Big Time Sports are Finally Rotating Away From Cable to Streaming
And rerouting billions in rights deals
NBA fans have many ways to watch the action during the ongoing NBA finals. The broadcast rights are split between TNT, ESPN, ABC and the NBAs own channel, NBA TV. Think of this structure as a last gasp of the old way of distributing big time sports content.
LA Clippers superfans are having a look at the new way. Launched last fall, LA Clippers now have their own streaming channel, Clippervision. Clippervision subscribers can pick between six streams including special commentary, enhanced stats and graphics, or even a Korean language version of the games. Clippervision is a paid subscription costing a few hundred dollars per year.
In 2013 there were 100 million households on cable, each household paying ESPN $7 per month whether they wanted to or not. In addition to ESPN’s national network, there are dozens of regional sports networks (Bally, Root, Spectrum…) also getting between $5 and $7 per subscriber in their regions. This flow of cash enabled the networks to pay sports leagues big money in exchange for exclusives. But those exclusives prevented the games from being streamed on the internet because the cable money was so easy, the sports leagues had no reason to try new things.
But now that the cable bundle is unbundling, everything is changing.
From its peak in 2013, cable subscriptions in the US have fallen from 100 million to 60 million and are expected to decline further to under 50 million within three years. So, 50 million households that used to pay about $20 per month for ESPN and a couple of RSNs are now routing around the cable providers and the legacy sports networks are no longer getting about $12 billion per year.
The big streamers are all in and are buying up the rights. In September ’22, Amazon did a deal with the NFL for Thursday night football, then Apple signed up Major League Baseball, and in December, YouTube bought the rights to the NFL’s Sunday Ticket package of games. All together, the streamers are expected to pay over $8 billion for sports rights in 2023.
Not to be left out, NBC is trying to win back the NBA for the next rights cycle in 2025. Some think it could be a $75 billion deal.
Moving sports from broadcast to streaming does not mean viewers are going to escape paying. Amazon, Apple, and YouTube are all charging for their services. But this migration to digital will unlock innovation so fans can watch from anywhere, get enhanced content, buy merchandise, and find new ways to engage.
Following fast behind this will be thousands of long tail streaming offerings and gaming. We will dig into that tomorrow.
Links and Resources
More about streamer deals: https://www.tvtechnology.com/news/streaming-services-to-spend-dollar85b-on-sports-rights-in-2023
NY Times on the YouTube Deal: https://www.nytimes.com/2022/12/22/business/youtube-nfl-sunday-ticket.html
NBC wants the NBA back: https://www.sportspromedia.com/news/nba-tv-broadcast-rights-2025-nbc-sports-bid-espn-turner-disney-apple-amazon
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