service, nicknamed “Spulu,” with partner Fox this fall.
John Kosner Spoke with Eric Prisbell of On3 About NCAA Women’s Basketball Championship TV Ratings
Original Article: On3, by Eric Prisbell, March 18th, 2024
Examine the NCAA men’s and women’s tournament brackets, envision dream matchups in the Final Four and consider something that has never before been remotely in play:
The women’s NCAA Tournament is the main attraction.
From South Carolina’s undefeated season and LSU’s quest to repeat as national champion to Caitlin Clark’s irrepressible offensive repertoire, the women’s bracket has monopolized the most compelling storylines. From Angel Reese and JuJu Watkins to Clark, it features a bevy of recognizable faces much like the men’s game did a generation ago.
This is Clark’s last dance. But now that the game is super-charged by more promotion across more platforms, this popularity surge could be more than a mere “One Shining Moment” for women’s hoops. The women’s game isn’t just having its moment.
“I think it is sustainable,” Neal Pilson, who served two stints as CBS Sports president in the 1980s and 90s as its coveted NCAA men’s tournament surged in popularity, told On3. “Women’s sports and the TV networks have finally seized on the promotion value of the athletes similar to how the NBA features its stars when promoting key games – ‘Lebron v. Steph,’ for example.
“Such promotion is very effective with the viewers.”
Ahead for the men’s tournament could well be an enticing buffet of captivating early upsets – likely more than in the women’s bracket – unexpected heroes and thrilling buzzer-beaters. But at least for this season, there’s no denying that the dearth of familiar men’s faces – other than Purdue’s Zach Edey – means the connective tissue between fans and the game is weaker.
Caitlin Clark is transcendent star in rare air
Meantime, the women’s event has a once-in-a-generation talent in Clark, the undisputed face of all of college hoops.
Amid the women’s tournament’s rise in appeal over the last several years, it has “broken through to a new level because of the phenomenon” of Clark, John Kosner, who led digital media at ESPN from 2003-2017 and is president of media consulting firm Kosner Media, told On3.
“She is that most unusual of athletes who brings fans who might not care about the sport to watch,” Kosner said. “In my lifetime, that’s a short, short list – including Muhammad Ali, Michael Jordan and Tiger Woods.”
With the possibility of Clark starring in the national championship game on ABC, with the men’s game broadcast on TBS, could the women’s final rival the men’s in viewership?
If Clark reaches the championship, Kosner expects that rating to match that of the NCAA men’s championship on TBS, adding, “I believe it would exceed the men’s if ABC was carrying the game in prime time – like the men’s – and not at 3 p.m. ET.”
Last year’s LSU-Iowa women’s championship garnered 9.9 million viewers, making it the most-watched women’s game ever. The UConn–San Diego State men’s final attracted 14.69 million, making it the least-watched men’s championship in recorded history.
Because of the perpetual promotional build-up for the men’s final throughout the tournament, Pilson still believes the men’s final will outrate the women’s by a “substantial margin.” But he noted we could still see a record rating for the women’s final with Clark or LSU matched against unbeaten South Carolina in the championship.
Brands well aware of Caitlin Clark’s broad appeal
Clark is a jaw-dropping sensation. Former NBA player Tim Legler said last week on “The Tony Kornheiser Show” that Clark is one of the five most entertaining basketball players he has ever watched at any level.
“She is must-see TV,” Legler said. “I never thought we’d ever see a women’s player shoot the basketball from the shooting distances she’s shooting it. And you can make an argument that her range, relative to her game, her sport, is better than even Steph Curry’s range.”
Brands are well aware that her appeal transcends the traditional sports audience.
The Iowa star has the top-ranked women’s basketball On3 NIL Valuation at $3.1 million. The valuation trails just Bronny James, Shedeur Sanders and Livvy Dunne. With 1.4 million social media followers, Clark has endorsement deals with State Farm, Nike and Gatorade among others.
According to a recent report, Clark’s State Farm ads are 46% more likely to generate engagement than other State Farm ads.
More broadly, Brand marketing expert Kyle Christensen – the chief marketing officer at Splash – said the difference in brand interest in the women’s tournament five years ago to now is like the difference between “midnight and noon on a sunny day.”
How high is that interest this March?
“As an advertiser,” Christensen said, “you’d be a fool if you plan to show up on the men’s side and not show up on the women’s side.”
Christensen said some male-targeted brands should absolutely explore spending in women’s college basketball. And he believes Pepsi and DraftKings missed an opportunity with its recent announcement on a creative “Zero Right Bracket Challenge.”
Why not take the idea and leverage it on the women’s side, rather than only the men’s side?
Women’s game deprived of ‘spotlight’ it has deserved
As Christensen and others stress, we don’t yet know the ceiling on the popularity of the NCAA women’s tournament. It is only now that it is being showcased and promoted and super-charged with the resources necessary to see it thrive.
It was only three years ago several athletes – led by former Oregon women’s basketball player Sedona Prince – took to social media to demonstrate the inequality between weight rooms, food and other amenities provided by the NCAA to athletes during the men’s and women’s basketball tournaments.
A report prepared by Roberta A. Kaplan and her law firm found that the organization’s “broadcast agreements, corporate sponsorship contracts, distribution of revenue, organizational structure and culture all prioritize Division I men’s basketball over everything else in ways that create, normalize and perpetuate gender inequities.” Kosner and fellow media consultant Ed Desser provided analysis for the Kaplan report.
The NCAA has since addressed many of the inequities with branding and resources. It also recently secured an eight-year, $920 million rights deal with ESPN for 40 championships, including the women’s tournament. And it is engaged in discussions, albeit belatedly, regarding awarding financial units to schools in the women’s tournament.
Now the event is thriving. Its stars and storylines are promoted, highlighted and showcased. At least for this year, the women’s tournament takes center stage.
“It hasn’t been given the spotlight it has deserved over time,” Christensen said. “It’s the dawning of a new day.”
John Kosner Spoke to Jessica Toonkel of The Wall Street Journal About LeBron James’ Production Company SpringHill
Original Article: The Wall Street Journal, by Jessica Toonkel, February 15th, 2024
LeBron James is particular about his facial hygiene. He favors a Neutrogena pink-grapefruit wash.
“I love it, I love it, I love it,” the NBA superstar says.
James, 39 years old, also loves the business potential. His company, SpringHill, is launching its own rival face wash in a men’s grooming line—part of a major expansion of his burgeoning business empire in the twilight of his career.
“I told them I want this face wash to resemble that,” James said, “because I love how the crystals make your face feel super-washed.”
Almost a decade ago, James helped create a new kind of company: one built around the personality of a sports superstar who can talk directly to millions of fans on social media. Entertainment was the primary focus. SpringHill has made movies like Adam Sandler’s “Hustle” and “Space Jam: A New Legacy,” and TV series like NBC’s game show “The Wall” and the barbershop talk show “The Shop.”
Now James and his longtime business partner, Maverick Carter, have a dizzying list of expansion ideas. Beyond the grooming line, SpringHill is making plans to expand internationally, with an eye on Western Europe, the U.K. and possibly Japan and Africa. The company is planning to bring a version of “The Shop” to the U.K., hosted and executive-produced by British actor Idris Elba. SpringHill is discussing launching a free, ad-supported streaming channel, and is hunting for acquisitions, with a particular focus on videogames and animation.
Success isn’t a slam dunk. Building a consumer-product brand is notoriously difficult, and in entertainment, SpringHill is competing with a crowd of companies that have similar ambitions, while a new era of austerity in Hollywood is clouding the prospects for production deals.
James, sitting in an airport hangar one December afternoon and awaiting a Los Angeles Lakers team flight, said he’s always wanted to excel in more than one area—basketball fans know him as not just a dominant scorer, but an elite passer, rebounder and defender. “I have always felt like I was a Swiss Army knife,” says James.
He extends the analogy to the expansion of SpringHill into new lines of business. “We couldn’t just be a wine opener,” he says, “We wanted also to be a pair of scissors and a fingernail clipper.”
In its production business, SpringHill is trying its hand at a new format: a reality series following five National Basketball Association players, including James, through the season. The show is destined for Netflix.
SpringHill is looking to expand at a time when many streamers and advertisers are pulling back on spending, posing potential challenges for the company. The corporate owners of streaming services like Disney+, Peacock and Paramount+ are looking to burnish their balance sheets by culling their output and being more selective about which projects to pursue. SpringHill, like any creator in show business, could feel that pressure as it tries to sell programming in the coming years
“Many of the potential buyers for content and acquirers for their company are themselves in financial distress,” said John Kosner, a former ESPN executive who now runs his own media-consulting company.
SpringHill is competing with a number of production companies that are pitching sports content to the likes of Netflix, Amazon and Apple. Skydance Media, the company behind such hit movies as “Top Gun: Maverick,” and several “Mission: Impossible” titles, teamed up with the National Football League in 2022 to create sports-related content. “When you dig into leagues, athletes and the history of games themselves, it has been an untapped treasure trove with stories that haven’t been told,” said Skydance Chief Executive David Ellison in an interview last fall.
SpringHill is trying to distinguish itself with scripted content but hasn’t had many breakthroughs. It is in early development with Brad Pitt’s production company on a new show about sports agents that will be similar to Netflix’s popular show “Call My Agent,” according to people familiar with the situation. Some media investors who have looked at SpringHill question whether it is worth the $725 million valuation it was given when it raised money in late 2021—at the peak of the streaming-video boom.
Investors who did put money into SpringHill are optimistic, in part because it is stretching beyond the uncertain business of producing hits in Hollywood.
“Hits can be consumer products, a touring live show, partnerships with Fortune 100 brands, as well as TV and film projects,” said Jason Stein, founder and managing partner of SC Holdings, an investor in SpringHill and adviser to the company. “By design, SpringHill is not focused exclusively on hits in the traditional sense.”
‘Company Builders’
James ignited a movement in the sports world. Kevin Durant, Megan Rapinoe and Naomi Osaka are among the many other athletes that have launched media companies, hoping to control their own narrative, make a cultural impact and build a real business.
The list of such outfits keeps growing. The NBA’s Giannis Antetokounmpo in January announced a new production company, Improbable Media, whose first offering is a documentary about his rise for Amazon’s Prime Video.
It’s not only superstars: JJ Redick, a successful NBA role player, has launched his own firm built around podcasts like “The Old Man and the Three.” Pat McAfee parlayed a career as an NFL punter—not exactly the most glamorous of positions—into a successful YouTube show, building a company that now licenses its programming to Disney’s ESPN.
“There are a lot of people saying ‘Why am I not doing it if LeBron is?’ ” said Paul Wachter, CEO of Main Street Advisors, a SpringHill investor who has been an adviser to James since 2005.
Omaha Productions, the entertainment company started by former NFL star Peyton Manning, has gained significant traction—not just because its series “Quarterback” became a Netflix hit last year, but because it is intent on developing a robust pipeline.
“You don’t want to be a one-trick pony in this business,” said David Nevins, a former head of Paramount’s Showtime, who is now CEO of North Road, which has a stake in Omaha. Having your company attached to a famous athlete only gets you so far, he said. “It’s the smart company builders that will win,” Nevins said, adding that Manning is one of those executives.
SpringHill is the most mature, and the most diversified of the bunch—with lines of business that include advising brands on strategy and creating content for advertisers like Nike. The majority of SpringHill’s roughly $200 million in revenue comes from its studio business and advertisers hiring the company to create sponsored short videos meant to be shared on social media. For example, Toyota hired the company to create a short video about the importance of historically Black colleges and universities, starring former NBA player J.R. Smith.
