The Future of Watching Sports
On October 22, 1939, NBC aired the first televised NFL game. Over 80 years later, Amazon Prime Video streamed the first NFL game that was exclusively accessible via a streaming platform. What started as two cameras and eight staffers broadcasting to 1,000 television sets has grown into a worldwide multi-billion dollar industry. Local, national, and international networks bid on the rights to broadcast live sporting events from the Olympics to the World Cup to every league of every sport in every country around the world.
But with the continued rise of streaming platforms, many of which have launched in the last 18 months, the rights to stream live sporting events are increasingly more valuable. This article dives in to the nuts and bolts of sports media contracts, and what rightsholders and streaming platforms should consider in the new era for watching sports.
Sports Broadcasting Agreements
Various leagues and teams control the rights to broadcast their live sporting events, and they license those rights to the various TV networks and increasingly, to streaming platforms. But in addition to the dollar value and terms of these agreements, media rights deals also need to cover the scope of the rights being licensed, whether or not the license is exclusive, the applicable territory, and often, the marketing/sponsorship opportunities for the rightsholder. In the context of streaming platforms, each poses its own set of legal considerations.
Scope and Exclusivity
Whether via broadcast, cable, or digital means of exhibiting content, there have never been more ways for leagues to reach viewers, and they are incentivized to exploit all of them. Networks, which now have their own streaming platforms, seek to widen the scope of rights as much as possible in an effort to preserve whatever cable revenue is left while adding new digital subscribers. A few days ago, for example, Disney/ESPN announced its broadcasting agreement with the NHL through the 2027/28 season. Unlike most other studios, Disney has the luxury of several streaming platforms, including ESPN+ and Hulu, which will be exhibiting games as well.
Meanwhile, newer entrants to the sports broadcasting world, such as Facebook, Twitter, and Amazon have historically been willing to agree to a narrower scope of rights that covers digital streaming but not cable or broadcast TV. Some even sublicense digital rights from the networks. But now that cable is on the ropes, it could be time to deliver the knockout punch.
By making games exclusively available digitally, streamers have an opportunity to accelerate the trend in how fans watch. Of course, the leagues themselves are not quite as excited about the decline of cable and would prefer to be able to license television and digital rights separately and ideally, make significant revenue from each stick of rights. But in all likelihood, the 2020s will continue to see tech companies bid for exclusive rights, meaning that sports fans will cease flicking channels and start opening apps.
With their global reach, streamers can make it easy for any of their subscribers to access their content anywhere in the world. The only thing that stands in the way is what territory they are able to negotiate in their license agreements. Similarly, broadcasts are often licensed for a particular language. But today, technology makes it easy to give viewers the ability to choose what type of commentary they want to hear. Streaming platforms will increasingly negotiate for rights to all languages in all countries that are available to grow their brands globally, even if that is a potential future objective.
With Disney launching Star+ for international markets and Amazon already exhibiting Premier League games in the UK, this process is already under way. And it’s possible that international sports organizations such FIFA and the IOC will see some value in broadcasting via the same platform anywhere in the world.
Sponsorship and Marketing
Television networks continue to entice sports leagues with sponsorship and marketing opportunities. Free TV relies on advertising revenue, and it is common for networks to reserve certain advertising slots for the leagues themselves. While streaming platforms can similarly offer ads, they also have the ability to actively engage with viewers to create user-generated content and endless opportunities for leagues and advertisers.
According to one perhaps not-so-“wild prediction”, we might see a move away from a single professional broadcast into a more distributed and customized model, and Amazon’s ownership of Twitch is a great illustration of this concept. As technology continues to advance, tech platforms could theoretically make every angle of every game of a particular sport available to their users, enabling subscribers to customize their own live broadcasts. Fans and influencers could conceivably start their own live commentary and be granted access to live footage that has historically been reserved for the studio control room.