What Does the WarnerMedia-Discovery Merger Mean for Sports (At Least Stateside)?

Earlier this month AT&T announced it was ending its involvement in the media business after only three years from the closure of its merger with Time Warner. The assets now known as WarnerMedia would be merged with Discovery to form a new entity with no AT&T ownership and with Discovery head David Zaslav in charge of the merged company, which might sound an awful lot like Discovery buying WarnerMedia (and AT&T would get plenty of compensation in the form of cash and absorption of debt obligations, albeit amounting to pennies on the dollar from the original Time Warner acquisition), except AT&T shareholders would own nearly three-quarters of the new company. WarnerMedia’s diverse portfolio of adult and children’s entertainment networks, plus news networks and sports content, premium cable, and the HBO Max service launched under AT&T, would now be joining forces with Discovery’s documentary, reality, and other nonfiction programming.

A number of analysts in the aftermath suggested this would be a “game changer” for sports with “one more bidder entering the market” for sports rights, with one analyst claiming it would have “profound implications” as the new company could create a “must-have sports streaming service”, but considering that WarnerMedia already had high-profile sports rights and Discovery didn’t have any US sports rights whatsoever, nor does either company have a broadcast network presence, it’s hard to see how the new company is any more of a factor in sports rights negotiations than WarnerMedia already was. To be sure, before this year it had been a long time since Turner had been much of a factor in trying to acquire rights they didn’t already own and that were in any way competitive, the main exception being a run with the UEFA Champions League that only ended up lasting a year and a half and didn’t particularly impress soccer fans.

Then sports media watchers were blindsided when Turner came seemingly out of nowhere to take the half of the NHL package Disney hadn’t locked up, effectively saving the league from having to take significantly less money than they were hoping for after NBC was lukewarm at best to continuing their involvement, Fox set a ceiling on how much they would pay, and CBS wasn’t interested at all. The rights could be said to have fallen into Turner’s lap, but it’s still impressive that Turner was able to pay pretty close to what the NHL was looking for and beat out all other comers (including the possibility that Disney might have simply taken the whole package), and as incredible as it was that ESPN, the outfit more responsible than any other for keeping two Stanley Cup Final games on cable over the past two decades, would be the outfit to finally put every Final game on broadcast, it was even more incredible to find out that the other three Finals over the course of the deal would air entirely on cable, after the great care NBC took in the latter portion of their relationship to ensure NBCSN wouldn’t air a Game 4 where the Cup could be awarded. Zaslav’s comments that he’d been working on the merger for months before word got out (and had been badgering AT&T about a deal pretty much from the instant the Time Warner merger was completed) could serve as fuel for speculation that he was the driving force behind the NHL deal all along, and suggests that if the only impact a WarnerMedia-Discovery merger has on the former company’s sports operation is an infusion of resources (even though the merged company is probably smaller than AT&T as a whole during the WarnerMedia era), that’s still going to be enough to shake up the sports landscape.

But there aren’t a whole lot of high-value rights left. MLS rights, currently shared by ESPN and Fox, expire in 2022, but the value of those rights are a shadow of even the NHL. The NBA is the only one of the traditional four major sports that hasn’t locked up new rights deals in the past few months and Turner will be playing defense there when those rights come up by 2025. The NFL hasn’t settled the future of NFL Sunday Ticket, and SportsBusiness Daily’s John Ourand thinks DiscoverWarnerMedia might become a player there, but it feels like an odd fit without holding any exclusive or linear rights.