When visitors enter SpringHill offices in Los Angeles, they are greeted with a neon sign saying, “I Am More Than an Athlete.” It’s dawning on more companies—from media to sportswear to luxury goods—that athletes can have a much bigger footprint in the business world than just starring in ads and movies, Carter said.
There’s a long history of athletes forging lucrative careers in business: Magic Johnson became a billionaire not as a former Lakers star, but through investments in an insurance company, movie theaters and sports franchises, among other areas. Now social media has allowed athletes to develop a deeper connection with consumers, giving them even greater opportunities, Carter said.
“Talent and creators—and I am putting athletes in that bucket—mean more to consumers now because they have the technology to speak directly to them,” Carter said.
SpringHill invests in and helps to grow other athletes’ production companies, including tennis star Osaka’s Hana Kuma, which recently spun off from SpringHill, and Miniature Géant Studio, started by NBA superstar Joel Embiid.
‘The Decision’
James, the NBA’s all-time leading scorer and the league’s oldest player, was in a playful mood last year on the morning after a Lakers win. As he waited for his flight in December, he was icing his knees and joking with teammates barely half his age about videogames and their attire. “You look like you are going to Bermuda,” he said to Anthony Davis, who was sporting tropical shorts.
James saw a need for athletes to tell their own stories before many of his current teammates were in the NBA.
The turning point came when James and Carter got panned by the press and fans for “The Decision,” a live ESPN broadcast in 2010 in which James announced he was leaving his hometown team, the Cleveland Cavaliers, to join the Miami Heat.
That was one of the reasons that led to James and Carter to launch “Uninterrupted,” a website designed to enable athletes to speak directly to fans that was one of several companies that were combined to make up SpringHill.
Carter, who has known James since they were kids in Akron, Ohio, was working in marketing at Nike before going to work with his longtime friend in 2005. His office at SpringHill’s headquarters reflects his eclectic interests, with books ranging from “The Pininfarina Book,” filled with photography from the Italian design firm, to “A Time Before Crack,” another photography book about New York City in the 1980s.
Carter studied Disney’s business plan when launching SpringHill. His mentors include Walt Disney CEO Bob Iger, Verizon CEO Hans Vestberg and former American Express CEO Ken Chenault.
Many of SpringHIll’s early projects have origins in James’s upbringing. For example, he was a big fan of game shows growing up, and was at the 9 a.m. pitch meeting with NBCUniversal for “The Wall,” in which contestants have the opportunity to win millions of dollars. NBCUniversal just renewed the show for a sixth season.
“The Shop,” a talk show that takes place in a barbershop, was inspired by James’s and Carter’s youth. “I didn’t grow up reading newspapers. I wasn’t fortunate enough to be in a library so you gained a lot of your information and intel of things in the world of the barbershop,” James said. “You can be unfiltered.”
The show, which has featured such guests as former President Barack Obama, football legend Tom Brady and singer Drake, is now on YouTube after airing for the first five seasons on HBO.
SpringHill’s upcoming men’s grooming line is named for his show “The Shop,” which spawned the idea, Carter said. James recalls that when he used to visit the neighborhood barbershop as a kid, you could get everything from incense to beard oil to hair gel, and envisioned something similar with the grooming line.
James has been involved in product development—he participated in focus groups of male employees at SpringHill discussing their grooming routines. When it came to face wash, he wanted his beloved Neutrogena product to be a model.
The challenges for the grooming line, which is to be sold exclusively through Walmart, will include competing against consumer-product giants with deeper pockets and longtime connections to large retailers, and persuading more men to use such products in the first place.
Basketball’s ‘Hard Knocks’
Every summer for years, James and Carter have gone on vacation together with their families on a yacht in the Mediterranean Sea. A question would pop up: Why aren’t we doing our own version of HBO’s “Hard Knocks”? It was a frequent conversation.
James, a lover of all things football, is a huge fan of the HBO show, which each year follows a different NFL team’s preseason training camp. When “Quarterback” became a big hit for Netflix, James saw an opportunity to press forward with a similar basketball show.
Getting the NBA to sign on was step 1. SpringHill had been cultivating its ties with the league for years. It cast a number of NBA players in “Hustle,” which helped build trust between the two sides. After the NBA and Netflix signed up for the idea of an NBA reality series, it was time to find the players.
James was interested in participating, but he had one key question: How would this affect a documentary of his life if he decides to do that someday? “It’s the only question he cares about,” Carter said.
Carter told him not to worry—the show wouldn’t preclude a documentary spanning his career. The NBA series, which will also feature Jayson Tatum, Jimmy Butler, Domantas Sabonis and Anthony Edwards, is being made in partnership with Omaha Productions and the Obamas’ Higher Ground Productions.
James has been featured in TV shows and films including Judd Apatow’s “Trainwreck,” with Amy Schumer. He surprised many on that movie’s set with his deadpan delivery of lyrics from the song “Gold Digger,” offered as relationship advice for a pal played by Bill Hader.
James hopes to be more involved in the creative side of SpringHill when he retires. He says he would love to do a docuseries with his son Bronny, who plays for University of Southern California.
He also would like to do more acting.
“The next movie I want to do is a rom-com,” he said.
John Kosner Spoke with Mike McCarthy of Front Office Sports About Sports Rightsholder Streaming Concerns
Original Article: Front Office Sports, by Mike McCarthy, February 9th, 2024
LAS VEGAS — ESPN, Warner Bros. Discovery and Fox Corp. may have overlooked some key stakeholders with their ambitious plans for a combined streaming service. Namely: the powerful sports leagues to whom they pay billions in media rights fees.
In Vegas for the Super Bowl, where seemingly all of the media world is amassed, I’m hearing that the leagues went on red alert as soon as the three media conglomerates announced the multisport streaming service Tuesday. The notion: They’re suspicious that the members of the unnamed streamer collective will eventually try to bid for live-game rights as a combined entity, likely reducing the total media rights fees paid out to the leagues.
The new math in sports media is that the more media partners leagues have, the higher the total rights payouts they reap. The NFL, for example, will pull in $110 billion in media rights fees through 2033 across its deals with ESPN, Fox, CBS, NBC, and Amazon Prime Video. Throw in the league’s seven-year deal with YouTube for Sunday Ticket and that’s another $14 billion in the NFL’s pockets.
And other pro leagues are closely following the NFL playbook. That’s why the NHL switched to two national media partners, ESPN and TNT, receiving a combined $625 million per year. With one media partner, NBC—albeit years earlier, in 2011—they collected $200 million per year.
With the NBA’s media rights expiring after the 2024–’25 season, look for The Association to double its media partnership from two to four, say my sources. Incumbents ESPN and TNT could be joined by Amazon Prime Video and NBC, a former media partner. The goal, as always, is to maximize rights fee by signing multiple partners.
For their part, the three companies involved in the joint-venture agreement maintain that they will continue to negotiate and acquire their respective sports rights independently. Let’s take them at their word. But things could change down the road. It’s still a legit concern for rights holders, warns John Kosner, a former NBA and ESPN executive turned media consultant. “Anything that potentially cuts down on the number of competitors bidding on sports rights is going to be, by definition, a significant concern to sports rights holders. It has to be,” Kosner tells Front Office Sports.
Adding to the suspicion: The leagues were “blindsided” by Tuesday’s blockbuster morning announcement, according to The Wall Street Journal. Sports leagues like to be briefed in advance about any shifts in business strategy. Apparently that didn’t happen this week.
“An effort to notify the leagues wasn’t made until Tuesday, before a planned announcement. Many learned of it when The Wall Street Journal broke the news,” the Journal reported. “The reason for the cone of silence was to keep the plans from leaking prematurely during the months the companies were settling the details, people involved in the partnership said.”
With the dust settling, two days later, leagues are still looking for answers on what this thing is, when it will launch, who will run it, and, most importantly, how it will impact them. Until then, they’re playing catchup.
“While we look forward to learning more about this new venture,” an NBA spokeswoman tells FOS, “we’re encouraged by the opportunity to make premier sports content more accessible to fans who are not subscribers to the traditional cable or satellite bundle.”
John Kosner Spoke with Rachelle Akuffo & Akiko Fujita of Yahoo Finance About Sports Streaming
Original Article: Yahoo Finance, by Rachelle Akuffo and Akiko Fujita, February 8th, 2024
The Walt Disney Company's (DIS) recent announcement of joint venture sports streaming service with Fox (FOX, FOXA) and Warner Bros. Discovery (WBD) dominated the company's latest earnings call. Kosner Media President John Kosner — who was also the former EVP of Digital & Print Media at ESPN — joined Yahoo Finance Live to discuss why this move benefits Disney and satisfies sports fans who "really want a bundle."
Kosner notes this push away from the traditional linear TV packages is "part of the evolution of the business." Although threatening cable, Kosner argues "there are a lot of people who still want to get their channels in a traditional way."
However, Disney now has to persuade consumers why they should "want this" bundle over cable since offerings like news channels are not included.
For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.
Editor's note: This article was written by Angel Smith
Video Transcript
RACHELLE AKUFFO: Well, the word sports was mentioned in Disney's first quarter earnings call 50 times. As the company managed to trim its losses in its streaming division, it now looks to solidify its place in the sports world. Announcing that its full suite of standalone ESPN channels will be available in the fall of 2025.
Now this comes after revealing a partnership with Warner Bros. Discovery and Fox for a sports streaming platform. Joining us now on this is John Kosner, Kosner Media President and former ESPN Executive Vice President of digital and print media. Thank you for joining us this morning.
So let's start by talking about the landscape that Disney is setting up here, because with this streaming deal, this will be the first time that you have your cord cutters and those who are loyal to cable will now have an alternative that really bridges both of them outside of the traditional cable bundle.
JOHN KOSNER: Yes, and the fans really want a bundle. I have a friend who's a big fan of the Arsenal Football Club who told me that he has to subscribe to seven different services to see every game. So the movement-- Disney announced two things yesterday. The movement to do the JV with Fox and Warner Bros. Discovery really addresses a consumer demand for better bundling.
They also announced, Rachelle, as you said, that they're going to launch their flagship service, a standalone ESPN streaming service in fall of 2025. So these moves reflect sports fan demand. And it's just part of the evolution of the business away from the traditional pay television bundle.
AKIKO FUJITA: John, how significant is the risk for cannibalization? I mean, the argument for very long has been that the only reason cable has gone this long or has been able to survive this long is because of sports. If you've got alternatives out there like the bundle, like ESPN streaming service that allow you to view that, what is the case for keeping cable around?
JOHN KOSNER: Well, there are lots of people who still want to get their channels in a traditional way, combining entertainment and news. The challenges for the new JV is going to be explaining to fans why they want this versus what they could get as a combination of channels.
As we know, at least today, NBC is not part of this. CBS is not part of this. We don't know yet who's running the JV. We don't really have any details yet about the product around the JV. So there are a lot of questions there. And clearly, Lachlan Murdoch said this, they want to target those who are outside the system. So, there is risk to cannibalization of existing pay-TV subscribers. But the promise that this could be better and more focused for fans has the probability of bringing other people into the mix.
Are All Sports Rights Fees Flattening? John Kosner’s Latest SBJ Column With Ed Desser
Original Article: Sports Business Journal, by John Kosner and Ed Desser, January 29th, 2024
Throughout our careers, premium sports properties have resembled growth stocks: rights fees headed skyward at double-digit rates. Sports perfectly exploited pay TV’s dual-revenue-stream-powered boom. National broadcast network deals grew, supported by station retransmission consent fees; powerhouse cable networks developed, propelled by affiliate revenue. Meanwhile, local pro team agreements drove near-ubiquitous distribution of RSNs. Sports advertising’s rising tide lifted all boats.
