future of

sports rights

in streaming

is drama

Andrew Rosen

Andrew Rosen is the founder of PARQOR LLC. He authors Medium Shift, a monthly column on The Information tracking the transformations underway in the media business.

There is an uneasy tension in the sports rights model across cable, broadcast, and streaming.

On the one hand, cord-cutting is eating away at the extraordinary scale of linear, which counted more than 105 million cable TV households in the US over a decade ago. The pricing of past sports rights deals reflected that, and not so much the promise of streaming.

Today, there are around 60 million homes with cable access, and over 75 million if we include virtual cable distributors like YouTube TV and Fubo TV.

On the other hand, new sports rights deals must assume both the declining scale of cable network distribution and the growth of streaming. The recent NFL deal has Paramount’s CBS, Comcast’s NBC, and Disney’s ABC and ESPN all distributing games across both linear and streaming platforms (Fox will distribute via linear, only). Deals struck in the past few years by the NHL, the PGA Tour, and WWE also have versions of the linear plus streaming business logic built in.

There are growing questions emerging about the business model of streaming. Legacy media streaming services are struggling to scale and to turn a profit. The worry is that some may not be around in a few years. In some cases, like with Paramount Global, their negative free cash flow and junk-rated debt are legitimate reasons for partners like the NFL to be worried.

Four scenarios

The uneasy tension creates four possible scenarios:

Mark Cuban and aggregate audiences

The NBA deal

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Can insurgent leagues capture market share from the NFL?

This topic kept coming up in our various events: the NFL is God. And God is immune to all the forces that are challenging the other incumbent leagues like the NBA and MLB. What makes the NFL so powerful? Is it a better TV experience? Is it a better sport? The rest of the world would argue against that. (And they probably want the word football back).

Better storytelling can bring new audiences to traditional sports

The NFL is built on initial scarcity. It started with two games broadcasted one day a week in the autumn. Then came Sunday Night Football, then Monday Night Football. Then Thursday Night Football followed that. Now we have Sunday Ticket and the Red Zone channel. All of that football turned into fantasy football leagues, online gambling. And all of that engagement is padded with endless expert analysis that fills in the gaps in between all the snaps. Is this ecosystem too strong to be disrupted?

This question unlocked a lot of thinking.

What does a league need to thrive? How can an old sport evolve and find new audiences? Can a team of insurgent leagues take down the mighty NFL?

Yes, but...

Sports need tribes to survive