Sinclair Broadcast Group CEO Chris Ripley said Tuesday that additional streaming rights deals for its upcoming direct-to-consumer RSN service could be coming soon, adding that he believes the company has enough content in hand now to launch the product successfully. 

Ripley, speaking at the Bank of America Leveraged Finance Virtual Conference on Nov. 30, said Sinclair is in “active and ongoing negotiations,” with the National Hockey League and the National Basketball Association for streaming rights, and that although it only has rights from four major league baseball teams, that could change.

“I do think there will be some news around some of these renewal negotiations shortly,” Ripley said at the conference.

Sinclair has been under fire ever since MLB commissioner Rob Manfred said in October that Sinclair hasn’t secured the necessary streaming rights for the direct-to-consumer service, hinting that teams may be reluctant to give away rights without a fight. The DTC service is considered to be crucial to the future health of the Sinclair RSNs, which have seen their subscriber rolls dwindle as traditional pay TV distributors have battled with cord cutting.

Sinclair has maintained that it will not waiver from its plan to launch the DTC service. Although the broadcaster has not said which MLB teams it has deals with, speculation has been that they are the Kansas City Royals, Milwaukee Brewers, Detroit Tigers and Miami Marlins, all of which -- with the exception of the Brewers, who were 95-67 this year -- posted losing records in 2021. The Tigers signed free agent shortstop Javier Baez earlier this week, which should boost interest in the club next season. 

That could be a moot point as the MLB Players Association’s collective bargaining agreement with the league expires at 11:59 p.m. Wednesday (Dec. 1) and many are speculating that there could be a lockout. Even Ripley acknowledged if that happens, it could be bad news for the RSNs. 

“I don't have any insight into the labor negotiations there, but if the season is delayed, we won't have key tentpole products to support both our linear channels and any new DTC,” Ripley said. “That definitely could have an impact on the start.”

Ripley also commented briefly on the recent carriage negotiation with Dish Network, where the broadcaster managed to secure a multi-year retransmission consent agreement, but could not reach a deal for the RSNs.

“We had a very lengthy, complex and difficult negotiation with Dish,” Ripley said at the conference, adding that he was happy there was no disruption in service to Dish customers. “The challenge with them is the RSNs have been off for two years and they have dropped every RSN from the portfolio that they could. So it was not going to be possible to get there.”

Ripley said it is “always a possibility” that Sinclair will return to the negotiating table with Dish for the RSNs, but added he is also pursuing other opportunities with distributors that don’t carry the channels. 

Regarding opportunities, Ripley is still excited about the prospect of sports gambling, and added that its relationship with casino owner Bally's will be a big plus as it moves to launch its first gambling-oriented product. 

Ripley said Sinclair is working with Bally’s on a “Watch and Play” offering centered on tennis, which he said is the second most bet-on sport in the world.

Also: Sinclair's Ripley on RSNs: Believe It or Not 

While still the most popular programming in terms of TV ratings, sports has hit a bit of a snag with younger viewers who don’t tend to devote the time to watch full games as much as older viewers do. Younger viewers tend to watch highlights, or snippets of games online, he said.

“The solution is to make it interactive. That’s the type of experience the younger generation is looking for,” Ripley said, adding that the idea is to offer younger viewers a lean-forward experience, with exciting graphics and rewards for watching in addition to the betting option. “Once we roll out a tennis ‘Watch and Play,’ we’ll move on to other major sports. We’re really excited about giving the consumer an integrated, exciting, interactive live betting experience. That’s probably one of the biggest things we’re working on with Bally's.” ■

On the heels of its popular Formula 1: Drive to Survive docuseries, which gave viewers a behind-the scenes look at drivers and racers in the Formula One World Championship, Barclays analyst Kannan Venkateshwar wrote in a report Friday that perhaps Netflix should make the popular racing circuit the target of its next rights purchase.

Analysts have been waiting for years for streamers like Netflix, Amazon Prime Video, Facebook and Google to get serious about sports rights, but so far most have merely dipped their toes, like Amazon renewing its deal for Thursday Night Football rights in 2020  and streaming select Major League Baseball games. And while others have made small investments in sports, for the most part they haven’t yet written the mega-checks that some pundits have said they are capable of. 

In his Friday note to clients, Venkateshwar wondered if the entertainment business is looking at streaming sports all wrong. For one, he said, the industry should stop modeling sports content the same way they have modeled scripted and nonscripted content for decades. And secondly, he said streamers may be looking at the wrong sports.

Venkateshwar argued that one of the biggest issues facing new entrants and sports leagues is that distribution of traditional sports like football, soccer and cricket is that they already are widely distributed around the world. 

“This ironically makes the biggest sports the least scalable,” Venkateshwar wrote, adding that may be why potential new entrants to the sports game like Netflix may find traditional sports the least attractive. 

Part of that is due to the tribal nature of most sports. While streamers have dipped their toe in rights auctions for traditional sports like NFL football, NBA and NCAA basketball, MLB baseball and soccer, which he said has helped drive awareness, but is more similar to “how a Korean show like Squid Game became popular globally.”

Sports, he said, has much deeper cultural connotations compared to storytelling.

“This could be why Turkish shows are a bigger rage in Latin America, at present, than local telenovelas but in terms of sports, it is tough for us to see any sport replacing soccer’s pre-eminence in Latin America or Europe,” Venkateshwar wrote.

But the cultural hold is much less with sports like Formula One Racing, UFC mixed-martial arts events and WWE pro wrestling, which can be an advantage for new entrants. 

“The underlying driver of this scalability is the fact that the connective tissue for consumption of niche sports tends to be inherent to the sport itself rather than underlying cultural storylines,” he wrote. For example, Formula One fans share at least some affinity for cars, their underlying brands and even the individual teams and drivers, all of which are less anchored in any particular culture. 

“This may make live carriage of a sport like Formula One a lot more organic for a service like Netflix, especially given the success of affiliated programming like Drive to Survive,” he wrote. 

But cultural scalability isn’t enough for sports like Formula One and the others, Venkateshwar continued, adding that in order for new distribution channels to open, streamers will need to ramp up the viewing experience, with things like virtual paddock clubs, in-cockpit or VR/AR viewing and virtual and real merchandise.  

“This allows for content continuity without distinct boundaries for a given form of content which is why a sport like Formula One could fit well into services like Fortnite, Roblox or Netflix,” Venkateshwar wrote.