As we chronicled (SBJ, Dec. 11, 2023), the industry has entered a daunting new frontier. Recently, the Premier League, WWE, and NASCAR announced media deals more in line with inflation than growing at the previously hyper-inflationary levels.
Are all rights fees flattening, including for big bellwethers? We think not.
There are several factors influencing rights fees (and we mean cash rights fees, not production offsets or marketing commitments):
Attractiveness of the package: What’s the market’s perception? Formula One had to offer ESPN sweetheart terms in 2018 just to get desired exposure. By 2020, it got a small rights fee. Then with an assist from Netflix’s “Drive to Survive,” competition yielded $85 million annually from ESPN. F1 improved its story — and its market value. But what have you done for me lately? In 2023, F1 ratings were down 8%.
Time since last reset: New agreement reporting tends to compare average annual package prices (AAV), deal-over-deal. However, it is the step up from the final year of the previous deal to the first year of the new which usually counts. After that, it’s typically yearly cost-of-living increases. Thus, NASCAR, which ended 12-year Fox/NBC agreements, appeared to gain a bigger increase than the Premier League, whose last NBC deal ran only three seasons.
Has the package been under-market? Sometimes a sport and its media rights package get out of sync. Conditions at negotiating time matter. NASCAR saw huge rights fee upticks in previous deals, but then its viewership lagged (in part because it placed more races on lower-rated pay TV networks versus broadcast to generate more money). ESPN’s 12-year NCAA “other” championships deal was notably underpriced, and the explosive growth of the NCAA women’s basketball championship drove the recently announced, $920 million, 8-year-agreement.
Demographics (younger/older; income levels; geography): No one doubts the entertainment appeal of WWE, which helped drive last week’s Netflix deal, but its audience composition is not as attractive as other traditional sports, which draw the upscale male viewers that networks and their advertisers covet.
Demand: The NCAA “other” championships offer both tremendous volume and quality. But, realistically, how many bidders could handle its 2,200-hour tonnage, requirements for broad distribution, and event production? Answer: Only ESPN. Thus, when the NCAA determined to keep the championships package together (and not bid the women’s basketball championship separately) it became inevitable that ESPN would clinch the deal. Multiple networks are invested in college football, but ESPN has the incumbent’s advantage with the College Football Playoff — only it can pay more rights into the remaining two seasons of the current deal. ESPN appreciates how the CFP helps drive better ad sales throughout the five-month season, a competitive halo. On the other hand, the financial performance (and debt load) of media companies matters too. Paramount (CBS) and Warner Bros. Discovery (Turner) might aspire to be aggressive buyers, but their balance sheets constrain them.
Trend (where have audiences and sponsor interest gone from the last negotiation?): The standalone CFP has had an uneven ratings performance, in part because its participants have tended to come from the Southeast, Southwest and the 166 miles separating Ohio State and Michigan. However, the 2023 and 2024 semifinals were thrilling and Michigan’s championship run drew 27 million and 25 million viewers respectively. College football is the No. 2 sport in the U.S.
Nature of package: The NBA season is practically a year-round affair, with a seven-month pre/regular season, a two-month postseason, then the draft, summer ball, and WNBA in between. In a direct-to-consumer world, where months matter, that’s major churn mitigation. Additionally, NBA betting volumes already rival the NFL (team bets on the Celtics, Nuggets and Lakers were three of Action Network’s four most-tracked in 2023). The Premier League not only provides compelling live weekend morning and afternoon matches for NBC, but also it makes Peacock a must-have for international football fanatics. Savvy leagues change the partners, size, and elements of packages to adapt to the marketplace (e.g., the NFL moving Sunday Ticket to YouTube and adding influencers).
Tentpole property: The NCAA women’s basketball championship only covers three weeks, but it has emerged as ESPN’s leading event between January’s CFP and April’s Masters. The CFP already dominates its current windows and is set to expand by eight more.
Cord-cutting and a softer advertising environment aside, we expect the NBA to book a significant increase in its rights (as the NFL did) since it checks all the above boxes (perception, nine years since the last deal, young demos, high-demand property, gambling attraction, fairly stable audiences in a declining trend marketplace, significant interest from sponsors and fans, nine months of programming; and, certainly, a tentpole during its spring playoffs).
If ESPN closes its reported six-year extension, the CFP deal will also show a nice increase. Ironically, the CFP’s biggest challenge is that the NFL sucks much of the oxygen … and attractive time slots … out of the system. Twenty-three million viewers for the Peacock playoff game is just the latest example.
The big are getting bigger. CFP and NBA scores mean a lot less money left for everyone else. That’s the new reality of sports media: Still an up market — for a few.
Ed Desser is president of consultancy 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.
John Kosner Spoke with Mike Gunzelman of OutKick About the Kelce Brothers’ Media Appeal
Original Article: OutKick, by Mike Gunzelman, January 25th, 2024
Move over, Mannings, you’re about to have competition.
The star NFL brothers are prime to take over the sports and entertainment world and you can be sure that the suits are noticing it – in fact, I predict that it may even lead to Travis retiring from the Chiefs sooner than later knowing full well that he would have a career in media the very next day.
“I don’t know if and when either or both will formally retire but once both do, they are a natural TV and media attraction,” former EVP of digital and print media for ESPN John Kosner told OutKick. “They are All-Pro performers who are smart, fun and authentic, appealing to everyone, just like the Mannings and Charles Barkley. That is super hard to find and extremely valuable in our polarized country.”
Which networks are the frontrunners?
“I really like Amazon as a target [for the brothers] including some sort of shopping angle and maybe also featuring their mom,” Kosner added.
ENTER: THE ALT-CAST
A year ago, I wrote that television executives were going to oversaturate and run with the alt-casts until there were too many and it would eventually ruin their uniqueness. I likened it to the rise of podcasts where anyone and everyone seems to have one. It’s already happening; now we have people like Kevin Hart having a weekly ESPN2 NBA alt-cast that nobody whatsoever cares about.
“But, unless you’re Pat McAfee, Charles Barkley – or as I’ve advocated for: Travis and Jason Kelce, there are few personalities that can make the alt cast work [as well as the ManningCast and KayRodCast featuring Michael Kay and Alex Rodriguez.],” I wrote back in April of 2023.
I was right.
Alt-casts only work if the PEOPLE ON THEM mesh and there are no two better candidates than Travis and Jason Kelce. They are absolutely buzzing and are a TV exec’s wet dream for the dollar signs and ratings that they would bring in.
Hell, they already are a proven concept.
The Kelce “New Heights” podcast is frequently the most downloaded sports podcast in the world.
You add the Taylor Swift aspect as well as Jason Kelce “conveniently” ripping his shirt off and being a DUDE while crushing beers when every sports fan was watching during that Chiefs-Bills game?
Jason alone just guaranteed himself a career in sports media for years from his antics at Sunday’s game.
With Netflix now entering the live sports broadcast business with a wild $5 billion purchase of the WWE’s Monday Night Raw rights, the competition is only growing for who can snag the Kelce brothers.
Eric Bischoff, who later went to the WWE and became a WWE Hall of Famer knows a thing or two about developing and selling characters on television. He created and was part of the famous nWo wrestling stable led by Hulk Hogan, Scott Hall, and Kevin Nash which single-handedly transformed television ratings and the sports entertainment industry still to this day.
He believes the Kelce brothers have all the intangibles to become superstars in front of the camera.
“They are the Mannings with character version 2.0. My bet is their agents are already in negotiations,” Senior Vice President and Executive Producer of World Championship Wrestling (WCW) Eric Bischoff told me.
Former ESPN executive John Kosner, who helped develop the talents of Bill Simmons, Adrian Wojnarowski, and Darren Rovell while at ESPN, agrees with Bischoff.
“I bet the Kelce combo is atop the draft boards at every network and sports media company including the streaming companies. I could see TV networks pitching them for both NFL and morning show work as well.”
WHERE DO YOU THINK THE KELCE BROTHERS END UP?
John Kosner Spoke with Chris Bumbaca of USA Today about Peacock’s Exclusive NFL Playoff Game
Original Article: USA Today, by Chris Bumbaca, January 13th, 2024
On multiple occasions during the final game of the 2023 NFL regular season, NBC play-by-play announcer Mike Tirico offered viewers a variation of the same promotion over and over.
“And don’t miss the first-ever exclusively streamed playoff game Saturday night,” Tirico said as the Buffalo Bills battled the Miami Dolphins with the AFC East on the line. “Available only on Peacock.”
Downloading a streaming app to watch an NFL playoff game? For some, the idea seems ludicrous. For another type of media consumer, it’s normal. For the NFL and NBCUniversal, it’s a forward-thinking way to stay ahead of the curve – and make more money.
“We know and we see the continued evolution in the media landscape, and we want to be where our fans are,” NFL executive vice president of media distribution Hans Schroeder said on a conference call. “We know they’re increasingly, especially younger fans, on different screens.”
Why did an NFL playoff game end up on Peacock?
The addition of a seventh playoff team in each conference – and the elimination of a bye for the No. 2 seed – added two extra games to the wild-card slate. With that increased inventory, the NFL saw an opportunity to diversify its media presence on one of the biggest weekends of the football calendar.
“Considering cord-cutting and the soft TV ad-sales market, I think they have no choice but to pursue streaming because that’s where the growth is gonna be," John Kosner, the president of digital media and sports consultancy Kosner Media, told USA TODAY Sports. "That’s where media companies are investing.”
NBC Sports president Rick Cordella said the window was presented as a streaming-only game as part of the new media rights deal that went into effect prior to this season. NBCUniversal put together a pitch for the Saturday night game to air on Peacock. That, plus a reported $110 million, was all it took for Peacock to score rights to a matchup that resulted in the No. 3 Kansas City Chiefs — "Swifties," meet "The Office" — and No. 6 Dolphins.
“It’s not as if we shifted any games from linear to stream,” Cordella said. “This was an additional game that was available to us.”
In the past two years, an extra game was given to another broadcast partner, such as CBS or FOX, while the other went to ESPN on Monday.
The Chiefs-Dolphins game will still be available on the local NBC channel in the teams’ respective television markets.
“It’s historic, right?” Kosner said. “(NBC) also got a terrific game."
NFL fans becoming familiar with streaming
The NFL had 93 of the top 100 broadcasts in 2023, according to Nielsen ratings. That’s in large part due to their reach over cable, Kosner said. The league is able to offer a greater percentage of games available for free on TV than any other league.
In its second year of exclusively streaming “Thursday Night Football,” Amazon saw a 24% increase among total viewers (11.86 million) compared to the previous season (9.58 million). Kosner could see Amazon entering the postseason mix as early as 2025.
An international game was exclusively available on ESPN+ this year for the second straight season. And the NFL introduced NFL+, which allows fans to watch local and prime-time games for a monthly or yearly subscription rate.
All “Sunday Night Football” games on NBC are streamed simultaneously on Peacock (CBS does something similar with its NFL package and Paramount+). Peacock currently has 30 million subscribers, according to NBCUniversal. Comcast president Mike Cavanagh said in December the platform took on $2.8 billion in losses in 2023.
"It’s going to be fascinating to see," Kosner said. "I would be surprised if there wasn’t a lot of consternation among NFL fans as to they don’t know where the game is, they’re annoyed they have to pay $5.99 to see it. But this is how you seed new markets and new platforms."
The deal between NBCUniversal and the NFL for the streaming-exclusive playoff game is for this season only. Schroeder said future postseason games available digitally will be evaluated during the offseason.
"That really was at the top of our list as we thought about the major media partnerships we did a couple years ago," Schroeder said, "making sure all our partnerships had broad digital distribution and that we are growing in that important place for our fans."
