Thanks again for the great sports business questions. As always, I answered those I could and picked the best question from topics that got multiple, similar submissions. Questions have been edited for clarity and length. Let’s dive in …
How long before Apple and Amazon become the main two streaming/content delivery platforms for sports? Both could buy all live sports rights tomorrow and have blank cheques for other content! Is it only a matter of time before the others all crumble? Or will we always have to have a Netflix or Disney+ along with either Apple or Amazon Prime?
— Alex M.
We’re still in streaming’s infancy, so there is room for all of them right now. I do expect consolidation eventually across the streaming world, just like we saw with linear TV and cable over the decades. It also depends on the appetite for anti-trust regulators to police streaming. Buying every sport would make for a monopoly, and also would be unrealistically expensive – beyond the means of any company. The sports don’t want to be all bundled together, either.
Based on market cap, both the Fox and CBS broadcast networks look like potential merger and acquisition targets. There has also been speculation that Comcast/NBC and Paramount/CBS could be potential merger partners – with one of the broadcast networks having to be divested. Could you see Amazon, Apple, or Discovery/Turner/HBO trying to acquire a broadcast network? What would the implications be for sports?
— Robby W.
If the price is right, and regulators don’t kill it, I don’t see why tires wouldn’t be kicked on such a deal. For sports, it could mean the field of potential rights bidders is reduced, but also that a combined entity may have more leverage for enormous spending. Consolidation and M&A have been part of the media universe.
Does HBO release ratings numbers? If so, how is Game Theory with Bomani Jones doing?
— David C.
Numbers pop up here and there, and are often cited by agenda-driven culture warriors, but viewership is only part of the equation for subscription networks like HBO. It aired late on Sunday nights, so it doesn’t surprise me to see numbers under 100,000. Here’s what matters for now: It’s been renewed for a second season.
Sounds like Netflix is going to start cracking down on password sharing (although I don’t know how this will work). Do you see this being commonplace going forward with streaming platforms? Secondary thought: Does password sharing factor into ratings?
— Andy J.
Password sharing crackdowns get headlines, but that’s not Netflix’s primary business problem. Losing subscribers because it isn’t matching the must-see TV of its rivals is a bigger issue. Price hikes don’t help, either. Netflix knows how many people are watching a program, and it sometimes discloses that information. Nielsen uses its panels to track minutes-viewed streaming for Netflix and a few other services such as Amazon Prime Video, Disney+, Hulu and Apple TV+. That said, streaming companies themselves have the fuller metrics. But remember, Nielsen has demographic data that the streamers and networks do not, which is why it’s numbers are used to set advertising rates.
Why does MLB continuously screw over fans willing to pay money by blacking out games or having them on Apple/Prime instead of trying to find new customers that aren’t going to spend money? How is this a viable long-term plan?
— Matt W.
MLB doesn’t produce any games itself. The national networks and regional sports networks do that under broadcast rights deals. Exclusivity is part of that, despite angering same fans. Why? Cash. RSN deals are the lifeblood of these teams, even if the model is creaky. Until that system is replaced – and eventually I think it will be – this is the reality. As for streaming-only games, leagues and partners like Apple and Amazon are toe-dipping in what they see as the likely future of live sports consumption. Making fans pay for streaming is one way of accelerating that future (in theory, at least).
Seems like this new NHL TV deal is working very well as far as viewership and content. Seeing all the content on ESPN and Bleacher Report is awesome! Do you believe this growth of NHL viewership is going to continue?
— Aron B.
Getting past the pandemic certainly helped return audience numbers to familiar levels. NHL metrics will remain positive as long as the network and content partners handle their end of the deal. Do I expect radical gains? No. But any gains these days are a positive because the normal has been flat or worse.
Any chance YouTube TV adds regional sports networks as an add-on tier?
— Matthew P.
RSNs seem like they’re constantly on and off platforms amid money bickering. They biggest RSN group – Bally Sports, owned by Sinclair – has been off YouTube TV since 2020. It’s unclear if either side thinks a premium tier of RSN channels would made sense financially.
Any news/updates on what’s going on with NBC Sports/Bally Sports RSNs supposedly getting into streaming?
— William F.
Bally Sports owner Sinclair last week said it plans a summer soft launch of its new streaming service, with rights to all NBA and NHL games plus five MLB teams (Tigers, Royals, Marlins, Brewers and Rays). Full launch in the fall, priced at $20 a month. As for NBC, last I heard is that it’s still number-crunching the business model of a streaming service for its six RSNs.
My parents use YouTube TV out of Scranton, Pa. They get NBC Sports Philly, but sometimes games are blacked out that are available for cable subscribers. Is there a difference between cable and YouTube TV rights for RSNs?