With ESPN picking up CBS’ SEC contract, there aren’t any major college conference rights up for renewal before 2024, when the Big Ten and Pac-12’s deals expire, with the Big 12 and Big East following suit the following year; the NCAA’s deal with ESPN for less-prominent sports expires then as well, and those deals could be an opportunity for DiscoverWarnerMedia to deepen their relationship with college sports and the NCAA (whose web site they already run) and avoid simply parachuting in for March Madness. But both ESPN and especially Fox are likely to spend profusely to defend their Big Ten rights, and the Pac-12 right now is in a place where they’re in danger of becoming the clear fifth conference of the Power 5, while the Big 12 has the least valuable demographics of the Power 5 and the Big East has no football and hasn’t moved the needle for FS1 as much as they thought it would. The College Football Playoff, whose current deals run through the 2025 season, is likely to come up at this point as well, but I doubt they have much interest in continuing to be a cable-only enterprise given their popularity and the direction media is headed, and they certainly won’t go with an outfit without any other college football rights (covers ears and sings loudly to drown out people bringing up the BCS on Fox). That’s not even getting into the notion of a large-scale shakeup of college football that might come mid-decade (one that, depending on the players involved, could yet see DiscoverWarnerMedia benefit).

NASCAR comes up for renewal in 2024 as well, but Turner seemed like an odd relic last time they had those rights with a handful of early-summer races, both they and ESPN pretty much didn’t want anything to do with the sport anymore by the time that deal ended, and NASCAR ratings didn’t finish crashing through the floor until a few years into the Fox/NBC era. On the other hand, the shutdown of NBCSN means NBC could be vulnerable to a concerted effort from a determined rival, which, given their portion of the schedule coincides with football season, would mean either Turner or ESPN. Everything else that could move the needle, including the World Cup, SEC, and ACC, are all locked up for the rest of the decade, and anything else that is coming up in that time isn’t likely to move the needle very much.

What Discovery does bring to the table that might make an impact on WarnerMedia’s sports operations is their Eurosport network, and a lot of the excitement surrounding the merger concerns the possibility of blending the Turner networks’ sports rights with Eurosport’s to form an unbeatable sports streaming service. But Eurosport’s slate of rights is singularly unimpressive, at least from an American standpoint, which might be surprising given its prominence; in fact Turner’s rights slate might benefit Eurosport more than the other way around. (Also, the opportunities for synergy are limited given Eurosport broadcasts in each of Europe’s many languages.) What rights Eurosport does have that would be relevant to Americans – the Olympics and PGA Tour – are among the rights already locked up stateside into the next decade (and Turner’s efforts to pick up PGA Tour rights were simply embarrassing, talking about converting one of their networks into a duplicate of what NBC already had), and everything else is a hodgepodge of rights.

It has plenty of soccer, but not much of it applies throughout its territory (in fact very little applies outside Scandinavia and Romania) and what does apply tends to be decidedly lower-tier; they technically have domestic rights to the German Bundesliga (extending to much of Central and Eastern Europe) but resold those rights (as well as those in Austria and Switzerland) to DAZN (which led to DAZN launching German linear channels only reluctantly and while griping about how they shouldn’t be necessary, once again overlooking the true value of linear television). Both outlets would likely be interested in acquiring Premier League rights for as many territories as possible, but that seems to be NBC’s top priority now that Sky Sports, the outlet arguably responsible for the Premier League’s very existence, is a corporate sibling. Eurosport also has rights to the three Grand Tours of bicycle racing, and the Tour de France might be up for the taking with NBCSN shutting down, but it’s not like being on TNT or TBS is actually any different than being on USA.

What stands out to me, looking at Eurosport’s slate of rights from the perspective of the Turner networks, is tennis. Eurosport has pan-European rights to the French and US Opens (excluding rights to the US Open in the UK and Ireland, where Amazon holds rights), to the Australian Open in the vast majority if not all of Europe, and Wimbledon in a majority of countries they serve. They also hold rights to the ATP Tour in France, Russia, Scandinavia, Romania, and Hungary, and the WTA Tour in Denmark and Russia. In the United States, rights to most events outside the Grand Slams are held exclusively by Tennis Channel, which just locked up a deal to become the exclusive home of ATP Tour events, including the most prominent events in North America, for an indeterminate amount of time, though the similar deal with the WTA expires after 2023. Tennis Channel is also the main rightsholder at the French Open, with ESPN holding rights to the other three Grand Slams, though I haven’t seen anything indicating that they’ve reached an agreement with the Australian Open extending past 2021. Their deal with Wimbledon runs through 2023, while the US Open deal runs through 2025; Tennis Channel’s deal with the French Open runs through 2023, with NBC’s deal ending the following year. DiscoverWarnerMedia could be a surprisingly motivated bidder for rights to each of the four Grand Slams, at minimum, over the next four years. Anything else would likely require a relationship with Tennis Channel, and Sinclair Broadcast Group likely doesn’t see a reason to part with it (and certainly not to have the whole company being acquired if it means they don’t get to spread conservative propaganda on their broadcast stations anymore, and DiscoverWarnerMedia likely doesn’t have much stomach for running broadcast stations anyway). Still, this might be the biggest immediate impact of the merger.