What will ratings look like?
NBC did a version of a dry run by airing the Dec. 23 Bills-Los Angeles Chargers game exclusively on Peacock. According to Nielsen data, the game averaged 7.3 million viewers, peaking at 8.4 million from the 10:45-11 p.m. ET.
The expectation is that the first wild-card game Saturday between the Houston Texans and Cleveland Browns, which starts at 4:30 p.m. ET on Saturday, will draw in excess of 20 million viewers. NBC is betting on the lead-in to drive viewers toward Peacock and that first broadcast will be filled with self-promotion and reminders of how to watch Chiefs-Dolphins during that Browns-Texans matchup.
“We’re going to take a lot of learnings from it,” Schroeder said. “Certainly, viewership will be one of them. That will be just one of the criteria we think about and look at the opportunities we have going forward.”
Why NBC wanted to put an NFL playoff game on Peacock
Simply put: subscribers. Paying customers.
Cordella said that success won’t be judged Sunday morning or by the ratings. The long-term behavior by customers who signed up for the game – and can cancel at anytime – will be the lasting impact.
“We did this for a reason. It’s not just to get people to watch on Saturday night,” Cordella said. “It’s to get people to watch and experience all this various content that we have across the Peacock service.
“It’s down the road – did people behave how we thought they would behave once they get inside the platform?”
Additionally, Cordella pushed back on the idea that the game amounted to a $6 pay-per-view (the cost of a monthly subscription – with ads). He cited the growing men’s and women’s college basketball presence on the platform, with the top-ranked Purdue men losing Tuesday night followed by Iowa star Caitlin Clark playing the next. WWE, Premier League, MLB and other sports leagues have presences on Peacock. The Paris Summer Olympics later this year will also be featured on Peacock.
“There’s a wealth of content that people may be unaware it exists,” Cordella said.
And those are all reasons for sports fans to keep paying a monthly bill for Peacock.
“They’re very sports-focused, between EPL and college football," Kosner said. "So they’ll have to tell that story, along with ‘Saturday Night Live,’ and all that content they have. But I think it’s going to be a challenge to keep the many, many fans who really were subscribing just to watch this particular game.”
Still, Kosner predicted "millions" of sign-ups from Saturday alone.
“That’s going to be great for Peacock," the longtime ESPN executive said. "I can’t imagine what other content Peacock could offer that would give them the boom they’re going to get on Saturday night. The test, of course, is how many of the fans are going to stay with the service next month?”
The Taylor Swift effect
Kosner wondered whether the choice of Kansas City was a factor (Schroeder provided a non-answer about a holistic approach to scheduling wild-card weekend).
“You have Taylor Swift, her factor here,” Kosner said. “That’s going to attract women, that’s going to attract younger, tech-savvy fans. Was that a choice made on purpose? Because that’s an audience that Peacock would like to have.”
Who are the announcers for the Chiefs vs. Dolphins on Peacock?
Chiefs vs. Dolphins is one of three games to air on NBC properties this weekend. Tirico will be the play-by-play announcer for two, starting with the Peacock game. He will be joined by Jason Garrett as the game analyst and Kaylee Hartung as the sideline reporter.
Meanwhile, NBC opted to go with its top college football broadcast crew of Noah Eagle, Todd Blackledge and Kathryn Tappen to call the early game – leaving Al Michaels, he of “emeritus” NBC status, out of the picture. Tirico will then travel overnight to call the Los Angeles Rams at Detroit Lions on Sunday (8 p.m. ET, NBC).
Kosner expects the early Saturday broadcast to use the lead-in as an advantage and heavily cross-promote Peacock sign-ups.
What will be different about Peacock playoff game?
Like the first Peacock game, the fourth quarter will have no commercials. Cordella said they learned a lot three weeks ago during the first experiment about when to toss to the studio or stay with the break in the action on the field with the broadcast booth.
Chiefs’ Charles Omenihu offers to buy Peacock subscriptions
Chiefs defensive end Charles Omenihu reacted to the playoff schedule announcement by posting on social media: “Us playing on peacock ONLY is insane I won’t lie.”
For Chiefs (and Dolphins) fans who are considered out-of-market viewers, that’s the reality of Saturday’s game. But Omenihu wanted to help out the members of “Chiefs Kingdom” who were displeased with the situation.
“I saw the comments and want y’all to be able to watch us play," Omenihu wrote on social media. "So, I’m giving away 90 3-month Peacock memberships! To enter to win, reply to this tweet with why you should get picked. Picking winners Friday!”
The winners of the Omenihu sweepstakes will enjoy Peacock beyond Saturday night, which is what NBC wants. Everybody else better pony up that credit card information – if they haven't already.
John Kosner Spoke with Ira Boudway of Bloomberg about The NBA’s Media Negotiations
Original Article: Bloomberg, by Ira Boudway, January 8th, 2024
It’s been almost a decade since the NBA went to market with its national TV rights. In fall 2014, the league agreed to a pair of nine-year deals for a combined $24 billion with Walt Disney Co. (home of ABC and ESPN) and what’s now Warner Bros. Discovery Inc. (owner of TNT). At $2.7 billion per year, almost triple the annual value of the previous agreements, the deals helped the National Basketball Association grow rapidly—pushing player contracts into the hundreds of millions of dollars and franchise values into the billions. With those rights set to expire in 2025, the NBA will announce new landmark TV agreements this year.
Yet it’s been a tumultuous 10 years since the league was last at the table. Legacy media companies are being squeezed between the decline of the traditional cable bundle and the high cost of building subscription streaming services. In 2014, according to data from S&P Global Market Intelligence, more than 100 million US households had a multichannel pay-TV subscription. Now that number is below 75 million. The streaming apps created to recapture those lost viewers, meanwhile, are collectively racking up billions of dollars in losses each year for media giants such as Comcast, Disney, and Paramount.
This time around, industry observers say, the NBA will be hard-pressed to triple its TV money. And the league won’t be able to simply cut and paste from past contracts. “These deals are going to look and feel different,” says John Kosner, a sports media consultant and former ESPN executive.
The process officially begins in March when Disney and Warner enter an exclusive 45-day window to negotiate possible extensions. But the two incumbents aren’t likely to wait until then to submit bids. Possible newcomers, including Alphabet Inc. and Amazon.com Inc., have already begun positioning themselves to grab a piece of the NBA.
Currently, Disney gets 100 regular-season games, split between ESPN and ABC, plus a piece of the playoffs and all of the NBA Finals. Warner gets 64 regular-season games and a share of the playoffs. Most observers anticipate that both networks will continue carrying NBA games. “I wouldn’t expect either of the incumbents to fumble the opportunity,” says Ed Desser, a sports media consultant and former NBA executive. The shape of those packages is likely to change, however, as the league looks to carve out space for partners that can reach younger audiences and help keep the sport relevant. “The NBA has a younger-skewing fan base that is more liable to be accessed via a streaming platform,” Desser says. “You’ve got to fish where the fish are.”
In the past three years, the National Football League, Major League Baseball, and Major League Soccer have all done TV deals with the tech giants. The NFL sold Thursday Night Football to Amazon for more than $1 billion per season and its out-of-market Sunday Ticket package to Alphabet’s YouTube TV for $2 billion, while Apple Inc. bought Friday night games from MLB for a reported $85 million and then spent about $250 million to become the streaming home of MLS.
The NBA is almost certain to bring in a nontraditional broadcaster, too. To maximize revenue in a fractured landscape, says Daniel Cohen, a media rights consultant at Octagon Inc., the league will need to expand its partners to three or four. “If they do that with the right packages, then I could see $2.7 billion going to $6 billion,” Cohen says, referring to its annual haul. (Such a setup might look like this: a reduced number of games on ESPN-ABC and TNT; a weekly exclusive game on Apple TV+; and the league’s new In-Season Tournament going to Amazon.)
For fans, that could make following the NBA costlier and more complicated, with additional paywalls to jump over. But such is the life of sports fans these days as the cable bundle unravels.
John Kosner Spoke with Ben Portnoy of The Sports Business Journal About ESPN’s New NCAA Media Agreement
Original Article: Sports Business Journal, by Ben Portnoy, January 5th, 2024
That quaking you feel beneath your feet is coming from Indianapolis.
The NCAA this week announced a landmark eight-year deal with ESPN worth $115 million annually ($920 million total) for the broadcast rights to 40 championships — including women’s basketball, volleyball, gymnastics and more.
The move is a major one for NCAA President Charlie Baker, ESPN and those involved with the discussions. What does it all mean?
Here are a few takeaways:
NCAA avoided temptation to split up its TV package
Speculation in college sports circles in recent months centered on whether the NCAA would consider breaking out the women’s basketball tournament or the men’s and/or women’s College World Series into their own media bundle in some capacity.
Baker and his team decided against that. Why? Let him explain:
“What we had always said was we wanted the best deal for all of our championships,” Baker said when asked if the NCAA considered packaging the women’s basketball tournament separately. “If you think about it, it’s [2,300] hours of programming, which over the eight years of the deal will take place in an enormous number of settings with a whole variety of challenges and on the ground circumstances [making] this something where if you can get a production partner who’s willing to bite the whole thing of at a price that we believe is more than market competitive, we thought that was a better way to go.”
The decision to keep things bundled largely as they had been is layered. While there was a public narrative that the women’s basketball package could be healthy on its own, there was at least some fear that breaking of the most lucrative pieces of this package could devalue the remaining sports and leave them out to dry. In many media circles, both consultants and network sources shared that the value of the package was far greater with it being bundled and maintained. There are also the simple complications of having potentially more than one broadcast rights partner on these championships — more cooks in the kitchen, etc.
This isn’t to say there was lack of interest. Hillary Mandel, executive vice president and head of Americas for media at IMG, suggested there would have been plenty of interested parties should the rights have hit the open market (ESPN had an exclusive negotiating window on this deal).
Sources told Sports Business Journal that Fox Sports was among the parties that might have been interested in the rights to NCAA women’s basketball and volleyball if they were broken of, given the network’s investments in both sports in recent years.
“If you were to unbundle, the top of the package would be grabbed by everybody,” said Mandel, who consulted on the deal alongside Karen Brodkin, executive vice president and co-head of WME Sports. “But what would happen to everybody else? That’s not who the NCAA is. They don’t want to leave anybody behind.”
What does it mean for women’s basketball?
It’s a win for a number of women’s college sports, but if there’s a crown jewel in this collection of rights, it’s the NCAA women’s basketball tournament.
Baker told SBJ the NCAA valued the women’s basketball tournament at $65 million annually, or roughly 56% of the total value of the media rights included in this package. That’s a big number considering the entire last deal signed with ESPN in 2011 was only worth about $40 million annually.
“The trajectory of this property, in particular women’s sports, over the past few years, is extremely positive,” said Nick Dawson, ESPN’s senior vice president of college sports programming and acquisitions. “To have the entirety for eight more years is, in our view, a great place to be.”
Detractors will say the NCAA didn’t get enough in this deal. Media consultants Ed Desser and John Kosner, who provided analysis for the “Kaplan report” on gender equity published in 2021, estimated the women’s basketball championship could generate between $81 million and $112 million in annual rights fees and suggested it would be best sold as its own entity.
Kosner said ESPN is set up to manage the tonnage of the overall rights package “and although I think both Ed and I would argue that it would be a fascinating opportunity for one of the top digital companies, it’s not clear that any really got deeply involved.”
