As we approach the end of the year we see the arrival of the season for reflecting on the past and predicting the future, and in the sports media business there’s always something going on that make the business of predictions exciting; whenever big rights deals come up for renewal the possibilities seem endless for what might happen, and as the legacy television industry struggles to come to terms with the advent of cord-cutting moves taken now will have ramifications for decades to come. John Ourand’s annual prediction column in the Sports Business Journal is generally good for a mix of bold predictions, assessment of the current landscape, and surprisingly odd analysis for someone so well-connected. Last year’s column, though, proved to be more spot-on than I thought at the time, especially with regard to the NFL’s rights renewal and the shutdown of NBCSN, so it can’t be dismissed out of hand. With that in mind, here’s my take on Ourand’s predictions for 2022:
Amazon buys a nearly 50% stake in the NFL’s media properties: This would mean Amazon would take a significant stake in NFL Network, NFL RedZone and NFL.com, giving them a linear television presence for the first time. I think I saw someone wonder if this meant all of Amazon’s Thursday Night Football games would end up on NFL Network, but that would kind of defeat the point of picking up the rights for Prime, for both parties.
Disney, DirecTV carry NFL Sunday Ticket: I read somewhere that the NFL prefers to have relationships with as many different entities as possible to explain why Amazon was a long shot to pick up Sunday Ticket. In my view, this overlooks the value of synergy, especially in the streaming era. Obviously the league already has a relationship with Disney, but Amazon’s package that already requires signing up for a streaming service feels like it would provide greater synergy with Sunday Ticket than Disney’s package that’s still heavily tied up with legacy linear television. Perhaps the clinching factor favoring Amazon is the original Red Zone Channel: if Ourand’s right, presumably Amazon would be producing one version of RedZone while ESPN would be producing another, assuming DirecTV didn’t continue to produce the Sunday Ticket version, and with Sunday Ticket no longer exclusive to a linear television service there’d be less reason for separate versions of the channel. And would ESPN distribute its version of RedZone to ESPN+ subscribers that don’t subscribe to Sunday Ticket, as I imagine Amazon would? Having a single RedZone channel that can serve as an outgrowth of and advertisement for Sunday Ticket while still providing value to people who can’t afford it just makes sense. Ourand says that Amazon “wants the package and has much deeper pockets than Disney” but “will not engage in a bidding war for these rights”, but if Amazon and the league are smart they’ll recognize the synergy available in tying Sunday Ticket to the league’s other media properties.
In general, the paradigm that prevailed in the cable era of hopping around to many different networks owned by different entities to watch your favorite team’s games probably won’t fly in the streaming era. The cable bundle gave you access to the entire universe of content falling under the banner of what was called “television”, merely selling you the ability to access it all; despite the sky-high cost of ESPN and other cable networks, the games carried on basic cable were effectively “free” to the end user (one reason why cable operators rarely win in carriage disputes: customers don’t see why the operator shouldn’t be giving them access to everything). In the streaming era, though, the more entities you have a relationship with the more services the fan has to sign up for, and the more expensive it gets for them, unless you make all the games available on all the services (something that has some limited precedent for entertainment content that may be available on two or more services at once). The cable bundle provided the fan with one bill that gave them access to all of their local teams’ games; any sport that doesn’t follow suit is going to end up losing large chunks of all but their most wealthy fans. I’ll talk more about how this affects other sports later in both this post and in another one I hope to have by the end of the month, but this point is especially difficult for the NFL to come to terms with, not only because of their cultural disposition towards having as many partners as possible, but because the NFL is so much bigger than everything else on television that just about any entity with any interest in American sports has to have a relationship with them. The league can’t just abandon ESPN, CBS, Fox, or NBC.