— Jon R.
The parent companies of the RSNs have to negotiate carriage rights with providers, such as cable companies and streaming services. The RSNs produce the games. Streamers and cable companies have to buy the rights to the games, and those deals typically include exclusivity language. Rights talks often are fraught because of rising prices, especially for consumers because the broadcasters and streamers don’t want to pass along big cost upticks that anger their subscribers.
More entertainment platforms are trying out a free (or at least cheaper) ad model with their services. Do you think sports platforms will ever lean in that direction?
— Anil S.
If the owners of any platform believe they can maximize profit with a mix of ad-based free or low-cost tiers and ad-free tiers at a higher price – I’m thinking NBC’s Peacock as a prime example – they’ll do it. Streaming is still so new, and mostly unprofitable at start-up, that we’re in a Wild West era. Everyone is still trying to figure out what works, and what may be profitable for one type of service or platform may not work for another.
How much will the bidding rights for Big Ten football TV this year affect the bidding rights of Pac-12 football TV rights next year?
— Joe D.
They say a rising tide lifts all boats.
What are the chances that all the major sports networks get together and build a sports-only streaming platform?
— Matthew W.
Zero. Or very close to it. Live sports rights are extremely valuable, and I cannot envision the networks being interested in sharing revenue at that scale. Intriguing idea, however.
This is a niche one, but the Kentucky Derby did pretty large ratings last year if I recall. Given how much networks desire live sports, and gambling’s growing popularity, could we start seeing large TV deals for horse racing?
— Dilan L.
The Triple Crown races, in particular, are going to get bigger and bigger deals. Not just because of viewership, but because of legalized sports gambling’s national growth. Because they’re one-off events and not a league with many games, the rights fees are not the astronomical numbers we see for the NFL, but they’re gaining. Fox is reportedly seeking to out-bid NBC for Belmont Stakes rights at $5 million a year plus millions more in corporate sponsorship and wagering ads. If the networks think they can spend more to earn more, races beyond the big three will benefit, too.
Will cord-cutting eventually be seen as a disaster for sports fans?
— Matt M.
If it continues and we see tens of millions more households drop cable/satellite bundles, then yes, at least for the sports that rely heavily on local broadcast rights. That’s MLB, NBA, NHL. Hence, you see everyone getting into streaming and related business efforts — data, gambling, NFTs, etc. That said, some in the TV industry think cord-cutting may be near a natural bottoming-out, so there’s time to push consumers toward streaming. And don’t forget, the cable bundle still generates billions of dollars. Streaming is not there yet and isn’t profitable for the networks.
What is the future of CBS Sports Network, given the relatively low-profile events they have and Viacom-CBS’s focus on Paramount+?
— Jim S.
My guess is it folds into Paramount+ or perhaps a new CBS Sports sports-only streaming app. Or it follows NBC Sports Network and is simply ended, with its content moved elsewhere.
Is there any positive spin to Major League Soccer’s national TV ratings?
— Adam A.
Viewership is only part of the story. Ratings exist for networks and leagues to monetize programming with advertisers. That’s important! So is building future viewership among young people. MLS is in the home stretch of its next rights deals and has a lot of options. Problem is, unlike the other domestic major leagues, MLS faces competition from the Premier League and Liga MX, which have much bigger U.S. audiences. That said, MLS will get a more lucrative round of rights deals. Just maybe not as much as it wants.
Thoughts on the NBA Top Shot collapse and whether collectors will see a rebound?
— Jaideep K.
The massive early sale/resale numbers last year were unsustainable, but that early NFT success sure did catch the eye of every sports league, team, player, executive, coach, ball boy, etc. Sales are driven in part by NBA Top Shot’s product drop cadence, but I cannot fathom it getting back to the early 2021 sales figures. The more I’ve learned about sports collectable NFTs as a technology and consumer product, the more it seems like a bubble that was partly inflated by the pandemic era and the ongoing sports collectables boom. Artificial scarcity carries you only so far. I see them now as Beanie Babies – the boom is over, but a niche of devoted collectors will buy and sell ‘em.
What is typical minor league ownership cost in a small baseball team, i.e. Single-A or independent leagues?
— Ryan K.
From what I have been told, an affiliated low-A club is going to cost single-digit millions to buy, depending on location/market, while indy teams go for around $1 million to more than $10 million-plus. Bargains can sometimes be found, and sometimes they sell in multi-team deals. Operating costs vary. Affiliated teams have their player payrolls covered by the parent MLB club.