Formula One could be more attractive because it has fewer events (about 22 races this year), global locations, is technology-heavy and has direct participation with global brands. While baseball has more games — about 2,400 each season — they are centered more on local markets. Baseball fans in Arizona don’t watch the Seattle Mariners and vice versa. 

For traditional sports, sports betting is most likely the best experiential enhancement, and many distributors are making inroads in that industry. But for distributors like Netflix, the better path may be through sports like Formula 1. 

“Over the near term, we believe Netflix could make its live sports foray by potentially bidding for Formula One broadcast rights in the US in ’22 and Europe in ‘23/‘24,” Venkateshwar wrote. “As a sport, Formula One happens to be one of the most global in terms of reach across all sports but until recently, it struggled to grow its audience, especially as media rights moved away from broadcast to pay TV in different parts of the world. Over the course of the last year however, the sport appears to have seen a resurgence in interest even from casual fans due to the popularity of Netflix’s documentary Drive to Survive. This synergistic growth of the sport and its content extensions could be a significant opportunity for Netflix to present sports as a continuum in a manner that is unique, without content boundaries.”

According to Barclays, while Formula One has dipped in popularity over the past few years — unique viewership has fallen from 490 million in 2018 to 433 million in 2020 — in the U.S., on the heels of the Netflix docuseries, it has risen. Barclays estimates that Formula One viewership on ESPN has grown from 670,000 viewers in 2019 to 920,000 so far in 2021. 

And in the U.S., Formula One events are attracting new fans. During its Q3 conference call with analysts on Nov. 5, Formula One Group CEO Greg Maffei said of the 400,000 people that went to the U.S. Grand Prix event in Austin, Texas, on Oct. 24 — setting an F1 attendance record —  70% were first-time attendees. The usual mix is about 30% first-timers. 

“We have never seen such a crowd in Austin,” Maffei said on the call.  

Venkateshwar noted if Netflix were to dabble in Formula One, its biggest impact would be on churn, given most fans would already be subscribers. But he added that for every $100 million in annual rights costs and 2% churn, Netflix would need just 136,000 new subscribers to break even. For Formula One and others like UFC and WWE, a relationship with Netflix would be beneficial because it would likely draw fans in from areas outside its normal scope. The analyst noted that 60% of F1’s  media rights revenue comes from five countries which account for 35% of its total viewership. 

“Growing rights fees outside of these markets has been a challenge despite the scale of global viewership, not just for Formula One but also other global sports like WWE and UFC,” he wrote.

Comcast chairman and CEO Brian Roberts focused his comments at the virtual Goldman Sachs Communacopia conference Wednesday on the future, adding that the company’s performance over the years is proof that “scale matters.”

“The last couple of years demonstrates we’re in good businesses, but also how scale matters,” Roberts said. “So if one business is going down with some temporary hit from COVID, we have others that are surging. We have a great team of people, a culture that has been decades in the making, and I think we execute at a high level.”  

That may or may not have been a reference to Comcast chief financial officer Mike Cavanagh’s warning at the Sept. 14 Bank of America Media, Communications & Entertainment conference that broadband growth appeared to slow “a little bit” faster than expected in August. That comment drove Comcast stock down 7.3% that day, costing the cable operator about $20 billion in market capitalization and driving down other stocks in the sector.

Roberts instead pointed to the success of the cable unit’s broadband business, which has grown to about 31 million subscribers, and its 60 million customer relationships. 

“We’re really a broadband company,” Roberts said, adding that the strategy is to deepen those broadband relationships with consumers through innovative products and new ways to distribute them. 

Roberts said the announcement Wednesday of its XiOne product  is the latest example of its “develop once, deploy everywhere” strategy, which includes whole-home WiFi via its Xfinity Pods, its Xfinity Flex broadband-only service, its Gigabit gateway and even a feature that tells Peloton owners via text message that their exercise bike needs to be closer to their WiFi pod for better reception.

Also Read: Comcast Introduces XiOne Streaming Device to Rule Its Entire Global Footprint

“We’re building a moat around the most important part of the company, and we’re innovating and we’ve shifted the whole technology focus to broadband in homes and I think it’s really paying off,” Roberts said. 

Comcast also is focusing on streaming, adding that its Peacock service has about 20 million monthly users and 54 million signups a little more than a year after launching the service nationally. Roberts noted that Comcast also has its eyes on international streaming, with Peacock coming to its Sky subscribers later this year, and its August partnership with ViacomCBS for streaming content in Europe.   

“We’re looking at other partnerships like that around the world,” Roberts said.

Regarding sports rights, Roberts said what NBC Sports does best are big events like NFL football and the Olympics. While Roberts conceded that the recent Tokyo Olympics was “tough,” he pointed to the 120 billion minutes of programming that were consumed by viewers and was optimistic about future games in Beijing (2022), Paris (2024) and Los Angeles (2028).

“It really makes our company super-relevant for those 17 days, and no one quite can compete with advertisers for attention in the way an Olympics can every two years,” Roberts said. “We’re not that far away from Beijing, and we’ll get right back at it, but we’ll get to a normal rhythm as we go out and we look forward to Paris and we look forward to LA. We love our association with the Olympics.” 

With other sports, Comcast and its Sky satellite unit have the ability to “pick and choose,” pointing to earlier decisions not to get into a bidding war with streaming sports service DAZN for rights to Italy’s Serie A league and last year’s deal for rights to Germany's Bundesliga that resulted in a reduced fee. Sky recently extended its rights deal with the Premier League to 2025.

“These are really hard calls,” Roberts said. “You don’t always want to prevail, and sometimes you’re right and sometimes you're wrong, but I think the sustainability of sports is a critical part of what our company does well.” 

With the ad-supported version of its HBO Max product only a few days old, HBO Max executive VP and general manager Andy Forssell told an industry audience that the product and others like it could open up a whole new market for streaming, and eventually help to push the TV universe past 100 million homes. 

WarnerMedia launched its ad-supported version of HBO Max on June 2, priced at $9.99 per month and geared toward more cost-conscious consumers.  At the Barclays virtual Future of Media conference Thursday, Forssell said that the potential for ad-supported streaming is huge.   

“You’re going to get to a larger market. The total addressable market is larger,” Forssell said. “Netflix is probably defining the ceiling on what full penetration in the U.S. market is and they’re riding that up and in some cases they are propelling that wave. I think with ad supported, you add 20% to that."