There’s one more wrinkle to consider here, albeit one that’s only incidentally related to the merger itself. Though AT&T’s regional sports networks were acquired through the purchase of DirecTV, after the Time Warner merger they were placed in the same part of WarnerMedia as Turner Sports in the News and Sports division under Jeff Zucker, actually separate from the rest of the TBS and TNT networks in the Studios and Networks division. I haven’t seen any mention of the RSNs in any discussions of the deal, and there were rumors for a while that not all of the WB Games division would make the transition to the new company so it’s not a sure thing the RSNs will, but I would normally assume the RSNs will in fact make the transition. Certainly the RSNs were long subject to rumors that AT&T was hoping to unload them in some way, arguably predating the AT&T-DirecTV merger but shifting into overdrive as the RSN market seemingly collapsed, with the prospect of a reunion with their former Fox Sports Net bretheren at Sinclair being particularly floated. With the NHL deal, though, WarnerMedia now has national rights to each of the three sports that make up the backbone of most RSNs, and while ideally you’d want a larger group than just four RSNs (not counting the separate feeds for Utah and Nevada) for this, there’s an opportunity to create some form of synergy between the RSNs and the national outlets, if Zaslav wants it. At the very least, if the RSNs aren’t part of AT&T anymore they’ll probably need a change of name.

In short, there are a lot of obstacles to a combined Discovery-WarnerMedia being a bigger player in sports rights than either company alone, not the least of them being that there isn’t a single package of rights held by both Turner and Eurosport as it stands, other than Russia-specific rights to the NHL, which means there’s not a lot it can do at the moment to create a streaming service that would be fundamentally the same on both sides of the Atlantic. The ability to offer international rights in Europe would certainly help in WarnerMedia’s negotiations with sports leagues, but the entities that would be most interested in that are either locked up for the next decade, already with Turner, or have limited appeal, and Eurosport has shown little interest in the European leagues and competitions that would be interested in a stateside presence, so it seems doubtful the American sports consumer would notice much of a difference. Tennis is probably the only sport where joining forces with Eurosport would pay dividends for the Turner networks in the short term, but even there the impact is likely to be limited. So while this merger is likely to have a significant impact on rights to American sports leagues in Europe, could impact stateside rights to tennis and cycling, and gives both entities an infusion of cash and the ability to bid for trans-Atlantic rights to fuel the pursuit of more sports rights, hyperbolic claims about its impact on the sports landscape are probably unwarranted in the short term; if anything, a good chunk of the impact may have already happened. Still, it’ll be worth keeping a close eye on NBA rights negotiations in the next few years if the deal gets approved; to the extent DiscoverWarnerMedia can launch a trans-Atlantic streaming service, NBA rights will probably have to be the linchpin for it.

A Blast from the Past that will Shape the Future: What Does the NHL’s Return to ESPN Mean for the Future of Live Sports Video?

