This week, Sinclair launched its long-awaited regional sports streaming service Bally Sports Plus, adding it to a long list of direct-to-consumer services that RSNs, leagues, and teams are cooking up to further monetize America’s insatiable sports appetite. But while sports fans may revel in their newfound viewing flexibility, every new DTC sports option is a reminder that the traditional linear broadcast sports model that has made everyone fat and happy for so many years faces unprecedented disruption. The only thing keeping the traditional TV model from imploding under the weight of cord-cutting may be sports and to a lesser degree news, whose live and immediate nature makes those genres less valuable in the largely on-demand world of SVODs and AVODs. But news is everywhere. And barring wars and weather events, people don’t necessarily require the visual element to consume news as long as they can read. Sports content is different. It’s about the thrill of the game. It’s about watching live, not knowing what will happen, in awe of athletes mastering feats well beyond our own abilities. They are the people’s superheroes.
This spectacle of sports might be the only real anchor left holding linear TV in place. Without it, cord cutting could accelerate beyond the slow and manageable sub decline that has given MVPDs time to offset those losses with broadband and mobile gains as cable networks grow their DTC businesses to offset eroding license fees. This week, Sinclair COO Robert Weisbord told Broadcasting+Cable that he doesn’t worry about the effect of sports streaming on cord-cutting, which obviously has been eating away at Sinclair’s retransmission consent fees for years. Rather, he sees DTC sports apps as a way to access viewers who have already cut the cord, arguing that “certain demographics” will never leave linear TV no matter how many DTC options become available. But while it’s hard to know how many people still subscribe to cable’s linear video product mostly for access to live sports, it seems logical to assume that as more live streaming rights leave linear TV, so too will many linear TV viewers who can no longer justify the expense.
If you really want to understand the slow-moving coup that’s taking place with sports rights, look no further than cash-soaked Apple TV+, which started live streaming Friday night doubleheader Major League Baseball games in April. That arrangement now seems certifiably cute when compared to its announcement last week of an unprecedented, 10-year deal with Major League Soccer to exclusively live stream every single MLS and League Cup game with absolutely no local blackouts or restrictions starting with the 2023 season. Every. Single. Game. This would have been considered insane just a few years ago. But not anymore. The MLS wasn’t shy about rubbing the deal in the face of linear sports nets and traditional distributors, or even virtual MVPDs for that matter, when it declared on its website: “One place for everything. No need for [a] traditional pay TV bundle.” Ouch.
Next? In the short term, Apple won’t convince the MLB, NFL, or NBA to give it unrestricted reign over all its games. Even if Apple ponied up the equivalent of what those leagues make from current TV rights (and with a sick $200-plus billion in cash on hand, Apple certainly could), the outcry from fans suddenly forced to pay for Apple TV+ in order to access games might be too much of a burden to bear. Of course, that’s what they said when “Monday Night Football” went from free ABC to pay-TV ESPN several years ago, and it ended up working out okay. Might Apple pay for non-exclusive rights to air games? Perhaps, but more likely is the MLB model in which it carves out a specific niche like the Friday night doubleheader. It’s a nice incentive to subscribe. But it’s not every game for 10 years.
Just for fun, though, imagine what it would cost Apple to steal America’s most lucrative and popular sport – professional football – from Amazon, CBS, ESPN, Fox, and NBC, which all just signed an 11-year deal to collectively pay $110 billion to air NFL games. See above. Apple could easily cough up $10 billion annually. And now it’s got 11 years to schmooze the NFL, which as we all know is close to signing over NFL Sunday Ticket to Apple TV+ for a reported $2-3 billion, starting with the 2023 season and likely spanning years. The deal may also incorporate the NFL’s upcoming NFL+ app that launches next month. Could Apple iPads soon replace all those Microsoft Surface tablets we see so often during games? (Tom Brady needs something new to smash, after all.) Apple tends to play the long game, and it’s not unfeasible that it will use the next decade to plot and scheme its way to a massive NFL deal that starting in 2034 makes Apple TV+ the only place you can watch NFL games. Of course, considering that Apple would need to pony up billions and finally start working with advertisers, such a gargantuan move seems unlikely, even 11 years from now. But it’s fun to think about.
Apple isn’t the only streamer that will be bidding for major sports rights in the coming years, but its cash position means that it can bide its time and gradually work its way up to larger deals as it goes. So many leagues would jump at the chance for MLB-like deals right now. And if cord cutting continues or accelerates, someday they may be more amenable to the kind of exclusivity that MLS was willing to entertain. Of course, remember that MLS was only getting $250 million a year in TV rights, a far cry from the NFL’s roughly $10 billion a year. But Apple – as well other SVODs and AVODs like Netflix and Hulu, not to mention major FAST-live channels – might be able to ease their way into sports dominance, with linear TV’s decline likely accelerating as a result. A new report by Parks Associates this week suggests that traditional pay-TV subscriptions could dip to 76.7 million homes by 2024, its lowest point ever and 27% lower than in 2014. None of this is going to unfold suddenly like the hammer thrown at Big Brother during Apple’s famous 1984 Super Bowl commercial. Rather, the marketplace will turn the crank slowly, gradually pulling up linear TV’s last anchor of sports methodically until consumers perhaps end up pining for the days when all the big games were on free over-the-air television. History tells us consumers don’t care about industry economics. But perhaps they should.
