Could Demanding Sports Leagues Give TV Networks, Streamers A Break?

Sharply higher sports leagues' demands and content owners' right fees may not be a forever thing.

Some TV networks/streamers have built in key business metrics to make sure they get their money's worth, especially for long-term future viability. 

Apple TV+'s recent 10-year, $2.5 billion deal with Major League Soccer seems to be one of those.

That deal is pegged to the potential upside of the streamers' subscriber  growth.

That kind of makes sense. But remember, this is Major League Soccer  -- not the NFL or the NBA.

A new Altman Solon study of 150 global sports executives said 85% are concerned that sports-rights owners (the sports leagues and teams) are not addressing media partners' needs -- needs that would seem to include better profitability, sustainability, for a strong business future.



For years, many TV networks may have overspent on high-priced packages from sports leagues -- the NFL and NBA -- at least in terms of resulting upside. 

Narrowly analyzing some sports deals can actually mean operating at a loss. 

But the umbrella effect of having a major sports franchise on one’s network or platform is still worth it when, for example, getting advertisers to buy into all its content. The high value of some sports can push consumers on a promotional level to other content.

Ask yourself why Fox Corp. did not want to overspend on “Thursday Night Football,” for example, for another multi-year package -- a deal that landed exclusively with Amazon Prime Video.

Somewhat clear consumer consumption/price equations then make sense in the new streaming world.

The study notes that for major sports leagues such as European football, and major U.S. sports leagues/associations, consumers are ready to spend anywhere from $20 to $25 a month.

Could Apple TV+'s  deal with MLS be the start of new thing when it comes to attracting and keeping new consumers -- especially as sports leagues continue to focus on the next generation of young viewers?

But... who is really going to play ball?

3 comments about "Could Demanding Sports Leagues Give TV Networks, Streamers A Break?".
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  1. Ed Papazian from Media Dynamics Inc, November 29, 2023 at 5:10 p.m.

    Wayne, this is a key point and needs some clarification. For many years the broadcast TV newkorks over spent on pro team sports to the point where they lost money on  many of these deals where the network  was concerned. However these  costs were accepted  for two reasons. First, because the network O&O  stations as well as their many affiiates made out like bandits selling local station break spots to banks car dealers, fast food chains and other advertisers who didn't mind the high CPMs demanded. Second, because the sports sponsorships attracted a kind of advertisier to the networks  who normally didn't spend heavily to  showcase their ads in other forms of TV content---news being an exception Thus, the networks savored the prestige  of offering sports and the promotional benefits of taking their best customers to the ball games and otherwise entertaining them. And the stations---including those owned by the networks----made the profits.

    The question now arises whether  the old rationale still applies in an era where linear TV viewing is fragmenting and many ad dollars are being allocated to streaming as well as high CPM but better targeted addressable TV buys. With news still demanding---and getting--- high CPMs and specials continuing to obtain premium oriented ad revenues---despite lower  ratings,  can the networks -- continue to pay the exhorbitant prices the player dominated leagues are demanding and offer these attractions to the public ---at a loss?Are there enough high CPM buyers out there to keep funding pro league TV sports at ever increasing spending levels---but with flat or declining ---and aging---audience levels?Or isn't it time that the leagues stopped assuming that the networks ---and their sponsors---will keep rolling the same old promotional dice forever? In short, must the leagues now develop a two-revenue business model with viewers paying much of the costs via subscriptions---plus ad reveunes obtained from "the usual suspects"?

  2. Ben B from Retired, November 29, 2023 at 9:31 p.m.

    TNF has been a flop on Amazon Prime and needs to also be aired on NFL Network live in my opinion I'll beat that dead horse into the ground. I think MLB could be the one that may do it with streaming as Bally Sports will be no more after the 2024 MLB where they'll have to make deals with pay-TV for the local teams along with the local CW'S or MYNet TV. MLB could go the MLS rout because that is nightly compare to NHL & NBA being only 2 or 3 games a week where that does better for the local TV stations for indies, MYNet TV.

  3. William Graff from beIN Media Group replied, November 30, 2023 at 11:01 a.m.

    NFL games offer 11 minutes of actual action in each 3-hr telelcast. All the US non-soccer leagues are already structured to maximize commercial avails, as well as in-game sponsorship value. Will enough casual fans who don't subscribe to full-season, full-league networks/apps shell out $150-250 per league/season to still sit through the same experience they now get free or included in their MVPD-provided package?

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