In 2007, after ESPN had screwed over Fox (who had reportedly been thinking of putting the entire Stanley Cup Final on broadcast television) in taking control of the entire NHL broadcast contract and proceeded to barely promote it at all (especially after taking over the NBA contract a few years later) and bump it to ESPN2 if just about anything and everything could be put on ESPN ahead of it, most infamously poker, then turned down a $60 million option to extend the contract in the wake of the lockout leaving the league to turn with their tail between their legs to the outfit then known as the Outdoor Life Network, then made NHL highlights virtually persona non grata on SportsCenter to the consternation of hockey fans who felt ESPN, then at the seeming height of their monopolistic power, was sticking it to any league or entity that didn’t bother to sign a contract with them… if you told hockey fans that ESPN would end up being the entity responsible for putting every game of the Stanley Cup Final on American broadcast television, would they have believed you in a million years?

But indeed, that’s what will happen in four out of the seven years, including (presumably) next year, of ESPN’s new agreement with the NHL announced Wednesday, a deal that will reportedly pay the NHL $400 million a year, close to twice what NBC was paying for only half the national television contract. Perhaps no other recent sports rights deal better captures the shifts in the video (it seems gauche to call it “TV”) business in recent years, and it’s hard to think of one that will have more of an impact (the reported move of Thursday Night Football to largely being exclusive to Amazon feels like more of a paradigm shift but hasn’t been announced yet and may have less relevance to defining the role of linear television going forward). In something that would have been unthinkable, certainly for ESPN, maybe five years ago, this appears to be a deal largely about ABC and ESPN+, with linear ESPN largely an afterthought. 

Read moreA Blast from the Past that will Shape the Future: What Does the NHL’s Return to ESPN Mean for the Future of Live Sports Video?

Thoughts on @Ourand_SBJ’s Predictions for Sports Media in 2021

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. I’ve dedicated entire tweet threads to his column in the past, but I haven’t entirely abandoned the notion raised way back when I started my Tweeter that anything that took up multiple tweets would go in a blog post instead, so here’s my take on Ourand’s predictions for 2021:

Read moreThoughts on @Ourand_SBJ’s Predictions for Sports Media in 2021

Handicapping the Thursday Night Football race (again)

Last week, John Ourand reported in SportsBusiness Journal about the state of the NFL’s ongoing contract renegotiations with networks. The league had hoped to have new deals in place before the start of the upcoming season, but the coronavirus pandemic has placed that on hold; however, things seem to be shaping up to mostly continue the status quo. CBS wants to keep its Sunday afternoon package, NBC wants to keep Sunday Night Football, Fox wants to keep its own package and specifically stating it wants to “keep an NFC-focused package”, presumably in contrast to the idea the league has floated in the past of decoupling the Sunday afternoon packages from the conferences. Ourand described ESPN as the wild card, as they have long groused about paying nearly twice as much as the broadcast networks for games but getting a weak package; ESPN argues that retransmission consent has leveled the playing field between broadcast and cable, and if they’re going to spend so much money they should be getting better games, though in contrast to what was reported in 2017, ESPN seems to be focusing more on upgrading its current package than dropping out or even reducing the amount it pays relative to the other networks. As has been previously reported, ESPN also wants to return the NFL to ABC and rejoin the Super Bowl rotation.

However, Ourand also noted that Fox said little about Thursday Night Football and characterized that as the likeliest package to change hands, and that became the biggest headline in other places‘ reporting on Ourand’s article.

Read moreHandicapping the Thursday Night Football race (again)

What Would a Conference-Free NFL Playoff Television Schedule Look Like?

As the NFL playoffs continue this weekend, the league hopes to complete a new CBA and new television contracts by the end of the year, and there could be big changes on the horizon. As part of the CBA, the league wants to introduce a 17th game to the schedule, potentially accompanied by a second bye week, in hopes of carving out an additional package to sell to media or streaming companies. As it is there should be plenty of interest in the existing packages, with Disney hoping to get ABC back into the Super Bowl rotation, as well as the prospect of ending the conference-specific tie-ins of the Sunday afternoon packages.