NCAA women’s basketball viewership has grown exponentially in recent years. The NCAA women’s title game between LSU and Iowa last year drew 9.9 million viewers on ABC, compared to the 14.69 million the men’s title game featuring UConn and San Diego State brought in on CBS. The LSU-Iowa contest was also the first women’s basketball title game to air on broadcast TV under the current media rights agreement with Disney/ESPN, which began prior to the 1996 tournament, and the title game will continue to air on ABC under the terms of the new deal.
The media rights market is a tight one, with a clear bifurcation between top properties getting a rights increase and others weighing not-so-attractive options, but the NCAA still netted a deal worth three times the previous one.
“We’re seeing the fruits of many, many years of labor coming to fruition in women’s sports,” Desser said. “If you go back 25 years, women’s sports was really almost an afterthought. I think it no longer is. It’s now in the mainstream. If you can generate a [almost] 10 rating on a women’s college basketball game, then you’ve really come a long, long way.”
ESPN stays frugal, but keeps its hands in everything
Despite the issues facing Jimmy Pitaro, the leader of ESPN didn’t flinch when it came to maintaining the company’s relationship with the NCAA and its belief in college sports, and ESPN now controls the domestic rights to virtually all of the NCAA’s championships — the massive exception being the men’s basketball tournament.
The deal is set to include 2,300 hours of championship programming, 800 hours of which will be on linear ESPN platforms. That’s certainly helpful in filling air time across its various platforms, but it shows that ESPN is committed to amplifying the coverage across its networks.
“What we bring to the table here, yes it’s the studio, it’s our megaphone, it’s our brand, it’s our production quality,” Pitaro told SBJ. “But it’s first and foremost our multiplatform approach.”
ESPN has been prudent with recent deals. The network passed on the Pac-12 deal, yet it’s currently working to re-up its rights with the College Football Playof, which expire after the 2025 season. ESPN also has upcoming negotiations with the NBA and UFC.
The new deal with the NCAA is set to expire in 2032, the same year the men’s basketball rights are scheduled to hit the market. That should give the NCAA ample flexibility then, but could grant ESPN that same ability.
“Most of the time when you’re involved in a negotiation, there’s what people say at the beginning and then there’s what people say when they come back for the third time,” Baker said. “One of the things that was really impressive to me about this was ESPN, they wanted this and they were willing to work for it.”
A win for Charlie Baker and the NCAA’s forward thinking
Barely nine months into his role, Baker, the former Massachusetts governor, has been resolute in trying to bring the NCAA into the 21st century. The proposal regarding athlete compensation he unveiled at the SBJ Intercollegiate Athletics Forum last month was a monumental moment for college sports and a profound shift in thinking. Helping nab a media rights deal in a tight market is another impressive feat early in his tenure.
“We think this is a terrific opportunity and a great deal,” Baker said, “and a chance to give a ton of additional visibility through some of the elements of the agreement beyond just the money for a variety of our sports.”
The NCAA has plenty of chaos to sift through in the coming months. Myriad lawsuits regarding athlete compensation could result in major settlements and the college athlete employment debate rages on.
Still, Baker is garnering attention in a positive way — that’s significant in its own right.
Parks Associates Names John Kosner One of the Top Leaders in Video and Entertainment
Original Article: Parks Associates, Top 2023 Leaders in Tech - Video and Entertainment, December 28th, 2023
International research firm highlights industry leaders in entertainment and streaming, energy, connected health, multifamily, and connected home and security.
Parks Associates, the research authority on digital lifestyles and technology, today released its 2023 Top Leaders in Technology, an annual list that recognizes leading technology executives who are featured speakers at the firm’s annual executive conferences. Parks Associates recognizes these leaders for their pivotal roles in market growth and their dedication to expanding industry knowledge. The research firm reports that 90% of US internet households now own a smartphone, surpassing the television for the first time to become the most ubiquitous device among US consumers.
John Kosner and Ed Desser Appeared on the Sports Media Watch Podcast
Original Article: Sports Media Watch Podcast by Jon Lewis and Drew Lerner, December 27th, 2023
On today's episode, Jon and Drew are joined by industry veterans John Kosner and Ed Desser for a big picture look at sports media. John Kosner previously served as the NBA's VP of Broadcasting during the Dream Team era and most recently served as ESPN's Executive Vice President and General Manager, Digital and Print Media before beginning his consultancy firm Kosner Media. Ed Desser served as a senior executive in the NBA's Commissioner's Office and as President of NBA Television where he negotiated numerous media rights deals for the league and has run his consultancy Desser Sports Media since 2005. The crew covers the NBA's upcoming media rights negotiations, the state of linear television and the transition to digital, fragmentation in the industry, Disney's trial balloon for divesting ABC, and possible strategic partners at ESPN.
From the latest Sports Media Watch Podcast, industry veterans John Kosner and Ed Desser join Jon Lewis and Drew Lerner to discuss the upcoming NBA media rights negotiations, the future of Disney, and more.
John Kosner on the upcoming NBA deals
People keep realizing just the intrinsic value of sports. And from the early ’80s until today, that value has only increased. Just stepping away from the NBA for a second, sports — you have to watch it live, it’s content that’s not replicable. As a matter of fact, we would argue it’s the only content that unifies people. People watch habitually. Sports is evergreen and yet it’s different every year.
When you take an asset like the NBA, in the current environment where there’s almost unlimited video options for people — some of them are paid some of them are free — it’s a differentiated product. As everything moves to streaming, as things move to direct-to-consumer, individual months matter in a way that they didn’t, say, earlier in my career … Now when all of the sudden almost all of these programmers are in the month-to-month churn business, a six month NBA regular season is just a bigger asset than people might have thought in the past world. It’s a reason to subscribe, it’s a reason not to churn.
Ed Desser on expectations for the amount of NBA media partners
I’m not sure that it matters. Whether somebody has two partners or four partners doesn’t change the character of their product. It’s probably the case that more partners, given what’s going on economically, will be appropriate and necessary. There’s no question in my mind that the NBA’s value as a programming packager has materially increased. That gets reflected in the deals both in terms of the amount for each and the number of them. I think there is room. I mean if we look at the historical approach of the NBA, it has been to have fewer partners. You’d have to go back to before 1984 to a time when both USA and ESPN and CBS all had rights.
It just may not be that that works anymore in a more constrained environment where the various entertainment companies that have traditionally bought rights aren’t as flush and aren’t growing the same way. And at the same time you’ve got the tech companies that are looking for how best to move forward.
Kosner on how to combat decline of linear television
Last month in the SBJ, SSRS Research Group had a piece and they said that today 2/3rds of the U.S. has a paid television subscription at home. That’s down from 75% five years ago and 85% a decade ago. And the key point they made is that access for young kids to live sports in the home is much diminished. Ed and I have spent a lot of time talking about FAST channels because FAST channels represent — almost everybody has a device in their home, almost everybody has a sufficiently fast connection to see video on a device — and it could be that utilizing FAST channels in the future is going to be one way that sports can get visibility to kids. And if you don’t build that fan base in an environment where kids are growing up with unlimited supply of video, video games, any number of other things, you’re playing with fire if you’re running a sports enterprise.
Desser on potential strategic partners for ESPN
I think that you have to ask yourself, “what is it that ESPN needs that it doesn’t already have?” It has relationships for programming, it has excellent relationships on the programming side. It has excellent relationships on the advertising side. It is well positioned with its app and its website on the digital side, to an extent. But obviously there are a lot more digital parties that could have an association.
The challenge is also, beyond the investment, it’s who is not going to be a problematic partner for Disney and ESPN. We saw ESPN finally getting into betting recently and that was something they had resisted doing for quite a long time. Is this something that is consistent with the Disney brand, for example. Are we going to make an association with PENN and is it going to cost us relationship with DraftKings and others? Finding the sweet spot of somebody who is motivated enough to want to come in, bring something more than just money, because obviously ESPN could do something with private equity or something like that, but that doesn’t make ESPN better necessarily.
So you’re talking about on the one hand, a large number of potential parties, but not very many I suspect that check enough boxes that it’s gonna make sense to do. Now having said that, there are a lot of entities out there that would have an interest in what ESPN is and has achieved. And so I can see it happening, it’s just hard to know … it’s a broad list of possibilities and it’s hard to anticipate exactly who the party or parties would be.
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Crossing The Sports Media Rubicon — One Year Later. John Kosner’s Latest SBJ Column with Ed Desser
Original Article: Sports Business Journal, by Ed Desser and John Kosner, December 11th, 2023
Sports media “crossed the Rubicon,” a point of no return, with last year’s exclusive Amazon NFL Thursday streaming deal (SBJ, Dec. 5, 2022). Our May 22, 2023, SBJ column noted more tectonic changes that had taken place early in the year. And Amazon Prime Video’s first NFL Black Friday game provided a fitting bookend to a year of increasingly interconnected, furiously changing events … or perhaps it came with news that Mark Cuban is selling a majority stake in his beloved Mavericks?
Witness all that happened in 2023:
On Black Friday, Amazon sported dynamic ad insertion, live commerce with an NFL shield QR code, AI overlays, multiple synced 4K feeds (including targeted “altcasts” — e.g., Dude Perfect), generating an audience seven years younger than the other NFL carriers. Amazon’s bold reinvention of sports (now adding exclusive NASCAR Cup races too) reminds us of Fox’s 1994 NFL coverage debut.
Thus, it’s not coincidental that Apple (with MLS … and Lionel Messi!) and Google/YouTube (with NFL Sunday Ticket) finally staked out their exclusive positions in sports media. Among other things, Google wanted NFL IP for its 15 million YouTube creators, an entirely new criteria for rights negotiations.
On Nov. 14, Netflix got into the act … kind of … streaming a live celebrity golf event. More profoundly, SBJ’s John Ourand reported that the world’s leading streamer is interested in the NBA’s In-Season Tournament, and Amazon wants NBA playoffs. Are these digital giants aggressive rights buyers or … more likely, eager to use their vast user bases and online video stores to be tax collectors for fans and rights holders searching for each other in an increasingly fragmented landscape? Certainly, they’re all after the growing pie of sports TV advertising, the last bastion of scale audience for marketers available simultaneously and universally across all age, ethnic and economic demos. On Nov. 19, Disney’s Hotstar drew a record 59 million concurrent viewers for its free coverage of the Cricket World Cup.
In July, Nielsen ominously reported a first: Broadcast and cable TV dropped below 50% of total TV usage despite its addition of out-of-home measurement, helping goose sports TV ratings (by 40% for NFL Thanksgiving). Meanwhile, Amazon and Netflix each have more subscribers than cable (almost as many homes as broadcast nets). Still …
Charter shocked us by dropping ESPN and ABC in several markets, including New York, during the U.S. Open and at the start of college football season, yet ultimately hewing to the old script by settling for a new deal by the debut of “Monday Night Football,” giving it access to certain Disney streaming assets but maintaining ESPN’s packaging. Nonetheless …
Cord-cutting accelerated as higher prices and lower quality hurt traditional pay TV ( Comcast lost 12% of its video subscribers this year, 490,000 last quarter).
With traditional linear pay TV (for four decades, sport’s bank and megaphone) in jeopardy, rights holders and buyers wonder where the money and exposure is going to come from now (hint: almost all leagues now have exclusive streaming packages).
The fallout was swift and brutal:
The 108-year-old Pac-12 conference imploded in August; Pacific coast mainstays Cal and Stanford decamped to the Atlantic Coast Conference, and rendered the Rose Bowl collateral damage.
Bankrupt Diamond Sports, and the RSN economic model (other than major market networks) teetered with MLB retaking local rights for the Padres and Diamondbacks. WBD threw in the towel on its four RSNs. The Suns, Jazz, Coyotes and Golden Knights moved to a combination of over-the-air (with multicast and low power) TV stations and streaming.