The good news is that all their games are on free broadcast television in the local markets of the teams playing, but the bad news is that, in an age where the purpose of linear television is to deliver live events and other content that large numbers of people want to consume at once and over-the-air television is especially important for that given the bandwidth constraints of non-wired streaming, that’s basically table stakes for a sport as popular as the NFL. The league already has given streaming rights to their legacy partners to put games on ESPN+, Paramount+, Tubi, and Peacock, with ESPN+ and Peacock getting exclusive games, but as a long-term distribution strategy that threatens to alienate fans. Having a single streaming service with both an exclusive primetime package and an access point to every out-of-market game, essentially allowing access to every single game not already available for free other than ESPN, ESPN+, and Peacock exclusives, would establish Amazon as the streaming service of the NFL, a place where the league puts essentially all its games while allowing free access to one or two games at a time (and as the content distribution landscape continues to evolve the specific linear television network a game airs on may be all but meaningless, meaning the streaming service(s) a league puts their games on may be the only brand(s) that matter(s)), and that’s why deepening their relationship with Amazon might be best for the league in the long term. But it’s also why ESPN desperately wants to secure their relationship with the NFL for the streaming era so they have a chance to continue being “the worldwide leader in sports” without letting Amazon establish too much of a presence with the kingpin of American sports, and it’s why the league might be more inclined to listen to them than put all their eggs in one basket.
By the way, it’s interesting to contrast this with last year’s prediction, which said that Sunday Ticket would leave DirecTV entirely, which I said the writing was on the wall for. But the league and DirecTV are clearly still interested in doing business with each other, albeit non-exclusively, and there’s been more appreciation of the need to use linear television to deliver Sunday Ticket to bars and other establishments (not to mention areas without true broadband) with minimal lag and interruption.
Big Ten signs deals with CBS and Fox: Ourand says that CBS “wants high-quality college football games for its Saturday afternoon window”, but the question is whether they can afford it (though it’s worth noting that ViacomCBS’ market cap is slightly higher than Fox’s and their 2020 revenues were twice as big). CBS lost the SEC contract in large part because they needed as much money as they could scrounge behind the couch cushions for an NFL deal, and while that’s now a fixed cost, CBS was paying so much below market value for SEC games that while they’d probably pay less than what ESPN’s paying for their old SEC deal for Big Ten games, they’d probably pay significantly more than what they were paying for the SEC, even without Michigan-Ohio State or the Big Ten championship game. Speaking of which, I think CBS valued its status as having the undisputed “game of the week” in the SEC over the past quarter-century or so, which coupled with the SEC’s dominance over most of that time effectively “earned” the SEC’s place as the only conference in the only window on the CBS broadcast network. I don’t know that CBS would be willing to accept a place as a clear second fiddle to Fox where Big Ten games would be competing for spots with Big 12 and Pac-12 games, even if they might have first pick every other week.
It’s understandable why Fox would want a deal with a conference they wouldn’t have to share with ESPN (not directly stated by Ourand but clearly implied), but events over the past year may make the Big Ten understandably hesitant to ditch ESPN entirely. We’ve hit the third round of major paradigm shifts in college football in the past 30 years or so; the first round saw the advent of the sport’s first formal national championship system culminating in the BCS around the same time most of the sport’s independents joined conferences, the SWC collapsed and the Big 12 formed, and the first conference championship games appeared, while the second round saw the formation of the Pac-12 and 12-team Big Ten and the Big 12 brought to the brink of extinction by the Pac-16 proposal, followed shortly thereafter by the creation of the College Football Playoff.
Within the past year we’ve seen the CFP propose expansion to twelve teams and another round of conference realignment, and as in the last round, it’s raised the specter of ESPN as the Godfather of college sports. First Texas and Oklahoma stunned the rest of college football by jumping ship from the Big 12, a conference with relationships with both ESPN and Fox, to the SEC, a conference in business with ESPN alone, leaving the Big 12 staring at near-mid-major status and the other conferences looking at no real response to prevent the SEC from essentially locking in its place as the kingpin conference of college football; then after the Big 12 backfilled itself by taking schools from the American, the American backfilled in turn by taking schools exclusively from Conference USA, a conference with a highly limited at best relationship with ESPN and deeper ties with CBS, while ignoring arguably stronger schools (such as Coastal Carolina and Appalachian State) in the Sun Belt, a conference in business with ESPN alone. The Big Ten is arguably the strongest and most valuable non-SEC conference, but they may still be worried about finding the proverbial horse’s head in their bed if they abandon ESPN entirely. If ESPN-affiliated conferences don’t try to weaken the Big Ten, perhaps ESPN pundits can poo-poo Big Ten teams’ credentials to make and be seeded highly in the College Football Playoff. On the other hand, if the expanded playoff includes auto bids for Power 5 conference champions that would limit how much ESPN could really limit the Big Ten’s playoff presence, and if it gives Fox a piece of the playoff that would limit how much influence ESPN would have, real or perceived, over the committee.