In my view, the former is more likely than the latter. I’m not sure I’ve seen any actually solid reporting that the conference tie-ins would completely end, and even if they did it would depend on Fox’s willingness to give CBS (or whoever wins the other Sunday afternoon package) equal rights to the top Sunday afternoon games in exchange for a lower rights fee. If Fox isn’t up for that, CBS isn’t going to accept taking the dregs of the schedule left over after the other networks take their picks, as I said before the season when I looked at what a fully unconferenced schedule might look like, and would rather simply keep its AFC tie-in that ensures fans of teams in markets like Boston, Houston, and New York are tuning in to CBS in a majority of weeks, with expanded crossflexing allowing them to air more NFC games, perhaps with more flexibility in the balance of crossflexes. (The Titans may have benefitted from the Chiefs winning in the early slot Week 17 giving the Texans nothing to play for, a set of games that may have been scheduled the way they were in part because the NFL owed Fox a crossflexed CBS game and so didn’t want to overcomplicate things by giving CBS another Fox game to anchor their early slot, even if the Patriots could still have played early, or punish both networks by giving Fox an actually meaningful AFC game that would have diluted the audience for the NFC East race Fox wanted to focus on. While many of my commenters, which I even agree with, would solve this problem by playing all games in each conference at the same time Week 17 with each broadcast network getting two games from each, there’s no evidence that’s actually under consideration.)

If the league does dissolve the conference tie-ins on the Sunday afternoon packages, it will need to reinvent its playoff schedule – and this is an area where ABC entering the Super Bowl rotation in addition to the existing partners, as opposed to replacing one of them, could help the league (or hinder it, depending on your point of view), and something I suspect the league’s move this year to put the Sunday divisional games at the same start times as the conference championship games may be in preparation for. The NFL playoff schedule has historically been highly tied to the networks’ conference tie-ins, and while having NBC trade in the weakest wild-card game for a divisional-round game in the last contract has gone some distance to allow the league some flexibility in scheduling playoff games, nonetheless the need for CBS to air only AFC games and Fox only NFC games is an overriding consideration on the playoff schedule. NBC and ABC effectively need to air wild-card games in opposite conferences, and the conference NBC’s divisional game comes from is set before the season, alternating between the two conferences so CBS and Fox know whether they’re airing one or two divisional games. Finally, the conference championships – annually the most-watched programming of the year outside the Super Bowl – always air on the networks of each conference’s respective Sunday afternoon package, alternating between the 3 PM ET and 6:30 PM ET timeslots. Dissolving the conference tie-ins means eliminating the underlying reason for this structure, and NBC and ABC would love to get conference championship games in years they don’t have the Super Bowl.

What structure might replace it? Here’s how I, at least, would structure things to keep all of the league’s partners happy:

  • The conference championship games go to two networks that are not airing the Super Bowl. The network airing neither a conference championship nor the Super Bowl gets two divisional-round games, one from each conference, to compensate, including the late Sunday divisional game with first pick of the available games, with the conference championship networks getting the other two. Among other things, this allows a network to know that they will have the late Sunday divisional game ahead of time and schedule lead-out programming accordingly (something Fox wasn’t able to do this year). (If the Super Bowl rotation remains at three networks, the Super Bowl network gets two divisional games but the network airing the early conference championship game gets the late Sunday spot and first pick of available games.)
  • The network airing the early conference championship game gets the Sunday 4:30 ET wild-card game and first pick of games on the weekend. Thus, all four networks get an NFL playoff game as a lead-in to primetime programming. To compensate the early conference championship network for not actually having their Sunday late game in primetime, that network also gets second choice of divisional games and timeslots; if the top two picks go to the same conference, the two-divisionals network gets the worse of the two games from the remaining conference. (This does not apply if the Super Bowl rotation remains at three networks; in that case NBC may keep the Sunday late wild-card game on lockdown as a lead-in to the Golden Globes, unless they end up shut out. I don’t know how the league would handle it if one network gets completely shut out of the NFL.)
  • To compensate the Super Bowl network for only airing one playoff game before the Super Bowl, that network gets second choice of games and time slots on Wild Card weekend with the opportunity to leapfrog the early conference championship network for the best game (but only on Saturday night), depending on stadium availability and time zones, as well as the league’s preference that each conference get a game wrapping up at least one round of the playoffs each year, and that each non-Super Bowl network air at least one game from each conference. In both cases I would expect the second-choice time slot to be on Saturday nights (except, potentially, for NBC, to avoid pissing off Lorne Michaels) once out-of-home data is fully baked into Nielsen numbers, but for divisional weekend especially the Sunday early slot may remain strong.
  • If there is no clear distinction between the two remaining networks based on the above criteria (or maintaining a balance of games from each conference for the late conference championship network), the two-divisionals network gets the remaining choice of wild-card games, as they would likely still be doing worse in gross playoff ratings points compared to the conference championship networks. On the other hand, the late conference championship network hasn’t really gotten to “choose” anything, so they may get to pick ahead of the two-divisionals network under certain circumstances, especially if they’re stuck with the AFC championship game.
  • In the event the league expands the playoffs to 14 teams, the additional wild-card games go to ESPN and whoever picks up the remaining, “new” package. If the league wishes to stick entirely to broadcast television, one game goes to ABC (assuming ABC and ESPN pick up separate regular-season packages) with the other going to the Super Bowl network except in years that’s ABC. In those cases, over the course of an eight-year contract the extra game would go to CBS one year and Fox the other, in recognition of their having to produce many more games in the regular season and having more ability to bring in a second broadcast team seamlessly.
  • Over the course of an eight-year contract, each network gets each conference championship game in each timeslot once. As a result, the conference championships mostly stick with their current pattern of alteration, but “skip” a year at one point so that each network gets a conference championship in the same timeslot they did four years ago, but from the opposite conference. Alternately, each network’s timeslot varies from the first rotation to the second, though my inclination is that timeslot is more important. In total, the league will try to give each network ten playoff games from each conference over the life of the contract, though some imbalances may be inevitable.
  • Optional: Exclusive rights to the NFL Draft go to the network furthest from the Super Bowl, so the network that just completed their second season without it.

Here’s one idea for how the rotation might look. I’m assuming once the Super Bowl rotation goes to four networks NBC would want all their Super Bowl years to fall in Winter Olympic years, as in 2018 and 2022 (if the changes to the schedule result in the Super Bowl overlapping with the Winter Olympics on a regular basis, at least NBC is stopping any other network from stealing their Olympic thunder). With Fox reportedly selling national Super Bowl ad space to Donald Trump and Michael Bloomberg the day before the Iowa caucuses, I suspect the league would be accused of trying to tip the political scales if they gave Fox the Super Bowl in presidential election years on a regular basis, so I gave Fox the Super Bowl in the year after NBC, followed by CBS and finally ABC. For this first rotation, each network gets conference championship games in alternating years. “2D” refers to the two-divisional network, “SB” to the Super Bowl network, and the conference championship networks are referred to with the conference each network is slated to air followed by an “early” or “late” designation.

  • 2023: 2D ABC, AFC early CBS, NFC late NBC, SB Fox
  • 2024: 2D NBC, NFC early Fox, AFC late ABC, SB CBS
  • 2025: 2D Fox, AFC early NBC, NFC late CBS, SB ABC
  • 2026: 2D CBS, NFC early ABC, AFC late Fox, SB NBC
  • 2027: 2D ABC, NFC early CBS, AFC late NBC, SB Fox
  • 2028: 2D NBC, AFC early Fox, NFC late ABC, SB CBS
  • 2029: 2D Fox, NFC early NBC, AFC late CBS, SB ABC
  • 2030: 2D CBS, AFC early ABC, NFC late Fox, SB NBC

To help you understand how this works, here’s what the 2023 playoff schedule might look like under this system:

  • Wild card: Saturday 4:30 PM ET NBC (or ABC), Saturday 8 PM ET Fox or ABC, Sunday 1 PM ET ABC or Fox (or NBC), Sunday 4:30 PM ET CBS
  • Divisional: Saturday 4:30 PM ET ABC, Saturday 8 PM ET CBS or NBC, Sunday 3 PM ET NBC or CBS, Sunday 6:30 PM ET ABC
  • Conference championships: AFC 3 PM ET CBS, NFC 6:30 PM ET NBC
  • Super Bowl: 6:30 PM ET, Fox
  • Optional: 2023 Draft on ABC and/or ESPN

Here’s an alternative where each network’s two-divisional year comes the year after the Super Bowl and “works their way up” to the Super Bowl the next time, with CBS and ABC switched.