Will Rubicon 2024 mark the end of the 60-plus year MLB, NBA, NHL local broadcast model?
Enter Saudi riches. The kingdom invested over $100 million into MMA upstart PFL and then staged the stunning Tyson Fury-Francis Ngannou boxing/MMA crossover fight. In June, they signed soccer megastar Cristiano Ronaldo to a reported $220 million contract, elevating the Saudi Pro League. Now they are set to become FIFA’s biggest sponsor ($1 billion annually with Aramco) and likely 2034 FIFA World Cup host. Most shocking, LIV Golf and the PGA Tour agreed to agree to stop fighting in court and form a joint venture on the course and boardroom.
LIV’s first rights holder, the CW broadcast “netlet,” added the ACC, NASCAR Xfinity, “Inside the NFL,” WWE’s NXT and now has more live sports hours than any broadcaster other than the Big Four.
Just as the 1999 Women’s World Cup put U.S. women’s soccer on the map, so did last summer’s WWC for the rest of the world. Spain won but England’s Lionesses almost stole the show. Meanwhile, the NWSL forged new agreements with CBS, ESPN, Amazon and Scripps.
The NCAA Women’s Basketball Championship Final drew a stunning 9.9 record rating on an April Sunday afternoon on ABC. Holy NIL! Caitlin Clark now has her own Allstate commercial! The WNBA is the ultimate beneficiary.
Hagiographic athlete “documentaries” and all-access series flooded streaming services. Today, sports is practically “The Truman Show.” It’s meta. Want to see the actual “behind-the-scenes” moment when golf pros found out about the proposed PGA Tour-LIV-DP World Tour merger? Season 2 of Netflix’s “Full Swing” was shooting then!
At the recent SBJ Media Innovators conference, our former NBA colleague Bill Koenig said, “What’s exciting — and a bit daunting — is I think that over the next five years, you’ll see more change than you’ve seen in the last 30 years in media.”
Ed Desser is president of consultancy 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.
John Kosner Spoke with Jordan Bianchi of The Athletic about NASCAR’s New Deal
Original Article: The Athletic, by Jordan Bianchi, November 30th, 2023
NASHVILLE — NASCAR’s media future is now clear.
NASCAR on Wednesday announced its new media rights deal that will take effect beginning with the 2025 season, maintaining an alignment with traditional partners Fox Sports and NBC Sports while bringing in new partners Amazon Prime and Warner Bros. Discovery (via its TNT and B/R Sports platforms) as part of a seven-year deal worth an estimated $7.7 billion dollars, according to industry sources. The deal signals NASCAR’s first foray into streaming its premier Cup Series races and follows other sports like football and baseball onto both traditional TV and streaming services.
For a sport in a constant quest to build its audience, what does the big picture look like? Let’s take a look.
What is the breakdown in the number of races each of the four partners will cover? Any idea exactly on the specific races they’ll have on their respective platforms?
Both Fox Sports and NBC Sports have rights to 14 races annually, with Amazon and Warner Bros. each having five apiece. How the still-to-be-determined 2025 schedule lays out will determine which races will air on which platform, though a few things are known — or can at least be surmised.
As it has since 2001, Fox’s portion comes at the beginning of the season, starting with the Clash exhibition and then the subsequent 13 races. Amazon’s first race is the 15th on the schedule, which is likely to be the Coca-Cola 600, according to industry sources. TNT/Warner Bros. follows Amazon, and appears likely to get the Chicago Street Race, if it returns in 2025, given its spot on the calendar and NASCAR’s desire to give all partners a signature race.
“I would say both (Amazon and WBD) are interested in embracing major tentpole events, and so we will make sure that we have major tentpole events for all of our partners,” NASCAR president Steve Phelps said Wednesday. “I’m not sure how long we’ll be doing the Chicago street race — I hope we do the Chicago Street Race for seven years — but we’ve got to make sure we have some flexibility today.”
NBC will take the final 14 races, including the entire playoffs.
Phelps also confirmed that the Daytona 500 will continue as the opening points race for the “foreseeable future.” Fox will also retain rights to the All-Star Race, NASCAR’s other exhibition race, which traditionally has been the 15th race on the schedule, meaning that race will move up.
Looking at how the schedule typically is put together, summer races at Gateway, Pocono, New Hampshire, Sonoma, Iowa and Nashville are expected to be among those carried by either Amazon or Warner Bros. NBC retains the regular-season finale, the Southern 500 on Labor Day weekend and staple playoff races such as Bristol, Kansas, Talladega and Martinsville.
“What happens in 2025 and beyond, I don’t know, schedule-wise at all other than where we are going to start our regular season,” Phelps said.
Why did NASCAR emphasize aligning itself with streaming services?
NASCAR is one of the few major professional sports properties that didn’t already have a streaming deal, something industry experts contend factored in the league struggling to adequately market itself toward a younger demographic.
“Ever since the pandemic hit, people have been leaving video subscriptions on pay TV, and as a result, if you want to reach a growing number of homes that are younger, that are tech savvy, that are your next generation of fans, then you have to have a robust streaming presence for at least some of your content,” said Lee Berke, president and CEO of sports media consulting firm LHB Sports, Entertainment & Media Inc. “You still want the broad reach you get in broadcast, and you still want to be included on pay TV in some respects, but your platforms increasingly need to include a substantial streaming component.”
NASCAR knew it needed to do a better job capturing the attention beyond its older core audience. The hope is that Cup races becoming more accessible beyond television will help introduce the sport to a younger audience. And that point has obviously been made to its new partners.
“We really want to go innovate,” said Jay Marine, Amazon Prime Video vice president and global head of sports. “We look at this as a seven-year-plus partnership, and we’ll talk about the renewal later, but that’s how we want to invest so that we can innovate for the long-term, and we’re excited to do that. We’re excited to reach a younger audience who may have cut the cord and (is) not watching as much, which we’ve been able to do with ‘Thursday Night Football,’ as an example. We’re excited to be part of it and excited to work across this partnership group, as well.”
Both Phelps and RFK Racing president Steve Newmark noted Wednesday they have college-aged children who consume programming primarily through their mobile phones or tablets.
“My kids in college are consuming more from streaming than they are probably from broadcast, so to me, this gives us that right blend,” Newmark said. “And I don’t think any of us knows what the media landscape is going to look like in 10 years. But what this does is this gives us kind of covering all the bases, and so I actually think our (sponsors) are going to be excited about it.”
What else jumps out about this deal?
The money, of course. Securing a deal that brings in $7.7 billion is nothing to sneeze at, especially in a marketplace that has seen several notable sports properties either recently sign new deals or about to come up for renewals, and all while media companies are scaling back their expenses and becoming more selective on what they bid on.
So, yeah, NASCAR faced plenty of hurdles during this prolonged process that took longer to complete than anticipated.
“We wanted to make sure that all the innovation we’re doing from a sport perspective that we were getting in front of new demos and that we were setting ourselves up well for the future,” said Brian Herbst, NASCAR senior vice president of media and productions.
That NASCAR navigated the changing landscape and landed a deal worth nearly 40 percent more than its current deals is a success, industry experts note.
“NASCAR had a successful, long-term renewal along the lines that most had predicted,” said John Kosner, president, Kosner Media and former executive vice president of ESPN Digital. “If there were surprises, it’s that the process took longer to finalize and that it required four partners (and two streaming partners) to complete the deal. This is a negotiation trend we are seeing where more broadcast parties are necessary for a league to achieve its revenue and reach goals.”
Said Ed Desser, a longtime media consultant: “NASCAR got a nice raise, but not as large as in prior deals. This has more to do with where NASCAR started (very strong prior deals) and the changing marketplace (streaming, cord-cutting, etc.) than any meaningful change in the underlying product itself. NASCAR has addressed its recent issues like most major professional sports organizations do periodically.”
How will longtime NASCAR fans likely react to this news?
Undoubtedly, some fans are going to be annoyed that they’ll have to subscribe to Amazon and also have another platform that provides access to live programming for the Fox, NBC and WBD components of the deal — an understandable complaint as such expenditures can quickly add up.
The unfortunate reality, however, is that this is now the life of a sports fan. Almost every league is spreading itself among multiple platforms, necessitating multiple subscriptions if you want to watch every game/race. It’s tough to swallow, but it isn’t changing anytime soon.
If you’re looking for a silver lining, it’s that having a partner like Amazon allows for flexibility in how a race is presented to viewers. In addition to a traditional broadcast, the opportunity is there to bring viewers alternative streams providing an array of options. For example, maybe a stream focused solely on in-car video or offering in-depth technical data geared toward the hardcore, technical-minded fan?
In a sponsorship-driven sport where companies want as many eyeballs on their brands as possible, is there a risk for NASCAR in shifting races to a streaming service?
The Athletic has asked numerous people within the NASCAR industry and experts in the sports media landscape and, near universally, the answer is: This was something NASCAR needed to do. If the league wanted to grow its fan base, it had little choice but to pursue this avenue.
“The reality is every sport out there, if they’re going to have some long-term perspective on what they need to do, they need to come up with their next generation of fans,” Berke said. “And if you’re not being seen by them growing up, then they don’t know about you. They don’t become fans. You’re not born a NASCAR fan. You have to be exposed to it.”
No wonder team executives, many of whom can be described as “risk averse,” were praising the deal on Wednesday, both publicly and privately, after learning the specifics of the financials and what it means for NASCAR’s future.
“I think the new arrangement is fantastic,” Newmark said. “From our perspective, what we like to see is kind of the might of those four media companies will all be behind promoting our sport. I think the access and the distribution is really going to help us take it to the next level and fits with the vision of our sport of being aggressive, and bold. We’re really excited about what that brings.”
On the subject of the teams, what does this mean for the ongoing negotiations between them and NASCAR over a new charter agreement?
Before extending its charter agreement with teams, which expires at the end of the 2024 season, NASCAR first wanted to secure its next media rights deal so it had a better idea of the financials it had to distribute.
With this box now checked, all attention turns to the last big, pressing domino facing NASCAR on the business side. Neither NASCAR nor team executives were keen Wednesday to discuss their ongoing negotiations and how to best divide revenue, preferring instead to focus on the completed TV deal.
There is no timeline for when an extension to the charter agreement will be finalized, Phelps said, though he did state that NASCAR was committed to striking a deal.
Where can fans watch practice and qualifying?
For the most part, practice and qualifying sessions can be found on either Amazon or B/R Sports. Amazon will stream the first half of the 38-race schedule, B/R Sports the second with some airing on TruTV. The only exceptions are the Clash, the Daytona 500 and NASCAR All-Star Race, all of which Fox Sports will televise.
What about the future TV deals for the Xfinity and Truck Series?
Fox announced Wednesday it retained exclusive rights to the entire Truck Series schedule through the 2031 season, though the specific terms weren’t disclosed.
The Xfinity Series will have its entire 33-race schedule broadcast on The CW beginning in 2025. Similar to the Cup deals, NASCAR signed a seven-year contract with the network that is available nationwide via over-the-air television.
John Kosner Participated in “The New Sports Video Experience” Panel for Parks Associates
Original Article: Parks Associates, November 15th, 2023
In a world driven by dynamic changes in the entertainment landscape, Parks Associates' Future of Video event emerges as a beacon of insight, gathering industry leaders to chart the course of the video and connected entertainment industries. With speakers hailing from TikTok, Tubi, VIZIO, and more, this event is poised to illuminate the present and future of video consumption!
SHIFTING DEMANDS IN VIDEO SERVICES
As the digital tapestry of video services continues to evolve, Parks Associates' latest report, "Video Services: Shifting Demand," has uncovered a groundbreaking statistic—31% of households have embraced ad-supported AVOD or FAST streaming services in the last 30 days. This paradigm shift underscores the transformative potential of the Future of Video event.
