Tech Bidder Attracted To Fox's RSNs, Possible Platform, Sports Model Shift

While there has been speculation for years that a technology giant could swoop in and buy live sports rights, those expectations have been tempered somewhat in recent years. After all, the best rights are secured in long-term deals with TV channels well into the 2020s.

Despite a few notable exceptions, like Amazon’s deal to simulcast “Thursday Night Football,” and Facebook’s deal to stream some MLB games, sports rights, for now, remain primarily a TV endeavor.

A new report on Tuesday suggests renewed interest from at least one tech bidder, however.

CNBC reports that Amazon is among the bidders for the 22 regional sports TV networks being sold by Disney and 21st Century Fox. As the owner of ESPN, the Department of Justice required Disney to divest the RSNs that it and Fox own, in order to complete the Fox acquisition.

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To be sure, it is only the first round of bidding — round two will begin by the end of the year — but Amazon’s deep pockets and its early success with streaming sports are sure to make it a viable contender for the RSNs.

(The company touted its “Thursday Night Football” numbers last week.)

The possibility of Amazon buying the Disney/Fox RSNs raises other interesting opportunities, some of which were posed by BTIG analyst Rich Greenfield in a research note last month. In some ways, local sports rights present an even more intriguing opportunity than national sports rights. 

Greenfield suggested that while Amazon would be required to offer the YES Network (one of the RSNs) to multichannel video providers, once those existing deals sunset, it could change the RSN model entirely.

“What makes that so interesting to us is that diehard fans will find/seek out the content. If you are watching YES Network nightly to watch the Yankees, you will seek it out on Amazon,” Greenfield wrote. “Sports is tribal, especially on a local team basis. Shifting local content creates far less risk than shifting a national game to a tech platform, where you could lose a lot of casual fans. 

"More importantly, all of the shoulder programming needed to create a 24/7 RSN could be sunset as there would be no need to broadcast 24/7 the way there is in legacy/linear TV — a tech platform could focus solely on the game and pre/post-game shoulder content.”

Today, RSNs are driven almost entirely by the local live sports rights, and the pre- and post-game programming. The rest of their schedule is filler content. Amazon would have little need for that filler, and could focus on the games.

Will that be something that sports leagues are excited about? Or will they be threatened by it?

One thing is clear. As existing national and local rights expire, streaming sports will become more prevalent, whether driven by tech companies like Amazon or YouTube, or traditional media companies seeking to keep younger viewers in the fold.

And if Amazon ends up winning those 22 RSNs, it will immediately become one of the most powerful players in sports media.

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