Commentary
Is Fox Right -- Sports TV Is The Future?
- by Wayne Friedman , Staff Writer, February 14, 2018
Big sports TV franchises are costly -- think the NFL and the Olympics.
For many networks, it is worth it. NBC will prove it with one simple number. For the first time in 16 years, NBC is the No. 1 network for total average viewers in a specific week. CBS has been the reigning champion when it comes to total TV viewers.
NBC did this because it had the Super Bowl four days before the start of the Olympics. Even with both stellar events, NBC just edged out CBS for the most recent week ending February 11: 9.56 million to 9.38 million.
Mark Lazarus, chairman of NBC Broadcasting & Sports, reckons the network will do this again next week, partly because the Olympics runs 16 days.
But if you took sports programming out of the picture -- just analyzing entertainment and other non-sports programming -- things would be different. NBC would be behind CBS by 1.9 million viewers.
advertisement
advertisement
In this regard, consider Fox’s move to secure more “Thursday Night Football” -- 11 games per season for the next five years. For the last two seasons, CBS and NBC shared those games — with the NFL Network simulcasting all of them.
Pretty good deal? All NFL programming has seen around a 10% decline in viewership. The answer is that everything is relative -- the weakest NFL series still bests virtually all other TV.
Dig deeper. Before Fox’s deal to secure “TNF,” it agreed to sell about half its TV/entertainment businesses to Walt Disney for $52.4 billion. The reason: It wanted to focus on national TV sports programming, as well as news programming for its Fox News Channel and Fox Business networks.
Would it make sense for other big TV networks to follow Fox’s lead, trimming some holdings to focus more on sports?
If so, it would drive license fees for sports TV programming even higher. All major media holding companies -- Comcast Corp., Walt Disney, and CBS -- already have significant sports TV programming.
NBCUniversal has a major long-term commitment with the Olympics and the NFL; as well as its sports cable NBCSN network; and its partnership in the Olympic Channel in the U.S.
Walt Disney, with ABC and ESPN, has the NBA, College Football Playoffs and “Monday Night Football.”
CBS, which will get bigger with a Viacom re-merger, also has the NFL on Sundays, as well as the monthlong NCAA Men’s Basketball Tournament (shared with Turner networks).
Given that, there doesn’t seem to be much room to grow -- at least with big sports franchises. With continued fractionalization of media, and the need to grow bigger quickly, what can a single TV network do?
Whatever it is, it might become ever more valuable -- from a marketing point of view -- to call yourself the most-viewed TV network. Bottom line? Networks hopes to get to bottom of this.
Wayne Friedman is West Coast Editor of MediaPost. You can reach Wayne at wayne@mediapost.com.
The answer for TV networks is to take viewers on a Super-Fan Journey. They will need to engage viewers for free with short form video on ad-supported social plats. But they also need to develop premium ad & ad-free platforms to their most avid fans. Just as dynamic ticket pricing yielded more Ballpark revenue for MLB teams, so too can TVE offers become #TVEplus offers, and the unbundling of TV can be a win-win-win. Want to learn more about what sports fans want? RingDigital.tv/Sports
Wayne: Don't you think there's too much supply-side fragmentation already? Rising rights fees, rising re-trans fees (masked in subscriber total package costs)...in the face of video sub defections, lower broadcast ratings, lower stadium ticket sales, seasons stretched beyond rational lengths, consumer push back on pricing and so on...doesn't seem like a sustainable business model in the longer run.
As you argue, take sports out of network numbers and broadcast TV's world doesn't looks so good...same likely holds for other platforms...examine the numbers when live games aren't on the sports nets.
Further segment the sports audience base into categories such as : anything-sports loyals, individual sport loyals (NBA, NFL, NHL etc), team/franchise loyals etc. and wrap in team win/loss performance, geographic differences, demo differences (Boomers vs. GenZs), clutter...etc. etc. and you have a looming cloud of make-good hurt.
I get the supply and demand argument in terms of rights fees, CPMs to reach males, brand prestige value and the like but a tipping point isn't as far away as it was five years ago.
What's Ed P. think?
James, I don't think that sports is "the future" of TV. First, and contrary to the publicity, the typical adult does not devote an overwhelming amount of TV viewing time to sports---it's well under 10% taking all dayparts and channel types. Second, sports is not a huge money maker for the TV networks and cable channels as its very high rights costs cant be amortized by rerunning the games over and over again, as is so common with other TV fare. So sports is actually a loss leader in terms of profitability. It's primary plusses are significant station spot sales for network affiliates, its perceived "value" in terms of garnering lucrative re-transmission fees, its image enhancing benefits and, finally, its ability to draw ad dollars from advertisers who would normally not be interested in other types of TV content---or much less so.
While the emphasis on average minute rating declines and aging viewers is largely misplaced---as sports is not a by-the-numbers buy-----I can see a time where there are so many unimportant games glutting the various channels---all designed to give the athletes more and more money---that new business models will need to be developed to avoid huge and unsustainable doses of red ink for the networks and cable channels. These will, no doubt, involve a combination of subscription and ad incomes, as the latter's CPMscan't keep rising out of control forever.