EXPLORING THE EVENT
From November 14-16, 2023, the Marina del Rey Marriott will be the nexus of the video industry's luminaries, converging for the Future of Video event. This executive conference is a culmination of insightful presentations, interactive panel discussions, and analyst insights, all poised to unravel the latest trends shaping the video and connected entertainment sectors.
KEYNOTE VISIONARIES
Distinguished keynote speakers include:
Matthew Durgin, VP Content and Services, LG Electronics
Albert Lai, Global Director, DTC/OTT Streaming for Media & Entertainment, Google
Stefan Van Engen, VP, Content Programming and Partnerships, Xumo
PANEL POWERHOUSES
Bringing their expertise to the forefront are esteemed panel speakers:
Scott Barton, Chief Product Officer, MyBundle.TV
Isaac Bess, Global Head of Distribution, TikTok
Jake Cohen, Head of Business Development and Strategy – Content, Verizon
Aileen Del Cid, Head of Marketing, Samsung TV Plus
Akinwole Garrett, VP, Business Development and M&A, REVOLT Media & TV
Ken Gerstein, VP, NAGRA Anti-Piracy & NexGuard, NAGRA
Chris Glover, VP Marketing, FreeWheel
Dan Goman, CEO, Ateliere
Samuel Harowitz, Vice President, Content Acquisition and Partnerships, Tubi
Blair Harrison, CEO & Founder, Frequency
Anthony Jiwa, CMO, OUTtv
Becky Jones, Chief Marketing & People Officer, Viamedia
John Kosner, President, Kosner Media
David Mühle, CEO, PlayPilot
Marty Roberts, SVP, Product Strategy and Marketing, Brightcove
Brij Shah, Head of Strategic Growth, Comcast Advertising
Geir Skaaden, EVP & Chief Products & Services Officer, Xperi
Chris Tanquary, Senior Director of Business Development, Strategic Accounts, VIZIO
Jason Tyrrell, General Manager, Kanopy, OverDrive
John Kosner Participated in “The Future of Sports Journalism” Panel for The Aspen Institute
Original Article: The Aspen Institute, November 15th, 2023
Sports both reflect and shape our society. Journalism unpacks those relationships, along the way making the games that we play more interesting and relevant. The New York Times, HBO Real Sports, and Los Angeles Times helped set the standard. Now, each outlet is changing how it covers sports – and Real Sports ended its run after 29 award-winning years.
What happened? And what does the future hold for enterprise and investigative journalism in sports? Could the public get less, or more, coverage of important topics as the media landscape evolves? What are the most promising business models to support this work? And what do we lose if longform sports journalism gets deprioritized in a streaming world?
Veteran journalists addressed the topic from two angles, with two panels:
What Happened to Sports Journalism, with speakers including:
Andrea Kremer, NFL Network chief correspondent, CBS Sports Network co-host, HBO Real Sports correspondent
Ben Strauss, Washington Post sports and media reporter
Jon Solomon, Aspen Institute Sports & Society Program editorial director, former investigative sports reporter (moderator)
Where to Go From Here for Sports Journalism, with speakers including:
David Boardman, Temple University Klein College of Media and Communication dean and professor, Solutions Journalism Network vice chair
John Kosner, Kosner Media president, four-decade veteran of sports media
Iliana Limón Romero, Los Angeles Times sports editor
Tom Farrey, Aspen Institute Sports & Society Program executive director, former investigative sports reporter (moderator)
Future of Sports is a conversation series, hosted by the Aspen Institute Sports & Society Program, that helps stakeholders think through key questions shaping the future of our games, the sports industry and its impact on society. Past events examined the future of football, a series on college athlete pay including the government’s role and the future of name, image and likeness rights, sports betting, athlete activism, coaching, the U.S. Olympic movement, women’s pro sports, children’s rights in sports, and the future of sports in the climate crisis. Contact Sports & Society Program Editorial Director Jon Solomon at jon.solomon@aspeninstitute.org with questions or inquiries.
John Kosner Spoke with Oliver Barnes of The Financial Times about ESPN Bet
Original Article: The Financial Times, by Oliver Barnes, November 14th, 2023
Over the course of more than two decades with ESPN, anchor Scott Van Pelt has endeared himself to viewers by commentating on the iconic 18th hole at the US Masters golf tournament and delivering breaking news on the broadcaster’s flagship SportsCenter programme.
In an advert released to promote Tuesday’s launch of ESPN Bet, the Disney-owned sport network’s betting venture with casino group Penn Entertainment, Van Pelt, known affectionately by viewers as SVP, pumps his fist as a notification flashes up on his phone declaring him a “winner!”
The 15-second commercial is a glimpse into why Penn agreed to pay ESPN $150mn a year to secure a 10-year licensing deal, wagering that its broadcast stars and 200mn-strong monthly audience will help crack the duopoly of DraftKings and FanDuel, which together control more than two-thirds of the $9bn US online sports betting market.
“People that think this battle has been fought and won are way ahead of where I think the market is,” said Steve Bornstein, ESPN’s former chief executive who runs betting data group Genius Sports’ North America division. “Obviously there are some very dominant players . . . but we’re still in the go-go growth stage, the market is not calcified.”
For ESPN, Penn offers expertise in the gambling sector and the technology to power the new app, which the casino group acquired in its $2bn takeover of Canadian gaming app theScore in 2021. Penn also operates more than 40 bricks-and-mortar casinos.
Penn will pump an additional $150mn a year into marketing ESPN Bet, which is launching in 17 states.
ESPN Bet is not the only latecomer hoping to break into a market that has rapidly consolidated in the five years since the US Supreme Court overturned a 1992 law banning sports betting. In August, sports merchandise company Fanatics launched its betting app in four states, hoping an offer of a free sports jersey after placing $50 worth of bets would attract fans.
But “first-mover advantage”, combined with the fine-tuned technology used by DraftKings and FanDuel, mean “it’s going to be pretty difficult for any other companies to break 10 per cent market share”, predicted Chad Beynon, a gaming industry analyst at Macquarie Group. In the 26 US states, as well as Washington DC, where sports betting is legal, companies that have launched even just months after the legalisation date found it “incredibly difficult to acquire customers”, noted Beynon.
Since the start of the NFL season, Fanatics and its sister app PointsBet, which the sports merchandise group acquired for $150mn earlier this year, have been downloaded 371,000 times by smartphone users, the fourth highest for any sports betting app over the period, according to JMP Securities. But the Fanatics app has so far failed to achieve higher than a 3.5 per cent market share in any state.
“Ultimately, we’re a second mover . . . we embrace that as permission to frankly move more methodically,” acknowledged Matt King, chief executive of the Fanatics betting app, who previously ran FanDuel between 2017 and 2021. He added that “the quest for short-term market share bumps” had historically led betting apps “to light a lot of money on fire”.
By next spring, Fanatics will have migrated all of the PointsBet customers over to its app, enabling customers in as many as 20 states to access the new app. “Our view is let’s take time to get our product right,” added King.
But Penn does not have the luxury of time to make a success of ESPN Bet. Three years into the partnership, ESPN can activate a termination clause on the arrangement if the app fails to gain significant market share. ESPN Bet “needs to come out of the gates firing”, said Bernie McTernan, a senior analyst with Needham & Co. The deal also grants ESPN the ability to eventually become a significant shareholder in Penn.
In investor meetings, Penn and ESPN executives have talked up a Jefferies survey of more than 1,400 casual sports bettors, which showed that 53 per cent were open to trying ESPN Bet and 25 per cent expected to make it their primary betting platform, according to people familiar with the matter.
On Tuesday, Penn will send a prompt to the 2mn customers on its Barstool sportsbook to download the ESPN Bet app. But the bigger hope is that the app will appeal to ESPN users who use the sport networks to check scores but currently “have to leave ESPN’s ecosystem” to place a bet, Jay Snowden, Penn’s chief executive, explained at a launch event this month.
Snowden has previously pointed to the success of the UK’s Sky Bet, which uses broadcaster Sky Sports’ brand identity and now has the same parent company as FanDuel, as a blueprint for ESPN Bet. “There’s only one worldwide leader in sports so this was the opportunity of the century,” said Snowden.
ESPN Bet branding will be rolled out across ESPN’s TV shows in the coming months. On the app, ESPN’s hosts, such as Van Pelt, will recommend bets for users.
Since sports betting was legalised, Disney has toyed with the idea of launching an ESPN betting brand as a means of returning the broadcaster, which generates $2.9bn in annual profits, to growth, but chief executive Bob Iger was initially cautious.
Iger said on an earnings call in 2019 that he doubted ESPN would be “getting into the business of betting” any time soon. But in his second stint as Disney chief executive, that position has changed as ESPN considers selling some of its 80 per cent stake to a strategic partner that can help it prosper in the streaming era as revenues from cable subscriptions fall.
Sports betting was always ESPN’s “manifest destiny”, said John Kosner, a former ESPN executive in charge of its digital products who runs industry consultancy Kosner Media. “What it means to be the worldwide leader in sports is different in 2023 than it was in 2013,” explained Kosner.
ESPN held advanced talks with major sports betting operators, including Caesars Entertainment and DraftKings, with whom it had promotional agreements that did not prove successful, according to a person familiar with matter. “It seemed like we were on the 10-yard line . . . for several years with a bunch of different people,” said an executive close to the talks.
ESPN chief executive Jimmy Pitaro opted for Penn as a partner after first meeting Snowden at the sports network’s headquarters in Connecticut earlier this year. Reflecting on the meeting, Snowden said: “It was very clear to Jimmy that this isn’t something that ESPN wants to do, this is something that ESPN has to do because sports fans are demanding it.”
But the entrance of Disney — the entertainment giant behind Mickey Mouse and Pixar animation studios — into gambling, a product linked to addiction, is not without risks. “I’m not sure we’ve heard the end of people complaining about gambling in the States,” warned a former senior ESPN executive. “There are going to be negatives because there are people dead set against it, there’s certainly problem gambling.”
However, the prize for new entrants is a tantalising one. The US sports betting market is set to grow a further 60 per cent by 2027, achieving annual gross gaming revenues of nearly $18bn, according to industry consultancy Eilers & Krejcik Gaming.
Will the US sports betting industry remain a duopoly in the long term? “Forever is a long time,” said David Katz, an analyst at Jefferies. The two dominant players “cracked the code” of in-game accumulator bets, the most profitable and popular product, added Katz. “But there’s going to be some next big thing and whether FanDuel or DraftKings get there first, or whether it’s somebody else, I think is a fair question,” he said.
For a long time after its launch in 1979, ESPN “was not taken seriously” as a sports network, recalled Kosner, formerly of ESPN, but it flourished into the world’s biggest and “the rest is history”. “I wouldn’t bet against ESPN Bet either.”
John Kosner Spoke with Robert O’Connell of The Wall Street Journal about The NBA’s In-Season Tournament
Original Article: Wall Street Journal, by Robert O’Connell, November 2nd, 2023
The NBA Created Another Championship. Is It a Gimmick or Genius?
There’s a new import to the NBA, and this one, unlike Victor Wembanyama, doesn’t block shots or dunk alley-oops. The inaugural “In-Season Tournament,” which will unfold over the first quarter of the league’s calendar, is a novelty among major U.S. team sports. But it borrows from the way the rest of the world has long done the business of competition.
“Whether it’s international soccer, international basketball, individual sports here in the U. S.—golf, tennis, racing, fighting—the idea that you can raise multiple trophies within a calendar season is incredibly common, and appreciated by fans,” said Evan Wasch, the NBA’s executive vice president of basketball strategy and analytics.