Currently there are about 85 million pay TV customers in the U.S., but Forssell predicted ad-supported streaming could help push that total higher. 

“We should get back to [the] 100 million-plus homes that we served during the heyday of cable,” he continued. “I think SVOD and some ad-supported SVOD versions should get back to that.”

HBO Max said that it will keep ad loads low on the service -- a maximum of 4 minutes per hour -- and Forssell said that won’t change. 

“Our hypothesis there is message recall, brand recall will be higher the fewer ads you have,” Forssell said. “They’ll be worth more and we'll get to monetize that, ad partners will agree that they are worth more. That’s the experiment we have to prove out in the next year and make it reality and not flip back into what many providers have done in maybe starting with a similar thesis, but saying let’s add another ad to this break because that's the easiest way to increase revenue.”  

Forssell also talked about sports rights, adding that the old way of selling sports rights -- offering what he called “odd little slices” of rights to cable networks -- probably won’t work in a streaming world. 

“I don’t think that [sports] rights landscape is going to be nearly as successful in SVOD,” he said. 

He pointed to Turner Networks’ agreement with the National Hockey League, which also has an HBO Max component.

“Hockey primarily was a vote of confidence and investment in the Turner Networks,” Forssell said. “To add a major sport there was a statement we wanted to make. Will we experiment with that on HBO Max? Sure.” 

But he added that sports brings new challenges to streaming, especially on how they are presented. Providers should also be thinking about things like shoulder programming around games, and whether talent connected with that content should be different in the digital and linear worlds. 

For news operations like CNN, he said the linear relationship will continue as the company looks for streaming complements. 

CNN is said to be readying a streaming service called CNN Plus, according to a report in the Wall Street Journal. 

“We will look at what you can do direct-to-consumer,” Forssell said. “We don’t think it’s just repurposing all of that and putting it online in some IP directed format. We think it’s going to change, some of the content needs to change. There is a lot of work going on as to what that will look like.”

Still, Forssell said he was optimistic about the fit between streaming news and entertainment. “They [have] different needs, but I’m optimistic," he said. “Sports, I’m not pessimistic, but it’s going to take some experimentation on what works in SVOD, because what works in cable doesn’t necessarily translate.” 

Liberty Media CEO Greg Maffei was the latest media chief to speculate on Amazon’s reported increased interest in sports rights, telling an industry audience earlier this week that he expects streaming video companies to get more involved in sports, which should drive rights fees skyward.

Speaking at the virtual Deutsche Bank Media, Internet and Telecom conference on Monday, Maffei said the time is ripe for big tech to boost its involvement in streaming sports.

"Amazon is certainly looking pretty actively, it looks like, at the NFL. You’ve seen a lot of interest from various players,” Maffei said. “Have we seen the execution yet? No. Amazon has moved from a bit player in the NFL to being a serious player and I suspect they're only going to get more serious over time and they won't be the only ones."

Amazon first dipped its toes in sports programming in 2017, agreeing to pay about $50 million for 10 Thursday Night Football games broadcast by NBC and CBS. It stepped up that involvement in 2020, renewing its TNF for three years and opening up speculation that it could expand its sports involvement, to possibly include the entire TNF slate. Fox CEO Lachlan Murdoch has hinted that the programmer may concentrate on its NFL Sunday package and give up rights to TNF. Amazon had been considered to be a possible bidder for the NFL’s out-of-market Sunday Ticket package, a notion that has gained more steam after AT&T agreed to spin off its TV distribution unit -- including DirecTV, U-verse and AT&T TV Now -- and selling a 30% interest in the new unit to TPG Capital for about $8 billion. As part of that deal, AT&T said Sunday Ticket, to which it holds the rights through the 2022 season, would move to the new company. 

Sunday Ticket negotiations are expected to wait until next year, as the league and potential suitors continue to circle around other rights. According to Sports Business Journal, Disney’s ESPN hammered out a deal to renew Monday Night Football and its ABC broadcast network will return to the Super Bowl rotation for the first time since 2006. 

On March 10, Disney said ESPN had reached a seven-year deal with the National Hockey League to air games on the cable channel as well as its ABC network and Hulu streaming service. 

But Amazon finally stepping up to the sports plate could have a huge effect on the way fans consume sports content.

"Amazon Prime taking over Thursday Night Football is a watershed moment in TV history that will undoubtedly accelerate the demise of linear TV and the multichannel bundle,” LightShed Partners partner and media and technology analyst Rich Greenfield wrote in a recent blog posting. 

In a research note, Barclays analyst Kannan Venkateshwar cited published reports that speculate Amazon would pay about $1 billion annually for TNF rights, above the $780 million he estimated Fox is paying in the last year of its five-year deal.

Thursday Night Football ratings have been significantly lower than other NFL packages, Venkateshwar wrote. According to the analyst, Amazon streamed the 11 games Fox carried in the 2020 NFL regular season and one Saturday game. The Saturday game generated about one-third of the viewership of an average nationally televised NFL game, and streaming TNF added between 200,000 and 500,000 viewers, according to the Barclays analayst. However, he noted the new deal may be for more games, driving down the cost per contest.  

And ratings may not be the ultimate game for Amazon when it comes to sports or anything else involved with Amazon Prime. 

Back in December, Amazon’s VP of global sports video Marie Donoghue said the online retailer’s interest in sports is tied specifically to what benefit it would have for the Amazon Prime service.

“We are opportunistic,” Donoghue said at the SportsPro OTT Summit in December. “I think sometimes that confuses people, that we do look at everything, but everything has started with the customer and we only do it if it provides value to the customer and particularly their Prime membership.” 

Later in that interview, Donoghue, who spent about 20 years at ESPN expanding its programming offerings before joining Amazon in 2018, stressed that Amazon isn’t a 24-hour sports service, but an entertainment service, and its inherent nature is vastly different from the other types of companies that normally bid on sports rights. 

“We literally start with the customer and work backwards,” she said

Amazon Prime offers free shipping to customers and has about 150 million people worldwide paying about $119 per year for the privilege. So while it would be nice if sports on Amazon Prime Video drew in more subscribers, the value of that add-on to the service is not in drawing in more customers who watch games and leave. The purpose of the video offering, Amazon chairman and CEO Jeff Bezos said back in 2016, ultimately lies in how many consumer products those viewers buy. 

