In sports, one person’s greed is another person’s sound business decision. So, while greed may ultimately determine how many top-tier sports events move to cable, making
money generally is not a crime.
A harbinger of the balance could come as the NBA negotiates its next TV contract, where ESPN and Turner are the incumbents. Nearly all playoff games are on cable, though the finals have remained on ABC.
If ESPN offers the NBA substantially more to move them off-broadcast entirely, will the league say yes? Or, would it forfeit the dollars as sort of a public service, keeping them available to all TV homes. Yes, there are still millions of Americans who don’t have cable.
(Offering the finals on ABC does have a marketing advantage with the wide reach, so it’s not a total sacrifice.)
But if it’s not ESPN tempting the NBA, would Turner or even Fox Sports 1 offer it too much to turn down? Sports owners generally aren't ascetics. Nor should they be, they have invested heavily to get into the game.
The way things are going, all of the blue-chip events may be on cable by 2025, save the Super Bowl and the Masters final rounds. (The NFL doesn’t want Congress blasting it for depriving so many Americans of a virtual national holiday. And Augusta National may be too rich to even contemplate a move.)
Having Fox Sports 1 and a Comcast-enriched NBC Sports Network eager for content further shifts the balance of power in sports negotiations to the leagues and other rights holders. Assuming cable networks are willing to offer them more than broadcasters, it will be up to them to decide where bottom-line interests start and end.
So far, ESPN and Turner have led the cable-only movement. The college football championship, British Open and Wimbledon finals are on ESPN. A baseball Championship Series is on Turner each year. (For now, the World Series remains on Fox.)
In the last few weeks, the shift to cable-only has accelerated. First, TBS became the home of the Final Four semifinals two years early. On Thursday, word came ESPN had secured rights to all the U.S. Open tennis tournament matches, two years after it made a similar deal to land Wimbledon.
Tennis events may not have the viewership of football and baseball, but the U.S. Open and Wimbledon have long histories on broadcast TV. With the Open, the change was illustrative of how much money can play a role.
The United States Tennis Association (USTA), which owns the Open rights, is undergoing an expensive remodeling of the tournament grounds. Under the deal with ESPN, it will receive some $30 million more a year than the current deal, according to Sports Business Journal.
On a conference call, USTA COO Gordon Smith said regarding the TV money for the project: “It’s very important. Stability going forward with the preeminent sports media outlet in the country is huge. It really gets us in a very stable position as we go out and start making the changes in the facility.”
USTA Chairman Dave Haggerty was asked his thoughts about ceding broadcast distribution. “We gave it a lot of thought,” he said. “I mean, it's a 46-year relationship and partnership we've had with CBS and broadcast. We certainly went through a lot of internal discussions. We had very good conversations with CBS. As we went down that path, we realized that we really weren't able to come to a mutually agreeable solution. We then began to explore some opportunities externally.”
It’s no secret why cable networks can offer more money than broadcasters: affiliate fees. Looking for a reason why Turner is taking over Final Four games next year instead of the expected 2016? It has a round of negotiations with operators upcoming and that offers leverage.
Broadcasters could increasingly garner similar revenues with growing retransmission consent payments. But with the threat posed by Aereo, an online streaming service, executives have suggested Fox and CBS may become cable networks.
Unlikely, yes, but sports leagues thirsting for even more money have got to be hoping for it. The two networks would have more cash to spark bidding wars.