As regional sports networks get more and more expensive for both consumers and operators, is there a chance that local games for MLB/NHL/NBA/MLS will be on broadcast, or will they mostly just move to streaming if they ever leave cable? And would either of those options (local broadcast/streaming) give any cost advantages to make them more viable than the RSN models currently are?
— Vasav S.
The whole TV industry is evolving in a way we’ve not seen since the rise of cable in the 1970s and ‘80s, only faster. Networks and streamers are gobbling up live sports, but I don’t see any way for the big inventory sports – MLB, NHL, NBA in particular – moving much to broadcast TV. The leagues have their lucrative national broadcast deals, so the logical landing spot is streaming if cable continues to lose eyeballs. The bigger question is, will younger people consume live sports streaming in numbers and minutes-watched to replace the RSN revenue. Right now, no. Not even close. Streaming isn’t profitable because it’s still a start-up. But at some point, that’s how we’ll all consume programming, I believe. Nothing is going to get cheaper for consumers, however.
I know it’s a pipe dream, but is there any movement towards an NFL+ or NBA Prime or something where I could pay $500 for me and a couple buddies to get access to everything for one sport? Is this something leagues would ever want? Also, what is your favorite ice cream flavor?
— Daniel J.
My gut says no, but we live in a chaotic era for TV, so I don’t rule it out entirely. Exclusivity within rights deals remains a thing. The leagues want whatever will make them the most money while pissing off the fewest consumers and partners – the platonic ideal that’s rarely fulfilled. Mint chocolate chip.
What do you think of the NFT card market? Here to stay or a waste of time? And do you collect?
— KC F.
Digital cards will remain with us and have proven popular within video games. The NFTs like NBA Top Shot will have a niche market, but I don’t know what that will look like. The environmental concerns remain, as does the criticism that many such cards are valueless (for speculators) and are a bit of a pyramid scheme. I collected football cards around 1990-92 as a teenager, then got away from it. Today, I have a few oddball cards with some meaning to me personally, rather than investments. On my desk is a Topps custom card of my cat and a 1999 Fleer/Skybox autographed “Babylon 5” card of the late writer Harlan Ellison.
Any chance the Charlotte Hornets and Carolina Hurricanes get off of Bally Sports? Can the ACC for the love of God remove its content? Why be connected to a network that doesn’t distribute to most regional subscribers?!?
— Andrew P.
They have contracts. Teams will switch providers if there is a better option that pays more. But we see teams do deals for bigger money with less coverage, too, which is not fan-friendly. I expect a broad shakeup of the RSN business over the next decade.
This is a half rant and half question. But the Masters had its Saturday and Sunday morning coverage on a streaming app. So Tiger Woods was playing live rounds at the Masters, and it essentially wasn’t on TV. I get that media companies want to build value in their streaming apps, but at the same time networks always complain that nobody watches live TV anymore. And here you have a live event that people want to watch, and they put it behind a paywall. I don’t get it.
— Jim R.
The free Masters app is how I watched this year – it’s excellent and I wish every sport had something similar. As for this year’s tournament, Tiger was on as much as they realistically could focus on him, but he wasn’t really in true contention on Sunday.
How much money would an average MLB team lose playing a weekday day game versus a weekday night game? I firmly believe baseball is meant to be played in the sunshine. I also think there is a greater chance for kids to watch day games, particularly during the week, than night games.
— Adam W.
The Cubs added lights at Wrigley in 1988 for a reason. MLB today generates most of its revenue from local and national TV deals, with game-day revenue (tickets, concessions, etc.) accounting for much less of the cash pie than it used to. But you still want the full stands on TV, and you want to appeal to kids, so in the spring and fall, that’s tougher to do on a weekday. It also depends on the market – do you have a sizeable local fan base that has enough fans off of work during the day to come to games?
Any update on direct-to-consumer in-market streaming for MLB?
— Brooks P.
I’ve heard nothing new in a while. The clubs have their local RSN deals – Sinclair’s Bally Sports+ streaming service will have five MLB clubs when it rolls out this summer – and those contracts have exclusivity aspects. How MLB and the RSNs resolve that, I don’t know.
If an eccentric almost-trillionaire decided to overpay to buy the whole NHL, how much is the accumulative value of the league and would a bid of 50 percent above market value be enough to pull it off? And dare I ask what might be the consequences? Please ignore league bylaws that would prohibit it. Let’s assume money talks, bylaws walk.
— Allan K.
The Forbes NHL valuations put the 32 teams at about $28 billion in combined value. Add in real estate, league-level deals, other media and data and gambling rights, various IP elements, etc., and I think we’re talking about $100 billion. Maybe twice that? It’s an interesting thought exercise in our current Gilded Age 2.0. Is the NHL then functionally a single-entity structure like MLS but with one rich weirdo in charge? I see lots of pitfalls when the whims of one oligarch are all that matters.