“From a business POV for us, we get to monetize that content in an unusual way," Bezos said at the ReCode Code Conference in 2016. "When we win a Golden Globe, it helps us sell more shoes in a very direct way." 

The entrance of big video streamers into sports rights negotiations has been expected for years, but so far their involvement has been minimal. Any involvement from those companies -- Facebook and Google have been cited as potential major rights bidders -- would bode well for Liberty, which owns Major League Baseball’s Atlanta Braves, and the Formula One racing circuit. At the same time, the traditional cable bundle is showing signs of unraveling -- MVPDs lost about 7 million customers in 2020, according to reports -- and regional sports networks have been under pressure because of their high affiliate fees. 

Also Read: Sports an OTT Streaming Could Squeeze the Past Vestige of Appointment TV

"The most important thing that drives sports rights is competition. To the degree we see new large digital distributors and the like enter the markets, that's a positive," Maffei said. “To the degree we have seen tradeoffs between free-to- air and pay and then a new version of pay, digital, I think having new players, new entrants is probably the most positive effect we have. I do see that likely to happen for some of the sporting events in the countries we have.”

Maffei also said that for smaller sports, breaking into the standalone streaming business can be tricky. Liberty’s own Formula One launched F1 TV in 2018, and earlier this week said it would revamp the streaming service with new features allowing fans to more easily find archived content and adding Brazil, Slovakia and the Czech Republic to the more than 82 countries where the service is available. 

At the Deutsche Bank conference, Maffei said that in the future he sees sports rights holders, especially smaller ones, offering a hybrid of subscription, broadcast and pay TV content. 

“We’ve learned that that can be an unbelievably  powerful fan engagement tool,” Maffei said of F1 TV. “But it’s hard at the amount of content we have -- 23 races and even shoulder content -- to build enough content to probably build a compelling service for a broad, board group of people. To be a fan engagement tool, great, to be something that is amazing for a really dedicated hardcore fan group, perhaps. But to be something which substitutes or overruns our traditional partners or the large pay partners or the large digital partners, I think that is going to be harder to see. I think you’re going to see a lot of sports find difficulty in building -- and we don’t have enough content --  a broad enough content interest on an ongoing basis to build a subscription product that really replaces what they have. Look at what happened to WWE pulling back and going to Peacock. And they have a lot more content than we do.”

The Walt Disney Co., parent of sports network ESPN, said it is in talks with the various professional leagues that have had to suspend live games during the COVID-19 pandemic, but offered fans little hope that those talks would lead to lower rates or rebates for games they are paying for but can’t watch.

Disney chief financial officer Christine McCarthy said on a conference call with analysts to discuss fiscal Q2 results that Disney would not get into specifics regarding its deals with leagues, but said the company is in talks with the various professional sports leagues, primarily around the return of league play.

“We are working very, very closely with the leagues and the conference partners and we are looking forward to the return of live events,” McCarthy said on the call. “We are in active discussions with them now.”

ESPN Study: Fans Support Resuming Live Sports Without Spectators 

The National Basketball Association, the National Hockey League and Major League Baseball all suspended their regular seasons in March as the coronavirus pandemic forced shutdowns across the country. While there have been several scenarios put forth to bring back league play as soon as June or July, no final decisions have been made.

Related: Want Sports Relief? Not So Fast 

Consumers, pay TV distributors and politicians have chafed at the fact that customers are still forced to pay for sports channels that can’t show live sports. New York State Attorney General Letitia James fired off letters to pay TV companies in her state last week asking them to lower fees, and cable operators have said they would pass on any savings to consumers. Networks argue that any change in rates is up to the leagues, which has many believing that rate relief won’t come.

In the meantime, ESPN and other sports channels are busy trying to fill airtime normally used for games with documentaries, classic sports and anything else they can think of. ESPN has scored mightily with Chicago Bulls documentary The Last Dance, which has attracted strong ratings, and has held other events like a H.O.R.S.E. game with former and current NBA and WNBA players. Earlier this week, ESPN signed a deal to air South Korea’s Korean Baseball Organization to air six games per week. 

On the conference call, new Disney CEO Bob Chapek said sports rights continue to be “incredibly valuable” to Disney, but hinted it may be worth more to its streaming properties down the road. Disney’s ESPN+ nearly quadrupled its subscribers in fiscal Q2 to 7.9 million from 2.2 million in the period, and its Disney+ service, which finished the quarter with 33.5 million customers, added another 21 million by May 4.

“We think that live sports remains incredibly valuable to us, and we continue to have an interest in live sports rights given the unique slate of assets that we own,” Chapek said on the call. “We’re going to do that in a very disciplined manner. Existing consumer trends play a big part in how we think about the value of sports rights as they make the transition from linear over to digital. I think it's a bit premature to give any specific details on what the strategy is other than we are highly interested in those. We think we want to make the evolution along with the consumer as they go from linear to digital.” 

Comcast chairman and CEO Brian Roberts told analysts Thursday that the media giant is talking with sports leagues about possible rate relief during the suspension of play during the COVID-19 pandemic, but said it will mostly depend on when the games resume.

Comcast owns programmer NBCUniversal, which along with the NBC broadcast network and NBC Sports, has a large sports programming lineup.

“Our focus at the moment is trying to work with each of the various leagues where I think ultimately the answers to some of these questions reside,” Roberts said. “The leagues have to decide where they are going to be playing, what happens to the future, if they’re just starting the season or the current one that has been disrupted. I think we’re seeing encouraging movement all over the world including in the U.S. It’s very much top of mind. If we are able to get clarification, then we can give that to our customers. It works differently in Europe than it does in the U.S. ...There’s an awful lot of effort being spent to get back quickly and safely and I’m hopeful that that’s going to happen.”

As the lockdowns associated with the coronavirus pandemic enter their second month, reports have surfaced that some distributors have demanded relief from sports-centric channels because no games have been played. The National Basketball Association and the National Hockey League suspended their regular seasons on March 12 and Major League Baseball suspended its opening day on March 26. While there have been several scenarios put forth -- the latest is that baseball could return as soon as late June or early July --  with the NBA and NHL playoffs around the same time frame, no decisions have been made. 

Comcast cable and other distributors have said in the past if they receive rate relief from programmers, they will pass that savings on to consumers. 