“There’s an untapped opportunity here,” Wasch said, “a chance to be a pioneer.”
The experiment begins on Friday night. Seven matchups will raise the curtain on the tournament, which will end with a trophy—the NBA Cup—lifted in Las Vegas on Dec. 9. The league’s objective is to enliven an early stretch of its season, to boost ratings and amplify chatter, to grab up a greater share of the sizable audience for live sports.
But the question is: how much will anybody—players and fans, advertisers and prospective media-rights partners—care about a competition manufactured out of thin air?
“We’re looking to create a new tradition here, and as the saying goes, new traditions aren’t created overnight,” commissioner Adam Silver said in September. “It will be the fans and the coverage,” he added, “which will be telling us whether this is working or not.”
This bid for attention comes at a moment when the NBA’s ability to attract eyeballs holds particular significance. The league is negotiating new mediarights deals, which will go into effect after the 2024-25 season. Current partners ESPN and TNT are in renewal talks but aren’t looking to significantly increase the estimated combined $2.6 billion they spend to broadcast NBA games, and streaming providers Apple and Amazon are interested in taking on packages of games.
The specifics of the tournament have more in common with soccer’s World Cup and college basketball’s March Madness than with the NBA playoff format that decides the championship each June. The league’s 30 teams have been sorted into six groups, and the winner of each group—plus two wild-card entrants—will land in a eight-team, single-elimination bracket. The semifinals (airing on ESPN and TNT) and final (airing on ABC) will take place at Las Vegas’ T-Mobile Arena. Schedule maneuvering will let every game but the final swap in for a regular season slot; only the two teams competing for the trophy will play an extra contest past the usual 82.
The league and its partners hope that the single-elimination model will bring enough of a spark to convince two crucial groups—fans and players—to buy in. Most NBA players haven’t appeared in a string of winner-take-all games since their collegiate days; the setup could bring NCAA Tournament-esque chaos and one-night-only star turns that run counter to the more predictable best-of-seven playoff model.
“Seasons are long,” Craig Barry, executive vice president and chief content officer at TNT Sports, said. “Creating a little bit of excitement, finding ways to eventize regular season games and get fans excited is important.”
A successful In-Season Tournament could demonstrate that the NBA isn’t merely a bankable property—a rare, reliable deliverer of live audiences to advertisers—but also an evolving one, willing to break with tradition in pursuit of growth. Wasch and Silver have both acknowledged that some fans feel the league’s regular season has lost some of its intrigue, with teams regularly resting players to keep them healthy for the playoffs. In 2021, the NBA debuted its play-in tournament, a competition for the playoffs’ final spots that has energized the sometimes drowsy period just before the postseason.
“In the current environment,” said John Kosner, a consultant and former ESPN executive, “if you’re not constantly improving your offerings for fans, TV networks, sponsors and advertisers, you’re falling behind.”
Still, the new event has been met by a mix of curiosity and skepticism from basketball fans. Many observers online have cracked jokes about the garish, striped courts teams will lay down for tournament games. Some have also noted that the In-Season Tournament doesn’t quite meet the standard of the contests it takes inspiration from.
In European soccer, the Champions League brings together top teams from across top domestic competitions: the English Premier League, Spain’s La Liga, Germany’s Bundesliga and more. Tennis players and golfers compete across surfaces that have much more substantial variations that paint color.
“The reason people like the Champions League is because we get to see Real Madrid against Manchester City, which doesn’t happen all that often,” Tobias Moskowitz, a Yale professor who teaches sports analytics, said. “We’re not getting that in the NBA, right? It’s more, maybe the Bucks end up playing the Suns one more time than we thought.”
The NBA will incentivize its athletes with a monetary reward—the winning team will receive $500,000 per player—and, Wasch said, the possibility of legacy-boosting achievements: All-Tournament team nods and MVPs, the trophy itself. “If we’re seeing early indications of success, you’re going to see a little ratcheted-up intensity than you see during a typical regular-season game,” Silver said.
The league’s current network partners likewise hope that adjustments to their presentations, such as never-before-seen camera angles, bring viewers into the fold. “Differentiation is always of interest to fans,” said David Roberts, ESPN’s head of event and studio production.
Executives at both ESPN and TNT said that the ongoing negotiations around the next media-right deals—and the possibility that the tournament their networks help produce and publicize will fall in the hands of a streamer in a couple seasons—haven’t affected the enthusiasm with which they have worked on the project.
“It’s inevitable that there’s potentially going to be more platforms and companies interested,” Barry said. “That’s a good thing, because that means it’s healthy.”
Silver has emphasized taking the long view of the In-Season Tournament, noting that format changes could come in future iterations. Cachet is impossible to fasttrack. Time will tell whether players’ investment brings about Wasch’s vision of a competition that “comes close” to the traditional playoffs, or whether they treat tournament games as normal contests on flashier floors.
“It will take an identity of its own over time,” Golden State Warriors superstar Stephen Curry said over the summer. “It’s hard to kind of predict what it’s going to feel like or look like from a fan perspective, a player perspective…It’s still 82 games, it’s just under a different narrative.”
John Kosner Spoke with Ben Mullin of The New York Times About The NBA’s Media Negotiations
Original Article: The New York Times, by Ben Mullin, October 29th, 2023
The National Basketball Association’s season tipped off on Tuesday with stars like LeBron James and Nikola Jokic beginning the long quest for a title. But the action that will have longer-term ramifications for the league, and the media and entertainment landscape, is happening off the court.
The companies holding the rights to show N.B.A. games — Disney, which owns ESPN and ABC, and Warner Bros. Discovery, the parent company of TNT — are collectively paying the league $24 billion over nine years for that privilege. But their contracts expire after next season, and the N.B.A. hopes to more than double the money it receives for rights in the next deal, according to several people familiar with the league’s expectations who spoke on the condition of anonymity to discuss ongoing negotiations.
It won’t get that without a fight. After decades in which sports leagues garnered ever bigger piles of money for the rights to show their games, there are signs that media and technology companies are under increasing pressure to justify the exorbitant amounts they spend on broadcast rights. Interest rates are high, Wall Street is demanding profitability over growth, and streaming has reconfigured the entertainment industry.
The result of the N.B.A.’s negotiations will say a lot about the future of broadcast networks, the cable bundle, streaming services and the sports media ambitions of technology companies.
“I think in this era that we’re coming out of, this is the last of the big deals,” said John Kosner, who advises sports media and tech start-ups after a two-decade career as an executive at ESPN.
The National Football League, the most valuable sports league in the world, did not quite double its rights fees when it signed new agreements in 2021. And that was before the stock market declined, interest rates rose and wars began in Europe and the Middle East.
Disney and Warner Bros. Discovery, which have televised N.B.A. games for more than two decades, aren’t necessarily in positions to shell out lots of cash, either.
Disney has carried out extreme cost-cutting and layoffs this year, and its chief executive, Robert A. Iger, has said the company is considering “strategic options” to sell equity in ESPN. Warner Bros. Discovery has also cut costs, and said in August that it had a debt load of nearly $50 billion following the merger of the two companies last year.
The most likely scenario, according to the people familiar with the negotiations, is that Disney and Warner Bros. Discovery will sign new agreements with the N.B.A. to televise fewer games. The N.B.A. declined to comment for this article.
The two companies together show about 160 regular-season games each year, as well as the playoffs and N.B.A. finals. Most games are shown on cable (ESPN and TNT), with a handful on ABC.
For both companies, N.B.A. broadcast rights still represent a valuable bargaining chip in negotiations with their biggest customers: cable and satellite companies. Those distributors pay billions of dollars to Disney and Warner Bros. Discovery for the rights to show their cable channels, including TNT and ESPN, based in part on the expectation that those channels will air sports like N.B.A. basketball.
An N.B.A. package would also help both companies shift to a streaming future. Warner Bros. Discovery recently added a live sports package to its streaming service, Max, while ESPN has been vocal about having a stand-alone streaming offering for its flagship channel in the near future.
Disney and Warner Bros. Discovery are not likely to be the only companies showing N.B.A. games, though. If those companies end up showing fewer games in the new deal, the league may create a third rights package, perhaps even a fourth, of the games no longer included in the first two packages, as well as the league’s new in-season tournament.
The most likely buyers for those packages of games are Amazon and NBC, according to the people familiar with the negotiations.
Top executives at Fox, CBS and the Google-owned YouTube have said that they are unlikely to put in serious bids for broadcasting rights. The intentions of Netflix and Apple are less clear, but Netflix has long said it is uninterested in paying the kind of prices the N.B.A. is looking for. Apple has largely committed itself to a sports strategy of buying up all of a league’s domestic and international rights, like in its recent deal with Major League Soccer. That isn’t possible with the N.B.A.
Amazon and NBC are attractive partners to the N.B.A. for very different reasons.
For a generation, most N.B.A. games have been watchable only with a cable package. But the collapse of the cable bundle — from around 100 million households with a cable package a decade ago to around 70 million today — has made old-school broadcast networks, the most widely distributed television channels, more attractive. With CBS and Fox as unlikely bidders, the league could want games to be shown on NBC’s broadcast channel.
As for Amazon, it is seen as highly unlikely that the N.B.A. — a league that is proud of being forward-thinking regarding technology — would sign a new rights agreement with only traditional media companies, according to some of the people familiar with the negotiations. Amazon has long been interested in broadcasting the N.B.A., according to a person familiar with the league’s negotiation history, and it has won plaudits for how it has handled Thursday night N.F.L. games.
The media and technology companies declined to comment for this article. CNBC, Bloomberg and The Wall Street Journal have all previously reported on parts of the N.B.A.’s media-rights negotiations.
The league has a number of other media assets it could leverage. Most N.B.A. games are not shown nationally. Instead, they are broadcast in their local markets, with individual teams controlling the rights to sell those games. Teams have traditionally sold those rights to regional sports networks, but those are collapsing, leaving teams looking for alternatives.
If Diamond Sports, which is in bankruptcy proceedings, collapses, the N.B.A. could suddenly regain control of the local rights for about half the teams in the league. If that happens, it might sell some of those rights to a national partner. But that would require the league to work with its team owners — as well as current rights holders — for the complicated task of navigating roughly 30 different local agreements.
It would also leave out a number of high-profile teams, like the New York Knicks and the Los Angeles Lakers, which have long-term local rights agreements with successful regional sports networks.
The N.B.A. could also sell some international rights. The rights to show N.B.A. games in some basketball-mad countries like China could be extremely valuable, especially as domestic streaming companies seek new markets. But the league — unique in American sports in that it sells all its international rights directly rather than working with third parties — is seen as more likely to sell those rights country by country to the highest bidder.
The real wild card if the N.B.A. looks to do something groundbreaking could be its old stalwart: ESPN.
Disney and ESPN executives have spoken in recent months with private equity firms, tech and mobile companies and sports leagues, and have concluded that if they are to give up equity, it should be to a league, or leagues, as part of a long-term partnership, according to two people familiar with ESPN’s plans.
Analysts have valued ESPN at $25 billion to $50 billion, meaning a potential partner would have to trade billions in value for even a small stake. While a partner could pay Disney for a stake in ESPN, what the company is really looking for is exclusive content, some of those involved in the negotiations said.
Disney executives have spoken with a number of sports leagues, including the N.B.A., about selling them equity in ESPN and what the company would want out of such an arrangement. According to one of the people, the benefits sought by ESPN in a partnership could include more closely integrating a league’s social media operations with the network’s, content like documentary rights and more in-game audio from players, distributing games it does not have the broadcast rights to within its apps and working together on marketing.