By Brad Hubbard | @bradhubbard | 5.23.2017
It’s what they call in Washington a ‘True Fact’ that cord cutting is affecting the sports world in a major way. North America’s biggest sport rights holder, ESPN, is front and center in this battle of the cord cutting and the traditional way things have been done. Subscribers are fleeing at a rapid rate (down 12% since 2010) and ESPN along with the sports leagues are trying to figure out how to stop the bleeding or profit from the change. While the traditional powers are nervous, small leagues and up and coming sports are rejoicing.
ESPN has spent billions on sports rights between the NFL, NBA, MLB, college football and others. To give you an idea of how much they do spend a year, they spend over a billion dollars on the NFL alone and they only get one game a week! With the old cable and satellite model being blown up, the network and the leagues are looking at every option available to them which is partially why ESPN’s parent company, Disney, bought into MLB Advanced Media last summer.
The NFL, MLB, MLS, PGA and NBA are already reaching out in different ways to get their live programing to their fans. Whether it is the NFL cutting a deal with Amazon or MLB and MLS signing deals with Facebook, the sports leagues are already preparing for the day when they see a decrease in the value of their sports rights. Gone are the days of multi-billion dollar deals for the exclusive right to show a sport. In the near future the leagues and big time college conferences will have to spread the costs among several outlets.
ESPN is approaching this transition a little discombobulated. The fact is that live streaming on platforms like Amazon, Facebook and Twitter will not replace the loss of dollars from the traditional cable/satellite/TV world. However, these new platforms are a life saver to niche or relatively new entities like eSports, MMA and others.
ESports were born online and are thriving on platforms like Twitch, YouTube and even Facebook. These OTT platforms are also paying a whole lot less for the sports rights than ESPN, NBCSports and Fox Sports are paying for traditional sports like the NFL and NBA. These new platforms also provide these niche or newer sports the right demographic and a ton of exposure.
What does this mean? A lot more exposure for League or Legends, Overwatch and even the UFC if they play their cards right.
Remember, these niche and newer sports and starting from scratch in a way. An mid eight figure deal for an eSports league or new MMA organization is a windfall for them. The same can be said for a non-power five conference like the Mountain West who floated the idea earlier this year of going to straight OTT model.
The fact is that Disney, Comcast, and Fox are unlikely to retract the amount of cable outlets they have. And if they are unwilling to play these huge amounts for the rights to the NFL, NBA and others then they’ll have to fill the hours on their networks somehow. That could give newer, cheaper sports entities like Riot Games League or Legends or the UFC an opportunity to swoop in provide quality content that pull desirable demos for a reasonable price.
The winds of change are upon the sports networks and leagues. You are already seeing layoffs because of these changes and you are going to see more. But these changes are inevitable and disrupting but not the end all be all. Opportunity does exist for the traditional sports networks and leagues but the have to accept the fact their options may not be as beneficial to them as things were in the past. For the newcomers, get ready for a windfall of money and a lot more exposure. Here’s to hoping that you know how to scale.