A report in the New York Post claimed that Dish Network chairman Charlie Ergen has told sports network ESPN that it would not pay its affiliate fees in April because no games were played. Dish and ESPN declined to comment. In a blog post, LightShed Partners partner and media & technology analyst Rich Greenfield said he believes that multiple distributors have approached ESPN for a rate break. 

While sources familiar with ESPN dispute that there has been a deluge of requests from distributors, the lack of games has been frustrating for consumers who chafe at paying monthly sports surcharges when there are no sports. But the question of whether distributors and networks will get relief depends on the deals they have signed. Most U.S. sports rights deals hinge on a minimum number of games delivered, and so far that hasn’t been breached.

At the same time, in the United Kingdom, the English Premier League suspended its season in March and Comcast’s U.K. distribution arm -- satellite TV service Sky -- has stopped charging some customers for unbundled sports programming. According to some reports, EPL teams are beginning to return to practice -- adhering to social distancing protocols - and the league could resume play as soon as June.

Sky chief Jeremey Darroch said that the satellite service has paused many of its customers unbundled sports subscriptions during the pandemic. 

“We thought that was a very sensible way to manage in an environment where the sports have gone away,” Darroch said. “That means the level of consolation regarding sport is de minimis. We think that positions us well to bring customers back when the sports season resumes.”

He added that Sky also is talking to the leagues about rights fees.

“We are talking pretty much to everybody at the moment,” Darroch said. “That covers a range of things. First we have to get sport back, which I think is in everybody’s interest. We’re working with rights holders, with government around what we can do to create a safe environment where sports can come back. The assumption is that sports will start to come back over the summer.

“In terms of the future and sports renegotiation's and new contracts, in principle my approach hasn’t really changed,” he continued. “We start with volume and the volume we see, we bid against that volume in a disciplined way. One of the advantages I think about the way sports are sold in Europe, is that typically we’re on shorter cycles, the average cycle would be three, perhaps four years. So that does give us the opportunity when we think there is some form of reset that’s required...Obviously we are thinking of that all the time and particularly at the moment and we’ll reflect that in due course.” 

New York -- Tech giants like Amazon are expected to move more aggressively into the sports rights business as rights deals come up, but it will continue to be at a gradual pace, according to a panel discussion at the NAB Show NY here Wednesday.

In the past, tech companies like Amazon have shaken up the market with their entrance into the sports rights fray, but while the deals have made headlines, they didn’t require a huge outlay of cash, said Sports Media Advisors CEO Doug Perlman at the panel discussion, Sports Rights and the Future of Broadcasting.

“This time around it will be a material deal -- not a prime package -- but a digital player that secures significant exclusive rights,” Perlman said.

Amazon paid about $50 million for streaming rights for 10 Thursday Night Football games in 2017, later renewing that deal for an undisclosed amount for the 2018-19 seasons. 

But the panelists were split in estimating big tech’s interest in rights deals as they come up. The NFL is the highest profile league to come up for renewal -- its deal expires in 2021-2022 -- but there are other leagues that will step up to the stage like Major League Baseball, the National Hockey League and the National Basketball Association in the next several years.

Horizon Media SVP, director of Horizon Media Sports Investment team Adam Schwartz said he expects a major tech player to take a bigger slice of NFL rights this time around.

“I wouldn’t be surprised if they broke out part of the Sunday window with one of these players,” Schwartz said. “The money is going to be there regardless of what they do.”

Bevilacqua Helvant Ventures co-founder Chris Bevilacqua was a little more cautious.

“I think the NFL will sell a package, but I’m skeptical tech players are ready for an all-in jump like that. They seem to be so far dabbling with little sports deals,” Bevilacqua said, noting Amazon’s participation as a minority equity partner in The New York Yankees and Sinclair Broadcast Group’s purchase of the YES Network from Disney. 

“The NFL is an order of magnitude beyond that,” Bevilacqua added. “I’m not sure I see that yet.”

After making a stunning bid, Fox has pinned down the rights to air the WWE’s SmackDown series starting in the fall of 2019.

The deal is nearly complete, according to a published report, and would have Fox paying nearly $1 billion over five years for SmackDown.

SmackDown currently airs on USA Network. NBCU, which declined to match Fox's offer, was paying substantially less under its agreement. WWE’s long running Raw owill continue to air on USA Network.

21st Century Fox has agreed to sell most of its television and movie studio assets and its entertainment cable networks to The Walt Disney Co.

What remains, called “New Fox,” including the Fox Broadcast network, is expected to be heavy on live news and sports. The network has already acquired the rights to air Thursday Night Football from the NFL. And working with the WWE would give the network three more hours of live programming on Friday nights.

NBCU had featured its WWE programming during its upfront presentation last week, with star wrestlers including newcomer Ronda Rousey appearing in a ring on the stage at Radio City Music Hall.

In afternoon trading, shares of WWE Entertainment were up more than 1%

Fox and NBCU had no comment.

BTIG media analyst Richard Greenfield – one of the early backers of the over-the-top model – predicted that online retailer Amazon is best poised to become the most disruptive force in the pay television industry, outpacing Netflix and using its vast resources to fund forays into sports and other entertainment.

“They [Amazon] are all about the bundle, it is just a different bundle than what we are accustomed to,” Greenfield said on The CUSP Show, the official podcast of the Columbia University Sports Management Program. “It’s music, it’s video, it’s shipping. They want to be a bundled player.”

Amazon has already committed to spending billions on original programming and earlier this week revealed that its Amazon Prime service, which includes free two-day shipping for products, video and music, just passed 100 million customers.

Amazon is no stranger to sports – it renewed a deal for streaming video rights for Thursday Night Football in April  – and has been thought to have greater aspirations. But the company has been reluctant to spend heavily on products that it can’t the directly to additional subscriptions. While sports hasn’t passed that smell test so far, it may in the near future.

Greenfield said data gleaned from the company’s digital relationship with viewers will be the difference.

“They are going to use that data to inform their decision making,” Greenfield said. “Amazon ran a test, they clearly understand now, even [with] just a simulcast, how many people watched, how long did they watch, why did they tune out, what did we learn, do those people buy more NFL merchandise over the course of the next year, did those people buy more NFL tickets over the next year. It’s using the data to make a much wider ranged decision than the way a traditional media company can make a decision.”

