Sports on television is a big deal for media
companies -- the NFL, NBA, Major League Baseball, and Nascar.
Should networks and streamers move deeper into sports?
Perhaps. The problem is that higher sports TV rights fees -- as the
recent NBA deals have highlighted, and the NFL before that -- can be crazy long time-cost issues for media owners.
Warner Bros. Discovery, on its departure from the NBA after this season, now
has a different -- and perhaps more negative -- view of those acquisitions.
WBD can save around $300 million in annual sports costs (not including the Olympics).
WBD has ended its
longtime NBA franchise on TNT and on its other owned cable networks. Company executives say: “In the end, sports is a rental game.” That is, making
movies and TV shows -- and owning them outright -- is the best way to go.
advertisement
advertisement
Still, Robert Fishman, media analyst of MoffettNathanson, cautions: “At the same time of ongoing macro
uncertainty, sports seems to be the last stabilizer for linear U.S. advertising. So we will watch the downside risk here closely.”
High-priced sports TV content is a habit that is hard
to break -- specifically, major sports franchises like the NFL, NBA, and MLB, which consistently attract large audiences.
For example, the NFL posts an average 16.5 million viewers per game --
on average. That’s crazy high when compared to average, live prime-time TV entertainment.
Increasingly, media companies are looking to amortize that high ‘rental’ cost across
all their "owned" content. That’s where some leverage and packaging comes into play with advertisers.
And that brings us to the upfront. Sports TV media deals had been fully negotiated
outside the upfront advertising sales period -- almost as a specialty market.
These days, sports media agency deals can be worked on during the regular upfront ad-sales process.
Up
until recently it might have been hard to find bath and kitchen advertising in sports.
These days, it’s different. Procter & Gamble’s Swiffer, for example, has run campaigns
during the Super Bowl pregame show. P&G is also a Worldwide Olympic Partner and has been since 2010, with activations during the 2024 Paris Olympics.
At the same time, many sports TV
brands are continuing -- perhaps increasing -- media buys. Some of those endemic brands include theatrical movies, streaming platforms, mobile phone service, alcoholic beverages, snacks, restaurants,
financials, and pharmaceuticals.
No doubt, linear TV must be thankful for sports TV when it comes to the desire for more live TV -- for consumers and brands. Let’s not forget that it
also helps networks/streamers for viewers to stick around to take in lots of network TV show promotional messaging.
So what’s the next step? To build out more sports-related programming
for those with existing live, linear TV networks (broadcast or cable)?
Could that mean sports highlight shows... and legal wagering/gambling programs?
But what about buying a sports
league? Ownership seems a logical direction.
Who wants to be a “renter”? Buy a house.