Media rights for live sports have never been more valuable. That isn’t news. You can read any undergrad level paper on the state of the media and that line will almost certainly be in there.
Because that line of thinking is so prevalent, I have noticed many people framing this time in history as a bubble. Sports rights are no different than the housing market or dot com businesses. What goes up must come down and everyone wants to be able to say they saw the crash coming before it actually happened. They want economists to mention their names in the same breath as Michael Burry’s.
It’s time to knock that off. Recent news proves that sports are as valuable as ever to media companies. Trying to predict when that reality will change is a fool’s errand right now.
Both the NBA and NFL shared news recently that told the rest of us that things were just fine. They aren’t doing business as usual, because every time they cut a new deal, it’s for an amount and to do things that we’ve never seen before.
Speculation about the NBA’s TV future swirled for more than a year before we finally started getting some news. Many assumed that the league was facing some hard truths. Why weren’t ESPN and TNT bending over backwards to get new deals done? Surely, it meant Adam Silver had an inflated opinion of the NBA’s value when he entered negotiations.
It turns out that Silver, even if he wasn’t 100% correct about being able to land $70 billion for the league over the lifespan of its new deals, knew what he was doing. ESPN and TNT were never going to get a deal done quickly, because it behooved the NBA to let that exclusive negotiation window close.
Now, look at where things stand. ESPN got a new deal done, Amazon has come on board as a new partner, and there’s a bidding war for the NBA’s least valuable TV package. By the time we learn about the future of NBA League Pass and the In-Season Tournament, Silver might just be serving the rest of us crow pie as we add up the total value of all of these new deals.
Then there’s the NFL. Every time we think the league has zagged too far away from the zig its fans and media partners want, its media strategy pays off. The league is adding more streaming exclusives. Why? Just look at how the Wild Card Round game between the Chiefs and Dolphins performed on Peacock. In the streaming world, where everyone not named Netflix is struggling to maintain and grow marketshare, NFL games are priceless resources.
Actually, it should be pointed out that there’s one other streamer not struggling to keep its head above water – Amazon. Do you know why that is? I’ll give you one guess. It shouldn’t be that hard. Do you even know anyone that watched that Lord of the Rings show that cost the company nearly half a billion dollars to make?
It’s Thursday Night Football. I loved Fallout and Mr. & Mrs. Smith. The Boys is a franchise that will be generating content for years to come. None of them delivered an audience half the size of what a meaningless Week 8 game will each football season.
Speaking of Netflix, it appears that the NFL got the company famous for not wanting to do business in the live sports world to budge off that position. Even just one day of action is valuable enough for Netflix to tread in new waters.
Netflix preferred for years to be sports-adjacent as opposed to being in business with leagues and carrying live games. The company’s Drive to Survive and other documentary content was enough to satisfy its audience’s desire for sports content. The streamer had a presence in football, auto racing, golf, tennis and so much more without having to pay huge rights fees.
Then the WWE became available. Netflix saw the best fit for its philosophy. It would have made sense to stop there, but then the fight between Jake Paul and Mike Tyson was announced. Adding the NFL would be a logical next step.
Netflix waited and watched. It watched Apple botch a deal with the NFL. It watched the clunky roll out and performance of that company’s deal with the MLS. It watched the NFL, the Premier League and college football turn Peacock into a must-have for cord-cutting and cord-never sports fans.
It could draw a blueprint, watch something similar play out in real time and then break out the eraser to make necessary changes. Netflix didn’t dive in. It waited until it saw a way it could be competitive in the game.
Even Major League Baseball is mining new territory for sports rights. A deal with Roku could open up a new world. When we talk about streaming deals for America’s four major leagues, we have largely kept the conversation to the major platforms. Could this be the start of Roku and other FAST channel providers making their presence felt in rights negotiations? If so, it would mean that the bubble on rights gets bigger, not smaller.
There will likely be a day when sports are not as valuable to broadcasters and streamers as they are right now. It’s an inevitable reality, but predicting it is nearly impossible. Every time we think the dollar amounts have become too high or the offering for said amounts have become to small, we quickly discover someone wants to pay.
I still believe that the value of personalities is largely artificially inflated. I can’t imagine being able to justify a huge raise for someone like Stephen A. Smith in the new television landscape. Maybe that is a bubble bursting that we can point to. For live games though? The more we try to look smart by predicting the beginning of the end, the more we are all proven foolish.
Demetri Ravanos is a columnist and features writer for Barrett Media. He is also the creator of The Sports Podcast Festival, and a previous host on the Chewing Clock and Media Noise podcasts. He occasionally fills in on stations across the Carolinas in addition to hosting Panthers and College Football podcasts. His radio resume includes stops at WAVH and WZEW in Mobile, AL, WBPT in Birmingham, AL and WBBB, WPTK and WDNC in Raleigh, NC.
You can find him on Twitter @DemetriRavanos or reach him by email at DemetriTheGreek@gmail.com.
