Diary of a Sports Cord Cutter: Carnage and Opportunity

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.

Diary of a Sports Cord Cutter: Amazon Enters The Game

 By Brad Hubbard | @bradhubbard | 11.23.2016

When Amazon.com enters a market, it usually wins. As it’s founder, chairman and CEO Jeff Bezos once said, ‘your margins are my opportunity’. Well now it’s become clear that they are going to enter the OTT live streaming sports realm one way or another. It’s been reported off and on for a couple of months now and it appears that Amazon is very, very serious about getting into this space and it could be a benefit to the cord cutting community if they do.

AmazonAccording to an article in the Wall Street Journal, Amazon.com made a play to be the sole provider of NBA League Pass. The NBA eventually passed on the idea and so did the NFL when it gave it’s live streaming rights for Thursday Night Football to Twitter. Now Amazon.com appears to be going after less ‘mainstream’ North American sports. Things like the Cricket Premier League and rugby.

This is good news for sport cord cutters. Amazon.com has a history of eating costs for the long term benefit of having you buy more stuff because you are a Prime member. That means that odds are if Amazon.com is able to bag an MLS or NBA or NHL package, it would probably be included your Amazon Prime subscription.

Think about that for a minute. If you live in Chicago and you are an LA Lakers fan, you could see the out of market games via your Amazon and not pay anymore because you have a Prime account.

This, I believe, is far off. I think a closer more appropriate strategy for all parties involved is for Amazon.com to go after the college conferences. For example,  ACC, Big Ten, Pac 12 and Mountain West. These conferences pretty much own their rights, especially the Pac 12, to cut deals beneficial to them and not college football as a whole. Most have signed new deals with the major broadcasters in the past few years but that doesn’t mean that there are not ways for them to join forces with Amazon.com barring the price is right.

Another possibility is that Amazon becomes a MLBAM (BAM) competitor. While I don’t believe this is the case it’s certainly a possibility. Amazon has the backend that everyone uses, Amazon Web Services (AWS), and probably the best, cleanest user experience on the web in Amazon.com. Question really becomes, do they want to go this route because if they do, BAM and NeuLion should be worried.

The fact is that if Amazon.com sets it’s sights on a vertical, it usually enters it and it finds a way to win or be a major player in the space. They appear to want to enter the OTT live streaming market and in a big way. They have the capacity and capital to make it work. It now seems like only a question of time.

 

Digital Consolidation

By Brad Hubbard | @bradhubbard


BAMIt’s been a busy couple of days in the digital sports world. First MLBAM (BAM) buy a part of Silver Chalice Ventures (SCV) who owns SportsLabs, ACC Digital Network and Campus Insiders just to name few. Then Fox Sports and SI decide to team up for an editorial/ad deal. Essentially, they will merge their traffic to sell. What does all this mean to you? Not much but it’s certainly interesting.

CampusInsidersThe SCV and BAM deal should, in the future, bring more confidence to the pessimistic folks who feel that live streaming isn’t stable enough. It also gives new BAM investors Disney another reason to possibly purchase all of BAM down the line.

The Fox/SI deal presents some interesting ideas. Two of the old media establishments partnering together in the new world. Funny because two of the better know personalities from these two organizations had a feud a few years ago.  

Consolidation is nothing new in business much less in media. It will interesting to see how this effects coverage, analysis and fans ability to see games on something other than their cable or satellite provider. Time will tell.

BAM is for Billions

By Brad Hubbard | @bradhubbard


BAMIt wasn’t a secret that Disney was looking to take a stake in MLBAM (BAM) but the end number may surprise some folks. According to Bloomberg Disney is buying 33% of BAM for $3.5 billion with an option to buy more in a few years. That is a valuation of over $10 billion. Not bad for an entity that doesn’t even turn a profit yet.

A few years ago Fast Company did a profile on BAM and within that article there was an estimated IPO price for BAM in 2005. That number was $2.5 billion so the company has essentially increased around $8 billion over the last 11 years. If you did some loose math based on that article you could see that BAM was more or less breaking even.

That’s not to say that MLBAM isn’t worth a $10 billion valuation. They are a white label solution as their CEO Bob Bowman would say. They are the streaming backend for MLB, WWE, NHL, Watch ESPN and have even done the Super Bowl. They made bets that paid off and with this purchase by Disney, it puts them in a position to stay in the lead when it comes to live video streaming.

Disney for it’s part made another shrewd investment. It’s no secret that their cash cow, ESPN, is having to adjust to the new realities of cord cutting. Enter an investment by it’s parent company and Disney has created an A to Z revenue stream when it comes to over the top video. It’s like selling the car and the gas that goes in it.

This is a very smart purchase by Disney. They have the cash to do it and it’s very well timed. It’s no wonder that the Disney board wants Bob Iger to stick around a bit longer. It will be interesting to see if BAM competitors like NeuLion look to cut deals or merge with CDN or network. In the meantime the only one doing better in this space is probably Amazon.com.

BAM

By Brad Hubbard | @bradhubbard


A few weeks ago I wrote a post about concurrent streams and MLB Advanced Media’s Bob Bowman. Bowman is a major player if not the major player in live streaming. So when he speaks, it’s important to listen.

Bowman touches on a lot of subjects related to live streaming but he also touches on social media, hiring and narratives.

Concurrent Availabilty

By Brad Hubbard | @bradhubbard


Bob Bowman knows his stuff. 

Bowman is the head of MLB Advanced Media (MLBAM for short or just BAM) which streams more than just baseball. They also handle HBO, WWE, NHL and others. So when he talks about the probability of a Google or Apple taking over the NFL’s Thursday Night Football (TNF) digital rights and delivering three to five million concurrent streams on a weekly basis, he is rightfully pessimistic.

Code Conference

Bowman is incorrect in one fact, someone has done a big number of concurrent streams before. The Red Bull Stratos jump a few years ago did eight million concurrent streams. YouTube did not say that these were all in the US which is why Bowman said that ‘no one has come close.’ No one has come close to doing it on a regular basis much less every Thursday Night.

It is interesting to note that one of the most influential people in streaming live events is saying that a tech company will not solely own sports rights any time soon. Looks like a semblance of the status quo will remain for quite some time

The Sunday: Glimpses of Hope

Nice Job Coach

Vancouver Whitecaps head coach Carl Robinson has done an outstanding job so far this year. The Caps lead the Western Conference with 42 points and this past week in a Champions League match against Cascadia rivals Seattle he nonchalantly just leaned forward and back heeled the ball back onto the pitch. Well done coach.

 

Bowled Over

The NE Patriots didn’t think defensive lineman Vince Wilfork had ‘it’ anymore. Well this video shows that they may have been mistaken.

 

History

Sam AlsMichael Sam made his professional debut with the Montreal Alouette’s on Friday night against the Ottawa Redblacks. While he didn’t record a sack – or even a tackle – history was made. The first openly gay professional football player on the field during a regular season game. Now it’s a matter of how long before he feels comfortable in the CFL game to make a significant impact.

The Switch

MLB Advanced Media (BAM) is getting the NHL in a move was announced earlier this week. That means that the live streaming once hosted by NeuLion is going to BAM along all the rest of the NHL’s media content. This includes the NHL Network and any NHL apps.

This is another big win for BAM who now handles the backend live streaming for HBO Go, WWE, March Madness, Watch ESPN along with MLB.TV.