Going back to CBS there are a couple of selfish, relatively minor, things that come to mind with this prediction. On the one hand, the famous SEC on CBS theme wouldn’t become wasted solely on the mid-major conferences populating CBS Sports Network. On the other hand? Steve Levy seems to me to be pretty clearly not the long-term answer for ESPN and Monday Night Football, and having him and his unserious demeanor calling the Super Bowl in a few years when it returns to ABC would feel like a slap in the face to the league and the biggest event in all of American culture, and it feels like ESPN knows that, because after NHL fans considered him the frontrunner to be ESPN’s main NHL play-by-play voice (even after Sean McDonough was linked to the job) he ended up being named a studio host, not a full-time play-by-play man at all. ESPN has historically been reticent to have a singular top play-by-play man that could become enough of a star to command more money, but it needs someone that can stand up alongside Jim Nantz, Joe Buck, and Mike Tirico as lead NFL play-by-play men worthy of calling a Super Bowl. Having already burned through two of their top play-by-play men in failed stints on MNF (McDonough and Joe Tessitore) and a third being a fan favorite but probably being too valuable on college football (Chris Fowler), the best option left that has the requisite gravitas, either already works for them or is likely to become available anytime soon, and is young enough to last more than a couple of years is probably Brad Nessler, by a large enough margin that if CBS managed to hang on to him by getting a new college football contract, I’m not sure where ESPN could go after that.
SEC leaves CBS a year early: I want to say that this could happen even without a CBS-Big Ten deal, but CBS may want to get a piece of Texas and Oklahoma in the SEC if they can and they don’t have another deal for the SEC to vacate their lineup for.
ESPN renews with Formula One with a big rights increase: One of the bigger what-ifs in recent sports media history has to do with the timing of ESPN’s Formula One deal vis-à-vis Comcast’s acquisition of Sky. The main reason NBC had for walking away from Formula One, the circuit’s desire to launch its own streaming service that would blunt NBC’s ability to sell Formula One content on Peacock (or the former NBC Sports Gold service), would have still applied and still applies now, but Comcast has to be smarting that they’re effectively producing significant sports coverage for a competitor, and I doubt they would have been so quick to walk away if they owned Sky at the time. Comcast clearly values the synergy between Sky and NBC on the Premier League, so I would expect them to go on a full-court press to bring back the rights to air on NBC, USA, and CNBC, perhaps with auxiliary coverage on Peacock. One problem, though, is that Sky’s rights don’t expire until 2024, two years later than ESPN’s deal, so NBC’s ability to use Sky’s deal to try and make a US deal more worth their while is limited, but they may be able to bump up the amount ESPN pays (hence Ourand’s prediction of a “big rights increase”) and convince F1 to limit ESPN to a two-year extension that synchronizes with Sky’s deal, something ESPN would likely smart at given their stated desire to reach a long-term extension.
In September Reed Hastings indicated that Netflix, which has seen success with its “Drive to Survive” documentary series, would “definitely consider” picking up F1 rights, but also acknowledged some hesitation as live sports rights is not in the company’s DNA and would cripple what has made Netflix the company at the vanguard of cord-cutting. Like Ourand, I don’t believe they would be a serious contender outside pushing up the price more. Netflix bidding for the rights would probably make NBC further inclined to get involved in the bidding, but if Netflix were to mount a serious push it would be a serious problem for NBC, as Peacock is only available in the US, UK, and Ireland at the moment, though that’s more than what ESPN+ serves.
MLS signs deals with ESPN, WarnerMedia: I don’t see a problem with anything Ourand says here except that it seems like WarnerMedia is de-emphasizing Bleacher Report as a brand for sports streaming, even as they haven’t, yet, put any live sports on HBO Max. My impression is that soccer fans aren’t entirely happy with Fox’s coverage, so they wouldn’t say no to ditching it, but WarnerMedia has no soccer presence after giving up on the UEFA Champions League after a year and a half so CBS or NBC would probably be more attractive destinations, and even Fox at least provides some synergy with the World Cup. On the plus side, in the last contract MLS established Saturdays as the day for most of their regular-season games but ESPN and Fox’s windows were both placed on Sundays as, among other reasons, they have college football in the fall. WarnerMedia has no weekend commitments outside the NCAA Tournament, so they could have a regular Saturday window for MLS. In Europe MLS rights are held by a hodgepodge of broadcasters with DAZN holding the rights in the most countries including Germany and Italy, and Discovery only holds rights on the Indian subcontinent, so a strong relationship with DiscoverWarnerMedia that includes domestic rights on TNT and consolidation of European rights on Eurosport could be attractive.
