Let the sports television wars begin!

Over the last few months, the first shots have been fired in a multi-million-dollar war for control over the sports television landscape.

For the past decade, if not the past two decades, ESPN has controlled this ground, at least on the cable side, leveraging its strong portfolio of rights across multiple sports to build the biggest brand in cable television. Sports is one of the few pieces of programming that attracts the most valuable viewers, and ESPN has used it to become the most profitable division of the Walt Disney Company and one of the most popular, well-known, and notorious brands in America, while extending its reach around the world. And ESPN’s dominance has meant that most sports need to play by ESPN’s rules or risk irrelevance.

Now others are eyeing ESPN’s turf. In fact, four of the other five major media companies have at least partially positioned themselves for their own piece of ESPN’s riches. All had some stake in the game before, but all have also attempted to set themselves up to become much more serious at the sports rights game, and ESPN only raised the stakes when it broached a whole new world in what’s possible on cable when it snagged the rights to the BCS. Comcast fired the first salvo by acquiring NBC Universal, expressing its intent to turn NBC Sports into an entity on par with ESPN. Others have made their own moves to keep up, with Fox expressing its intent to bring more sports back to FX and CBS rebranding the CBS College Sports Network to drop the “College”. Billions of dollars are at stake, and the major media companies want a piece of the action.

Playing this game comes at a price, and increased competition will mean increased rights fees, which is very bad news for sports on broadcast television – cable networks collect money from subscriber fees in addition to advertising, which broadcast hasn’t really branched into, “retransmission consent” fees collected by individual stations notwithstanding – and very good news for sports leagues and conferences. Yet it’s very possible they’ll play a significant portion of the game with none of the suitors, instead choosing to play it with themselves. Over the last decade, the league-owned network has become all the rage. All four traditional major professional leagues have their own networks, as well as two college conferences (with a third soon to join them), and while it’s common for such networks to be run or launched by the media companies (NBA TV is run by Turner, for example, and the Big Ten Network is run by Fox), it’s probably more the norm for leagues to keep their networks to themselves, as with the NFL Network.

There are five contenders to the sports programming prizes, each seeking to obtain as many of them as they can, with the ever-present specter that the leagues granting the prizes may choose none of them and keep them to themselves.

As the incumbent ruler of the roost, ESPN remains the best positioned of the bunch, but time will tell if it can keep its advantage. ESPN has just about everything the other contenders could ask for. “The ESPN family of networks” has no equal among the other contenders, and the jokes about “The Ocho” become less funny every day. ESPN boasts not one but two full-time sports networks seen by the vast majority of the country (the only ones of their kind), including what is for most the sports highlight show, plus a broadcast outlet (available in a pinch even if they sometimes seem to want to kill sports there), a college sports network (with rights most competitors would die for), a sports news network (also the only one of its kind), a Spanish-language network, a 3D network (also the only one of its kind, although other networks have produced 3D broadcasts), and just for good measure, a classic-sports network. Throw in a video-streaming service (further advanced than any other), a radio network, a network for mobile devices, heavy investment in international rights, and a virtual monopoly on college-sports syndication, and ESPN is basically a one-stop shop for anything a league could need.

But now Comcast’s merger with NBC Universal has sent the message that they intend to challenge ESPN for the throne. Certainly they seem to be the next-best positioned, being the only other contender with anything resembling the all-sports network ESPN represents, bringing two with the soon-to-be-rebranded Versus and Universal Sports, not to mention the sport-specific Golf Channel (whose brand is already appearing on golf broadcasts on NBC). The merger coupled all of this with a broadcast presence on NBC, and while they don’t have a Spanish-language sport-specific network, they do have a Spanish-language outlet with Telemundo and mun2. Comcast also has something ESPN doesn’t: a collection of regional sports networks, which builds a strong brand for them in local markets. They also benefit from synergy with their cable operations, something no other contender can boast.

But Versus still has a long way to go before they have the quality of sports contracts ESPN has, NBCSports.com is well behind the other contenders online, NBC itself continues to struggle as a broadcast network, the closest thing they have to a college-sports network is the mtn., and the recent departure of Dick Ebersol cripples Comcast’s ability to pick up strong sports rights without one of the most respected names in sports broadcasting.