Greenfield doesn’t believe Amazon or any other tech giant wants to spend the money to wrest Sunday football from the broadcast networks. But he believes that Monday Night Football could be an attractive target.

“I think the NFL will keep Sunday on broadcast TV for the foreseeable future,” Greenfield said. “I think reach, and the success of Sunday night football, Thursday Night Football and Sunday afternoon football is going to keep that on broadcast well into the next decade. If you wanted to change the TV ecosystem in a meaningful way, Monday Night Football already moved from broadcast to cable once, moving from cable to the Internet doesn’t seem crazy.”

Greenfield noted there are risks – he estimated the NFL gets $2 billion a year for MNF rights from ESPN.

“The dollars are significant. On the flip side, this sort of feels like, if you’re a tech player, this is your one big shot to see how you can change the game. …If you pull that sports piece out of the Jenga puzzle the game collapses.”

And the analyst added that other tech companies could also enter the fray – Facebook bid on Indian Premier League cricket rights last year (it lost), streams Major League Soccer games  and in March reached a deal to stream 25 Major League Baseball games this season, Apple is investing heavily in entertainment content and even Netflix, which so far has stayed away from sports, could find a way in.

“The players that will matter [in sports rights] are going to be bigger companies that have the balance sheets and capacity to do it today and could attack this opportunity over the course of the next five years in a very methodical way,” Greenfield said.  

Facebook made its much talked about hiring of former Eurosport CEO Peter Hutton official on Monday, naming him director, global live sports partnerships and programming at the social media giant, where he will help drive efforts to add live sports programming to its lineup.

Variety and The Guardian first reported in January that Hutton was heading for Facebook, part of the social media juggernaut’s push into live sports.

Hutton joined Eurosport about three years ago from MP & Silva Group, where he was co-CEO of the international sports rights giant. He has also served stints at Fox International Channels and Star Sports.

Hutton wasted little time during his tenure at Eurosport, a unit of Discovery Communications, securing MLS rights in Europe outside the U.K. in 2015 and landing European TV and multiplatform rights for the 2018-2024 Olympic Games in June of that year.

“Peter is uniquely qualified to lead our live sports partnerships...he knows the global sports rights landscape, owns strong relationships, and has a track record of delivering results on multiple continents,” Reed said on his Facebook page. “Plus, he's worked on behalf of both broadcasters and rights holders. He’ll help us continue to collaborate with both, including our great partners at Discovery, as we seek to deliver world-class live sports content to our global community of sports fans.”

Facebook has expressed interest in live sports in the past – it bid about $610 million for rights to Indian Premier League cricket matches last year, but was bested by a $2.5 billion offer from 21st Century Fox.

Facebook was expected to be aggressive in the bidding for NFL Thursday Night Footballrights but sat out that negotiation, which was won by Fox. It was also expected to be interested in possibly wresting WWE SmackDown rights from long-time rights holder USA Network, but apparently sat on the sidelines in that negotiation as well. But the internet company has reached deals with the WWE for a 12-episode show that airs on Facebook Watch called Mixed Match Challenge featuring Raw and SmackDown wrestlers.

“I've thoroughly enjoyed my three years with Eurosport, an incredible experience with some brilliant people, both in Paris and in the wider Discovery family,” Hutton said on his Facebook page. “However, the potential to work with Facebook to help the team and its partners unlock the power of live sports is too good an opportunity to turn down. I'm looking forward to an exciting journey and a bundle of new experiences, and hope I live up to the trust of Dan Reed and his team.”

Sports, one of the last vestiges thought immune to cord-cutting, is feeling the impact of the changing viewing landscape. Organizations outside of traditional broadcast television giants such as CBS and NBC are grabbing up the rights to live-stream fan-favorite leagues and games. Amazon paid the National Football League $50 million for the rights to streamThursday Night Footballgames this season. Facebook has worked out deals for the rights to stream live Major League Baseball games, Major League Soccer games and an assortment of other college and international sports games. Verizon Communications announced a $2.5 billion deal with the NFL to expand the telco’s current streaming rights, which now include playoff games, the Super Bowl and in-market games on Verizon websites such as Yahoo and AOL. Clearly, the tech giants see the live-streaming opportunity as a way to land more user attention and, hopefully, more advertising dollars.

Still there’s reason to doubt if their investments will pay off. Sports fans are passionate beasts; they won’t stand to miss a moment of the game they’re watching. No fan wants to have the game lag or the stream fail, and thus miss an important play. While the promise of live-streaming sports games would open up more options for people to watch their favorite teams, as the industry currently stands, live streaming is not truly live.

Unsatisfied With Live Streams
According to Phenix’sThe Streaming Wars: Sports Report 2017, nearly 75% of sports fans expect problems when they stream a game. The culprit is latency — delays, poor picture quality and buffering — turning sports fans off from live streaming. Even these tech giants entering the game are plagued by latency, so much so that 63% of sports watchers said they are reluctant to sign up or resubscribe to live-streaming platforms in 2018. A third said they would think about canceling the service that was giving them an issue.

This past year, there have been some devastating examples of live-stream failures, most notably the widely hyped Floyd Mayweather vs. Conor McGregor fight. The main event was delayed due to scattered outages on pay-per-view. And a large number of fans weren’t able to see the Showtime stream of the fight due to technical issues, actually prompting some to sue Showtime, citing poor quality including grainy video, error screens, buffer events and stalls. UFC Fight Pass also crashed multiple times due to overwhelming traffic.

What’s clear is that these platforms weren’t able to handle all the concurrent viewers, and they disappointed their customers. Right now, the AmazonThursday Night Footballstream review rating is only 2.5 out of 5 stars, with many reporting latency problems and stalling. Eventually, people are going to look to watch the games elsewhere or turn back to more traditional platforms.

For organizations spending huge sums of money to stream the games, with the expectation that either viewers will pay for streaming subscriptions or advertisers will pay more to reach those viewers, these issues will result in lost revenue. With so many fans disappointed by the current state of live streaming and willing to give up on live-streaming platforms, we have reason to believe those dollars might be limited and the investments might not pay off.

Real-Time Potential
Fortunately, there’s still time for the industry to course-correct. This means companies need to invest in technology that allows for real-time streaming, which is different than “live” with sub-second latency, at broadcast scale. By doing so, fan engagement can be taken to the next level. Phenix’s research found that more than one-third of fans want to gain insight into player stats and stream more than one game on different devices, offering a multiscreen experience. Moreover, fans are looking to see updates from the locker room or sidelines, and would even want to talk or interact with the players and coaches in real time.