NASCAR negotiations get up to speed: Ourand predicts that NBC will be “tepid” about NASCAR rights without NBCSN, leaving ESPN to eventually pick up the back half of the schedule, and continuing the trend since NASCAR consolidated all its rights under a single banner of the back half of the schedule oscillating between NBC/Turner and ESPN. Because of the NFL, the only real alternatives to NBC for the back half of the schedule are ESPN and DiscoverWarnerMedia (as I mentioned when the latter merger was announced), but I’m not sure NBC is actually all that “tepid”, and I’m not sure ESPN would be the best alternative. ESPN was instrumental in NASCAR’s growth in the 80s and 90s, but my impression is that NASCAR fans soured on the Worldwide Leader over the course of their late-00s to early-10s deal, partly because of deficiencies in the coverage itself, but partly because of the perception that ESPN was becoming excessively “woke” for the sport’s rural, blue-collar, right-leaning fanbase, something I doubt has changed (though it’s not like the SEC has suffered from their deep relationship with ESPN). There’s also the fact ESPN doesn’t seem interested in producing its own motorsports coverage anymore. On the other hand, ESPN and Turner basically didn’t want anything to do with the sport and its cratering ratings anymore by the time the last deal was negotiated, resulting in the sport going to NBC by default, and while ratings have rebounded a little, if NBC is “tepid” ESPN and WarnerMedia aren’t likely to be any more enamored of getting back in the sport, and I feel like ESPN would be first to blink in that scenario. Also, I’m not sure NASCAR would be up for a WarnerMedia deal that doesn’t include a broadcast component.
Sinclair’s Diamond Sports Group stays out of bankruptcy/Bally Sports RSNs stay on Spectrum systems: As mentioned, I’m going to have much more to say about the state of the RSN marketplace in general and the woes the Bally Sports group is going through more specifically later this month. In particular, the notion that teams would be able to reclaim their local rights if Diamond Sports had to declare bankruptcy ties in with another of Ourand’s points. Regarding Spectrum, Ourand believes that while “negotiations will go public and get nasty”, Sinclair will still reach an agreement with Charter that has Spectrum paying about the same as it does now, which may be taken as a surprise given Sinclair’s flirtation with a direct-to-consumer play and Dish seemingly deciding to abandon the RSN marketplace entirely. I’d imagine Spectrum would fight hard for the right to at least tier the RSNs, and the effective monopoly legacy cable providers have in many urban areas coupled with potentially leaving DirecTV as the only operator carrying the networks in Spectrum regions (not to mention Spectrum being the only provider of any significance carrying the Dodgers in Bally Sports’ biggest market of LA) may put Sinclair in something of a bind, but if Spectrum finds they can’t weather the storm of local sports fans cancelling they may be inclined to give in. All this is expected to happen sometime in the first quarter, and I imagine Diamond Sports’ creditors will be watching it very closely, as if Bally is perceived to lose the fight with Spectrum I don’t see why they’d be inclined to give Sinclair any amnesty, because there’s no reason to think negotiations with anyone else other than DirecTV, certainly Comcast, would go any better.
Disney will not spin off ESPN: Quoting Ourand: “It’s been well reported that Disney executives have looked into the possibility of spinning off ESPN. It won’t happen this year, but could be fodder for my predictions column in coming years.” To quote another media reporter commenting on Ourand’s column, “it’s been well reported but not reported well.” Disney has denied the original report I linked to, and I’m inclined to agree with them as I don’t believe spinning off ESPN is a realistic option at least for most of the next decade. The problem is that ESPN and ABC probably have to be a package deal because of the points I’ve made about the purpose of linear television before, and at least for the moment, ABC has value at least as a promotional tool and content conduit for Disney’s streaming businesses. Worth noting that Fox slimmed its company down to just live-related businesses (the broadcast network and the Fox Sports, News, and Business networks) by selling everything else to Disney, yet quickly re-established entertainment production facilities and bought Tubi and began populating it with sports content, showing you can’t really own a linear broadcast network without some control over what gets aired there and, though less relevant to ESPN with their existing co-branded streaming service, streaming rights are too important to modern sports rights deals not to be caught without one. The synergy between sports, other linear networks, and general entertainment divisions is, at least for the moment, too irresistible for Disney to throw away too casually, though admittedly it benefits the ESPN end of the chain more than it benefits the Disney end. I get the concern that ESPN’s interest in establishing a solid sports betting presence clashes with Disney’s family-friendly image, but it’s not as though Disney hasn’t weakened that themselves over the years. All in all, I don’t see Disney spinning off ESPN for the foreseeable future.
