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- It's more complicated than ever to watch sports — here's why!
It's more complicated than ever to watch sports — here's why!
If you plan to watch the entire upcoming NFL season, you'll need to subscribe to several platforms to cover all your bases.
First, you'll require access to traditional broadcast channels that carry Fox (FOXA), CBS (PARA), and NBC (CMCSA), along with cable access for ESPN (DIS). Additionally, you'll need to subscribe to over-the-top streaming services like Netflix (NFLX), NBCUniversal's Peacock, Disney's ESPN+, and Amazon Prime Video (AMZN).
For out-of-market games not shown in your local area, Google's YouTube TV (GOOG, GOOGL) holds the exclusive rights to NFL Sunday Ticket, providing nationwide access to these games.
The NFL season exemplifies the increasing fragmentation of the sports viewing landscape, as legacy media companies and tech giants vie for lucrative media rights. The high demand for sports content is driven by media companies' desire to attract large, loyal audiences, enabling sports leagues to negotiate higher prices for broadcasting rights.
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The NBA is currently negotiating its next media rights package, potentially worth up to $75 billion. The league's current contract with Warner Bros.' TNT Network and Disney's ESPN expires at the end of the next season. There are speculations that WBD might lose these rights to NBCUniversal, and Amazon is also negotiating for an exclusive streaming deal via Prime Video.
College sports have also experienced increased fragmentation. Recently, Warner Bros. secured several College Football Playoff games in a five-year agreement with ESPN.
War For Eyeballs
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Source: Yahoo Finance
The competitive scramble for sports rights isn't new, but the players have changed.
In the past, various networks within the cable bundle often competed for the rights to broadcast certain games to boost viewership and increase affiliate fees, which are payments from pay-TV providers to network owners for carrying their channels.
The advent of streaming has significantly transformed the landscape, especially with the financial muscle of Big Tech.
"We now have the old model combined with this new model, making the fragmentation seem much more pronounced," said Jon Christian. He described the current media environment as a "war of eyeballs." He added that there's more revenue potential from rights now, as they can be divided between traditional linear broadcasts and digital platforms to maximize earnings.
Consequently, the industry has seen more à la carte deals with streaming services as leagues aim for diversification.
Netflix, for example, will host two Christmas Day NFL games this year as part of a three-season agreement with the league, reportedly paying around $75 million per game, according to the Wall Street Journal.
Similarly, Peacock will stream one exclusive in-season game after airing an exclusive wild card playoff game last season. The platform paid approximately $110 million for the playoff game's rights, which resulted in a notable increase in subscribers.
At first glance, these deals appear to be beneficial for both the streaming services and the sports leagues.
However, this fragmentation isn't ideal for consumers. It leads to higher costs, more subscriptions, and increased confusion about when, where, and how to watch the games.
Amid this complexity, some leagues have taken a different approach to media rights. For instance, Major League Soccer consolidated all its rights into a single exclusive package with Apple (AAPL) in 2022.
Additionally, there's been a rise in streaming bundles as media companies aim to consolidate costs, reduce subscriber churn, and shift power away from Big Tech.
"These platforms are trying to simplify access," Christian said. "But it's not always a single bill you're paying. This can frustrate users. Still, if you're passionate about a team or sport, you'll find a way to watch it."
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