There’s massive potential to improve the overall experience for fans, but the first step is to eliminate latency. By providing streams in real time, major organizations broadcasting games can differentiate themselves and provide more interactivity for fans, achieving true return on investment — more subscribers and viewers equals more engagement, and thus more advertising dollars.

It’s not all grim: Amazon, Facebook, Verizon and others are providing fans the opportunity to engage in games on different platforms, testing new waters outside of traditional big TV players. But the only way these investments will pay off is if they give fans the streaming quality they demand and deserve. Right now, the industry isn’t living up to its promise and consumer sentiment toward live streaming is reflective of the obvious latency problem. The good news is, fans do see the potential in live streaming and want the engagement and flexibility real-time streaming can provide. Sports fans are dedicated to their team, and so platforms need to be dedicated to their subscribers.

Stefan Birrer is co-founder and CEO of streaming systems developer Phenix. Photo of New England Patriots quarterback Tom Brady courtesy of ESPN.

The battle for sports rights could heat up considerably this year as digital distribution becomes an increasingly viable option for professional leagues, according to Barclays media analyst Kannan Venkateshwar.

The first test of that theory could come with the upcoming renewal of broadcast rights for Thursday Night Football in 2018, the somewhat ratings-challenged National Football League offering that was split last season between CBS, NBC and the league’s own NFL Network. Venkateshwar believes that the emergence of digital TV providers and the possibility that the league might go direct to consumer with the games could drive up prices and affect other sports deals.

HOW LONG ON SIDELINES?
He’s not alone. Pivotal Research Group senior research analyst-advertising Brian Wieser also sees an opening in the sports fray for virtual MVPDs, but he thinks they’ll wait on the sidelines for now.

“I think the vMVPDs could very well become players in sports, but it seems likely they’ll want more scale before they do anything unique,” Wieser said. “However, the streaming SVOD services — which do have scale — are probably less likely to do anything, as sports is still mostly consumed live.”

There’s a potential wild card, Weiser said: Any service provider that might want to jump into the sports-rights arena merely has to write a check, and most have ample cash on hand.

“But I think it’s unlikely this would occur, as most of them seem to be relatively disciplined,” Wieser added.

Thursday Night Football would appear ripe for vMVPDs mainly because of ratings shortfalls last year that were blamed on poor matchups and competition with news networks during a contentious election year.

But if vMVPDs choose to wait, a lot of opportunities lie ahead over the next decade. Among the sports-rights contracts set to roll off are NBC Sports Group’s deal with the National Hockey League (2020); ESPN’s Monday Night Football deal (2021); ESPN, Fox and Turner’s agreement with Major League Baseball (2021); Sunday NFL games for CBS, Fox and NBC (2022); and DirecTV’s NFL Sunday Ticket deal (2022).

MoffettNathanson senior analyst Michael Nathanson said in a report that Amazon could be a digital participant in those deals, but vMVPDs could test the waters earlier, perhaps with Twitter’s expiring NFL streaming rights or Thursday Night Football.

Venkateshwar likened the possible entry of digital bidders to the emergence of Fox in the mid-1990s for NFL broadcast rights, followed by cable networks like ESPN and TNT bidding for major sports, events that helped drive rights fees into the stratosphere.

According to Venkateshwar, sports-league revenue has risen at a 7.5% annual clip for the NFL between 2010 and 2015, fueled by a 12.3% hike in rights fees. Other leagues have seem similar gains, with Major League Baseball rights fees climbing 15%, the National Basketball Association up 3.5% annually and even the NHL up 18.3% in the same time frame.

STREAMS COULD FLOW
Digital bidders are likely to serve more as spoilers in early rights negotiations, helping to drive up prices for the ultimate winners. But as technology improves — current live-streaming capacity can’t handle a major sports event like the Super Bowl, but could handle smaller, more targeted events on Twitter or Facebook — so do the opportunities.

“This could be one of the major considerations for leagues in the coming years given that the quality of experience is a major factor in their distribution decisions,” Venkateshwar wrote.

A new study by PricewaterhouseCoopers says that television, mobile and online sports rights will become the largest part of the sports entertainment sector by 2018, driven by increased demand from streaming and over-the-top services.

According to PwC’s new sports industry report – At the Gate and Beyond: Outlook for the sports market in North America through 2020 – rights for broadcast, cable, Internet and mobile rights will reach $19.9 billion by 2018, outpacing revenue from sponsorships ($17.5 billion) and live gate revenue ($19.8 billion) that year. Media rights revenue growth is expected to stabilize over the next five years to a compound annual growth rate (CAGR) of about 5.5%, after a torrid pace in the past decade.

PwC believes that consumer and advertiser engagement with live game broadcasts will remain strong, keeping rights in demand with traditional sources as well as with social media and other emerging distribution partners. That already is beginning to happen, with Twitter’s agreement to carry certain National Football League games over its service.

While broadcast rights will still be a priority, so will reaching deals with new digital products to attract new audiences, deepen engagement and displace any rights fee premium lost as pay-TV moves away from or within the bundle, PwC said.

Sports properties will keep an eye on emerging technologies like personalized video, 3D video, virtual reality, augmented video and augmented reality for premium, immersive experiences with either live or archived content – but PwC believes it’s too early to determine their impact on the sports market value chain.

For sports fans, September marks the beginning of fall’s TV-sports nirvana, as all four major pro sports leagues are in play, with college football also kicking off and the college-basketball season soon to ramp up.

Along with the multitude of national broadcast and cable networks, as well as regional sports services, airing live events this fall, a rookie live-event distributor will hit the field with the promise of providing fans with even more access to the sports content they want.

Social-media service Twitter will live-stream the Sept. 15 New York Jets-Buffalo Bills Thursday Night Football telecast, the first of 10 live Thursday night games Twitter will offer to both users and nonusers (i.e., you won’t need a Twitter handle to watch) during the 2016 National Football League season as part of a landmark multimillion-dollar carriage deal inked this past April.

While the NFL has thrown content passes to online platforms before — it streamed a regular-season game last year via Yahoo, and just last month announced plans to launch its own Snapchat Discover channel — the Twitter deal marks a new frontier for both the league and the platform.