Potentially the wild card in this battle is Fox, the only other contender with a strong presence on both broadcast and cable. Fox is also the only other contender with its own collection of regional sports networks, which remains a bigger brand than Comcast’s, as well as FX, Speed, Fox Soccer Channel, the Big Ten Network, and Fox College Sports, all of which Fox has taken steps to unify under the Fox Sports brand as of late. Fox doesn’t have a sport-specific network other than their past efforts to make one out of FSN, but they do match ESPN note-for-note in various areas that other competitors don’t: a sports-specific Spanish-language network, a nightly highlights show on FSN, a radio network (which, unlike ESPN Radio, lacks any rights and might not be pursuing any), and being ESPN’s main competitor for international rights. All this makes Fox almost as well-positioned to challenge ESPN as Comcast is.

Turner is the next-best positioned; in fact, with NASCAR, MLB, NCAA Tournament, and the crown jewel, NBA rights, Turner has the best existing presence on cable of any contender except ESPN, and that has led to the development of some of the better sports streaming capabilities. Already stocked with sports on TBS and TNT, Turner’s taking of a share of the NCAA Tournament led to an expansion of sports onto truTV, and that appears to have gotten the idea into their minds of adding more sports onto that network; they were reportedly considering putting the NHL on that network. But Turner’s big Achilles heel is its lack of any sort of broadcast presence; I doubt the CW, which parent company Time-Warner is a partner in, will ever find sports to be in line with its target audience. (Which is too bad, because sports would be the best way for the CW to truly become a fifth major broadcast network.)

The remaining broadcast network is CBS, but CBS doesn’t have much other than its own broadcast network. They may be looking to change that: CBS took what was once ESPNU’s truest competitor, the CBS College Sports network, and dropped the “College” from its name, making it simply CBS Sports Network. But CBS Sports still has nowhere near the distribution of even Versus or ESPNU, and it’s doubtful that CBS would be able to snare any truly valuable rights for the network. CBS also doesn’t have much of anything else either; they don’t even hold a stake in the Westwood One radio network anymore.

But while CBS brings a strong broadcast presence (at this point, maybe the strongest broadcast brand) but has no presence on cable, Turner has one of the strongest presences on cable, but nothing on broadcast. It’s no surprise that the two companies, already partners on the CW, make natural partners for sports as well, each complementing the other with their strengths, as was demonstrated most readily when they joined forces to cover the NCAA Tournament. For big events that require both a broadcast and a cable presence, the combined forces of CBS and Turner can present a formidable force where neither would even be a contender individually.

These contenders have already started facing off over some significant sports rights, and the battles have already taken on some interesting dimensions, with ESPN picking up surprisingly few wins. Fox fired the first salvo when it picked up cable rights to the Big 12, putting games on FSN and FX for the next 13 years. Things got interesting when ESPN and Fox tag-teamed on rights to the Pac-12, apparently in part to keep Comcast from establishing a foothold in the market. This belatedly gives Fox the beachhead they were seeking in college sports during their time controlling the BCS contract. Comcast then took control by renewing NBC’s and Versus’ existing NHL rights.

However, the big prize was the much-delayed race between Fox, ESPN and Comcast for the rights to the Olympic games, America’s second-most important property. Despite conventional wisdom holding that the loss of Ebersol would hurt Comcast most in Olympic negotiations, on Tuesday NBC kept control over the Olympics through 2020 by paying nearly twice as much as the competitors. The outcome was a bit of a surprise, both that ESPN didn’t pay more after blowing a lot of smoke about making a play for the Games, and that NBC didn’t pay less, especially after losing substantial sums on the most recent contract, speculated to be among the reasons for Ebersol’s departure (in the end, this round wound up being a replay of the last, Ebersol-led bid), and blowing a lot of smoke about fiscal responsibility.

But Comcast apparently decided that a four-Games bid would ultimately cost less for them, and hopes to make more money in part by spreading the wealth to its cable networks, including Versus. However, unlike a lot of “professional” analysts I’ve read, I’m not convinced a two-week event every two years is going to give Versus the push to achieve ESPN-like legitimacy or carriage fees. NBC did indicate a commitment to showing more events live, including all of them by Rio 2016, but it’s possible many of them will only be available online. The biggest downside? ESPN continues to be shut out of the two events that would most take advantage of their family of networks, the NCAA Tournament and the Olympics. The former in particular would have been a great fit given ESPN’s existing commitment to college basketball.

Where will the next battles be? There will certainly be some interest in the Big East, but the next truly big showdown will be over Major League Baseball, whose current contract ends in 2013. That should be as entertaining and gripping as the battles we’ve already seen – they all should. And I’ll be getting the popcorn ready to keep an eye on all of them.

.5 2 1.5

0 0

Leave a Comment