What are your ratings predictions for the Stanley Cup Playoffs?
— Aliyu S.
Better than last year. Per Sports Media Watch: “The first two nights of the Stanley Cup Playoffs averaged 610,000 viewers across ESPN and ESPN2, up 15 percent from the equivalent nights in 2019, the previous postseason under the league’s normal format.” That’s a good sign.
Does attendance matter for the USFL?
— Iris L.
Not in Year 1, and not until the teams move into their home markets. Certainly, it doesn’t look great on TV to have mostly empty stadiums, but this was a calculated move by league owner Fox Sports and partner NBC to control start-up costs. You cannot fault the people of Birmingham for not packing the stadiums for 44 games. This is a made-for-TV product.
Why is Josh Pate not college football commissioner yet?
— Noah T.
I don’t know but my two thoughts are:
- That seems like a job in which everyone hates you. Like, really hates you.
- There is no such job. Conferences have commissioners.
At what point does ESPN abandon the cable bundle and have a real streaming channel that includes football and basketball live games? And what is an estimate on what that channel would cost?
— Chris P.
The bundle still pays the bills, so not any time soon. You couldn’t realistically price it at scale to make up for the lost cable subscriber fees.
Is it just me or are there more commercial minutes per hour than ever before during the NFL Draft? At times it feels like on ESPN they’re barely devoting time to discussing teams, picks and players.
— John H.
Everyone hates advertising, John. It’s a necessary evil. With the draft, commercial airtime can vary because of the pace of the picks, trades, etc.. It feels worse when your team is about to pick.
What metrics do ESPN+, Peacock, Paramount+, and so on use to evaluate sports properties? Are they just looking at traditional viewership numbers like on linear TV, or do they try to determine if a property attracts/retains subscribers who wouldn’t subscribe otherwise?
— Robby W.
Great question, and I wish I knew the complete answer but internal success metrics – from raw viewership numbers/minutes consumed to subscription rates, engagement and more esoteric goals – are generally part of a wider equation that remains proprietary.
Do you see a streaming service partnering with Fox for Big Ten or other CFB rights, since Fox doesn’t really have a prominent streaming service like ESPN, CBS and NBC do with ESPN+, Paramount and Peacock? Could an Apple or Amazon stream games that are simultaneously on Fox?
— Dan K.
Fox, which already is deeply embedded with the Big Ten, has made clear it’s not getting into the live sports streaming/cash-bleeding chaos right now because it believes it can enjoy more money and eyeballs with linear TV, but I expect that to eventually change. The network isn’t putting sports on its ad-supported Tubi streaming service, and it appears Fox will wait for the streaming market to settle a bit before launching any sports streaming product of its own. It could strike a partnership deal with a streamer, particularly as sports leagues and organizations seek out that audience.
Are these deals that MLB is doing with Apple+, YouTube, and other platforms actually paying off? I’m guessing it has to do with reaching younger viewers, but is there any sign that it’s working?
— Sarah H.
These are long-game plays, with profits less of an immediate goal than building viewership where younger people opt to consume live sports. Some of these deals will work, some will not. Too soon to judge.
Multiple people have brought up Bally’s. We don’t have them in Jersey which is probably good because they seem to be much hated. Are they the same company that owns the Atlantic City casino?
— Rick T.
Bally’s Corp. bought the RSN naming rights in 2021 but does not own the sports networks. They’re owned by Sinclair Broadcasting Corp. Bally Corp. is the same company that owns Bally’s Atlantic City. The Bally name goes back to a 1930s pinball maker, and the name has been sold a few times – making it especially confusing on who owns or owned which Bally entity.
How does MLB overcome the hold that RSNs and cable have on the broadcasts, allowing MLB.TV to truly emerge into the streaming era (without blackouts)?
— Jason M.
MLB would have to acquire all of the team-level streaming rights from the RSNs and figure out how to replace that critical revenue. Right now, a full MLB streaming service for all in- and out-of-market games couldn’t be retail priced and scaled to replace that money. MLB also would have to either produce the games itself or hire third parties to do it, adding additional costs.
Will minor league baseball games ever be nationally broadcast? Maybe one showcase game a week on ESPN?
— Dan G.
CBS Sports Network has carried some minor league games in the past, and they’ve been shown during MLB work stoppages. MLB Network occasionally airs them, and there’s the subscription MiLB.TV. The Triple-A championship is on national TV. If ESPN or another network or streamer can strike a deal that meets its needs, I don’t see why not.
(Photo: Kyle Rivas / Getty Images)