The NFL joins Major League Baseball and the National Hockey League in streaming live games via Twitter. And though it doesn’t offer any National Basketball Association games, Twitter has inked a deal with the pro-hoops circuit to air two exclusive series once the 2016-17 regular season launches next month.

No one expects Twitter’s live streaming to cut into national or local viewership of NFL, MLB or NHL telecasts. It remains to be seen if consumers will even consider watching live video content on what has traditionally been a text and photo-based media site for news and information geeks.

But the Twitter deals represent more chipping away at cable’s live-sports value proposition. The more games sports fans can watch outside the traditional cable subscription package, the greater the potential they’ll switch content-delivery teams.

Disney shares slipped in early trading Wednesday after BTIG media analyst Rich Greenfield said a study showed that more than half of its respondents would drop sports network ESPN just to save $8 per month.

Disney shares were down slightly in early trading (less than 1% or 79 cents per share) to $100.67 each.

Greenfield has been one of ESPN’s staunchest critics – he downgraded Disney to “sell” just before the premiere of its blockbuster studio release Star Wars: The Force Awakens – and he continued to turn up the heat on the programmer with this latest survey. Greenfield has said repeatedly that ESPN has paid exorbitant rights fees for sports channels and that because of its fee structure would find it impossible to offer programming direct-to-consumer. While ESPN has said it has no current intention to bypass its existing distribution partners, it has said it could offer a direct-to-consumer product in the next five years.

Greenfield, on the other hand, doesn’t believe it, adding that the sports channel has been feasting on the cable bundle for decades – it is the highest-priced entertainment network at about $7 per subscriber per month – and would find it hard to survive on a smaller revenue diet.

“The price/value of ESPN and ESPN2 is simply too high for a majority of US consumers today,” he wrote in a blog posting.

BTIG hired consumer marketing and intelligence company Civic Science, which surveyed 1,582 consumers last week, 87% of which were multichannel TV subscribers. The survey asked two questions: would consumers drop ESPN and ESPN 2 if they could save $8 per month on their cable bill; and if the channels were only available as a standalone, similar to Netflix, would they pay $20 per month to get them?

According to BTIG, 56% of the respondents said they would drop the channels to save $8 per month (the equivalent of a Netflix subscription), with 60% of women and 49% of men saying they could do without the networks. Only 6% of respondents said they would subscriber to the standalone ESPN networks for $20 per month.

That highlights what Greenfield believes is the futility of an ESPN direct-to-consumer [DTC] offering.

“[N]o matter what price point ESPN/ESPN2 launch DTC, it enables their legacy distributors such as Comcast to offer far more robust channel packages without ESPN (currently 80% of their subscriber have to take ESPN),” Greenfield wrote. “ESPN is already struggling with the pain caused by cable packages such as Verizon’s Custom TV; now imagine those type of packages offered to a wider array of consumers.  We do not believe ESPN would be able to replace half its subs with a DTC offering.”

Commemorating the National Cable Television Cooperative’s 30th anniversary, executives from small cable operators across the nation and their families are going to Kansas City, Mo. for The Independent Show.

In the group’s hometown, NCTC and American Cable Association officials are gathering on Sunday, July 27 for registration, the first-timers' reception and a welcoming evening tailgate party, before getting down to business from July 28-30, when they will pursue networking opportunities, check out displays from over 140 exhibitors and engage in educational sessions, with key discussions centering on IP, TV Everywhere and, not surprisingly, rising programming costs.

This year’s event will unfurl at the Kansas City Sheraton Hotel at Crown Center. Check out the conference schedule here.    

Monday’s agenda is highlighted by a members-only meeting, where NCTC president and CEO Rich Fickle and ACA president and CEO Matt Polka will preside over the combined discussion for both organizations. The former group will conduct its 2014 board member election and present a financial overview and examine other business issues, while ACA will elect its board, distribute its member awards and provide an overview of the progress made during 2013-2014 and its plans for 2014-2015. Those events will be backed by an open discussion about key issues impacting members.

The conference’s opening general session follows: “IP is the Future – Are you on Board?” Moderated by The Wall Street Journal’s Shalini Ramachandran, the discussion will focus on the key trends and how members can align their resources to optimize the opportunity for the IP future and to ensure their place in it. The panelists: Wave Broadband CEO Steve Weed, Imagine Communications CTO Steve Reynolds, and Jimmy Schaeffler, CSO of consultancy, The Carmel Group.

Sigurd Jonny “Sig” Hansen, who leads the fishing boat Northwestern of Discovery Channel’s long-running reality hit, Deadliest Catch, will pilot conventioneers through lunch with insights as to how his vessel is one of the Alaskan crab industry’s leading producers.

On Tuesday, July 29, the ACA staff and its consultants will provide attendees with updates on a number of current issues integral to small cable operators retransmission-consent, program access, the proposed Comcast-Time Warner Cable merger, net neutrality, Aereo and the Connect America Fund, among them..

Also on the agenda are three key panels: “From the TV to Everywhere: All Things TVE” that examines the burgeoning platform; a financial discourse with “Wall Street Update for Main Street MSOs”; and a look at top approaches across home security and business services, as well as other growing parts of the cable product mix, during “The Maturing Customer Experience: Best Practices in a Changing Environment.”

Tuesday night’s showcase is the 30th Anniversary Celebration Dinner, honoring NCTC’s contributions over the past three decades. The Independent Operator of the Year Awards will also be presented.  

The Independent Show concludes on Wednesday, July 30, but not before attendees and their families can break breakfast bread  (and bacon and eggs) and  learn about the success story that is Jayhawks basketball from Kansas University head coach Bill Self, who along with his wife Cindy has established the Assist Foundation, a fundraising conduit for an array of youth initiatives.

Before the NCTC and Mid-America Cable Show co-hosted golf tournament at Tiffany Springs Golf Course drives into full swing, members can learn more about such “Emerging Revenue Opportunites” as smart homes, education and healthcare; receive the latest intel on how to handle and communicate to customers when negotiations stall or go wrong in “Surviving a Programmer Dispute: It’s Not the End of the World – Roundtable Discussion”; and learn how to maximize regional sports network agreements in “Acquiring Sports Rights: History and Challenges.”

For its part, the Mid-America Cable Telecommunications Association is holding its annual event alongside the Independent Show. More information about the Mid-America Cable Show is available here.