TV2020: Sports-Rights Values Are Skyrocketing, But Where Are They Headed?

TV2020: Sports-Rights Values Are Skyrocketing, But Where Are They Headed? Industry experts sound off on the impact of cord-cutting, DTC, betting, and more By Jason Dachman, Chief Editor

Wednesday, October 23, 2019 - 1:48 pm

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In today's rapidly evolving media landscape, there are few certainties. The business is in a state of flux, with consolidation, changing consumer viewing habits, and the rise of digital giants like Amazon and Netflix dramatically reshaping the industry. One certainty, however, seems clear: the value of sports rights will continue to increase. With the next bidding cycle for the NFL and other major rights looming, analysts are projecting that top leagues will be able to generate a further $4 billion per year in rights revenues by the end of the 2025 (according to Ampere Analysis).

The closing panel at TV2020 focused on sports rights: (from left) Bevilacqua Helfant Ventures' Chris Bevilacqua, Horizon Media's Adam Schwartz, Deloitte U.S. Sports Practice Chad Deweese, Sports Media Advisors' Doug Perlman, and Moderator John Ourand of SportsBusiness Journal.

At last week's TV2020 event, a TVNewsCheck conference at NAB New York, sports-rights insiders debated whether broadcasters will retain the rights to NFL and other major sports franchises as big tech companies grow their presence. Also on the agenda were how legalized gambling will affect sports-broadcasting and media revenue streams and the impact of direct-to-consumer OTT platforms. Here are some highlights:

On the power of the NFL and the value of its media rights:

Doug Perlman, CEO, Sports Media Advisors: The NFL is in a different business than virtually every other sports property and it operates on a totally separate plane. Two strengths that they have are, one, the size of their audience; the NFL dwarfs everyone else, and there's really no comparison. And then, important in a world where new entities are entering the distribution of live video and the distribution of sports, the NFL is uniquely well-situated to move people to new platforms. Viewers [will migrate] to whatever platform [the league appears] on.

What to expect from the next round of NFL rights deals, in 2021-22:

Chris Bevilacqua, co-founder, Bevilacqua Helfant Ventures (BHV): There's no question [the NFL is] going to make a lot more money this time around. What I'm most interested to see is what's going to happen with all these new potential [digital] distribution platforms. I think that they will be a market maker of sorts somewhere in that ecosystem. I can see the NFL rearchitecting the way they package all their games: rejiggering the packages by daypart [rather than] by AFC and NFC. That allows them to come into the market with a much different look. I'm most curious to see how they rearchitect and how they go into the market because I do think they will have multiple tech players at the table here. The question is, what piece are they going to be trying to sell them?

Pearlman: If I were working with the NFL, I'd want to focus on a couple of things. Obviously, they are famously focused on reach, and they will continue to do so. Broadcast TV will be a part of the mix, but they also are going to want to explore new platforms and really leverage their capability to make or break a platform and drive their fans to that platform. I think there will probably be a combination of those things in this next series of deals, and there will undoubtedly be massive increases in their future. And then, of course, by strengthening these new platforms, they will be emboldening new bidders, which is always great for sellers.

On the potential for a digital-media company to win a primary NFL rights package:

Bevilacqua: I'm not convinced that [the NFL is] going to sell a primary package on Sunday afternoon to a big tech player, [which doesn't] have the kind of reach that the NFL is looking for. I don't see them doing that. I see them trying to carve that out like they like have today with Thursday Night Football, where they have a broadcast partner, a cable partner, and a digital partner like Amazon. I think you'll see it'll look more like that than Amazon's just buying Monday Night Football.

Pearlman: I couldn't agree more. The NFL has done a number of digital deals with the Amazons and the Twitters, but those have not had as much consequence in terms of dollars or the role that they play within the NFL's television world. I think, this time around, there will be a material package secured by a digital player, but it will not be one of the primary packages. I think people often talk about the digital bidders as if they were all the same, but they're very different. They have different ambitions, different levers that they can push, different objectives, different business models. So as you start to think about which bidders might make sense for the NFL, I think you need to think about who can make the most out of the rights that they would secure. People throw Google, Facebook, and Amazon into the same bundle, but it's really a mistake.

Adam Schwartz, SVP/director, sports media investment team, Horizon Media: I have a slightly different take. I think that there might be one window that they do exclusively sell to one of these [digital] bidders just because the money is going to be so big in the grand scheme of things. I wouldn't be surprised if they broke off a portion of the Sunday-afternoon window and tested it out. I don't think it will be a long-term deal similar to what they're doing with broadcast, but I do think that they might test these things and we'll see some shorter deals similar to what they've done with Thursday Night Football over the years.

On which league is most likely to sell an exclusiv

LINK:	https://www.sportsvideo.org/2019/10/23/tv2020-sports-rights-values-are...
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