FuboTV will cut a local pro team rights deal: Again, more on this later this month, but this also ties in with one of Ourand’s predictions from last year, when he suggested an MLB team would elect to go direct-to-consumer. I wasn’t sure that sort of thing would happen, and I wonder if Ourand coming around to the route I suggested – an agreement with a virtual cable provider or other streaming service – has more to do with logic like what I presented then, or with the improving prospects of Sinclair’s DTC plans rendering a team going DTC on their own unnecessary (or any non-RSN-led DTC approach being led by the league instead of the team). Then, as now, I suggested the team that would do this wouldn’t be the big-time MLB or NBA teams but a more obscure, unpopular NHL team, based on the fact that this path had been blazed by MLS teams reaching deals with YouTube TV and Amazon. (Incidentally, the fact that Los Angeles FC has apparently abandoned YouTube TV for Bally Sports may be a sign that this approach isn’t a viable alternative to a traditional RSN just yet, at least for teams trying to establish a foothold.) As for the outlet that would do this, if it’s not YouTube TV Fubo seems logical as the service that has made sports the biggest part of its identity, but it’s also the smallest both in terms of subscribers and resources, it doesn’t have the WarnerMedia networks (though their CEO may have suggested that a deal may be in the works) and like every virtual cable provider that’s not DirecTV, they don’t have the Bally Sports networks (though they do have Marquee Sports in Chicago).
Fox’s Thanksgiving game will set viewership records: Ourand’s logic that a Cowboys Thanksgiving game with a USMNT World Cup game as lead-in should do gerbonkers ratings even by Cowboys Thanksgiving game standards certainly seems sound (though the prospect of the Lions game going up against the soccer game can’t sit well with CBS execs), but Fox might have to lean heavily on FIFA to tweak the schedule or even tilt the scales in the draw to make it happen, and if I have my way I won’t be one of the people watching. (By the way, I’m going to add a prediction of my own: the Cowboys’ opponent will be the Eagles.)
Al Michaels and Drew Brees will call games for Amazon: While I, some of my followers, and perhaps NBC itself would love to have Michaels ride off into the sunset after calling the Super Bowl in his hometown and metaphorically and literally “passing the torch” to Mike Tirico in Beijing, Michaels has gone on record saying he’s not ready to hang it up entirely, and the smart money has been on Michaels and Troy Aikman forming Amazon’s TNF team. As ambivalent as I’ve been about Michaels calling TNF again, I’ve probably liked the idea of Aikman as his partner even less, and certainly Fox has to feel that way about him calling games for someone else each week and continuing to lose him in singleheader weeks. Brees makes more sense in the sense that he’s not regularly calling NFL games at the moment and the weekend schedule he does have calling Notre Dame games is a naturally limited schedule, but it’s still somewhat of a surprise as someone NBC’s clearly grooming as Cris Collinsworth’s successor and would give Amazon’s TNF a distinctly NBC feeling even as they’re insisting on producing all the games themselves. If you asked me to pick a color commentator, Kurt Warner has long been praised as the best NFL color commentator not regularly calling NFL games (though Fox’s Aqib Talib has been earning accolades the past couple seasons), and would be a natural fit especially if Amazon purchases a stake in NFL Network as Ourand suggests.
(Also, Marshawn “I’m just here so I won’t get fined” Lynch as a studio analyst? Really? I suppose if you’re hoping to get the sort of light, shooting-the-breeze, anything-can-happen vibe of Turner’s studio shows it makes a certain kind of sense…)
2022 still will not be the year for VR: Has the hype surrounding VR and the “metaverse” basically gifted Ourand his “I need to make sure at least one of my predictions come true” prediction for the foreseeable future?