  • 2023: 2D NBC, AFC early CBS, NFC late ABC, SB Fox
  • 2024: 2D Fox, NFC early NBC, AFC late CBS, SB ABC
  • 2025: 2D ABC, AFC early Fox, NFC late NBC, SB CBS
  • 2026: 2D CBS, NFC early ABC, AFC late Fox, SB NBC
  • 2027: 2D NBC, NFC early CBS, AFC late ABC, SB Fox
  • 2028: 2D Fox, AFC early NBC, NFC late CBS, SB ABC
  • 2029: 2D ABC, NFC early Fox, AFC late NBC, SB CBS
  • 2030: 2D CBS, AFC early ABC, NFC late Fox, SB NBC

One caveat: when it was first reported that NBC would give up a wild-card game for a divisional game in the current contract, it wasn’t entirely clear what would happen to the other three divisional games, and I kind of expected NBC to take two divisional games as a way of approaching as close to parity with CBS and Fox as possible without having a conference championship. Not only did that not happen, NBC doesn’t seem to have consistently if at all picked divisional games ahead of CBS or Fox, and the somewhat random timeslots and fixed conference alignments of NBC’s divisional games have made them seem something of an afterthought. So there’s no guarantee that the league is thinking in any way close to what I lay out here, and at the very least NBC may end up never getting multiple games in any round given how few games they produce and how relatively difficult it would be for them to bring in a second commentary and production team. Still, this seems to me to be the most logical course for the league to take if it takes away the underlying justification for the conference championships to be fixed to CBS and Fox as they currently are.

One last note with implications for all of this: although Disney is reportedly targeting a piece of one of the existing Sunday packages for ABC, my prediction for what happens in the new contract is that Monday Night Football returns to ABC, while ESPN picks up a (relative to the expanded schedule, at least) pared-back Thursday night schedule with exclusively teams coming off a bye and the late Thanksgiving game on ABC. Whatever new contract the league carves out with London/Saturday/special-occasion games goes to NFL Network in the short term while being earmarked for sale to a streaming outlet in the long term (I think the creation of an extra package is more about divorcing Thursday Night Football from NFL Network than actually selling such a scattershot package to one of the other networks). Relevant to the above discussion, I also think the return of MNF to broadcast could be bad news for NBC. Before the move to ESPN and Sundays becoming the league’s main primetime night, MNF routinely beat the Sunday afternoon packages, which have turned the tables and routinely beat SNF since then; shortly after ESPN took over Mondays, they started routinely threatening and beating the all-time cable audience records until the BCS/College Football Playoff moved to cable, something that never happened on Sundays.

I could see the league giving ABC more marquee games in the early part of the season than NBC, while late in the season, giving ABC limited flexible scheduling modeled off of what the league has done on Saturday of Week 16 the past two years while also giving ABC tentative games whose ratings performance depend on player healthiness and overall team performance as little as possible (i.e., Cowboys games). NBC would want the best game of the week at least a quarter of the time, as well as at least some early-season weeks where they have a better game than ABC (including at least some Cowboys games), but the worst-case scenario could result in flexible scheduling being NBC’s only advantage over ABC, in which case NBC could push for severely weakening the protection system, potentially with no protections at all for networks in singleheader weeks. If Sunday nights are weakened enough by a resurgent Monday night, that could provide all the more reason for NBC to pick up two divisional or wild-card games in certain years, just so NBC isn’t that much more obviously the “fourth network” where the league is concerned. As it is Disney picking up two packages and decoupling Sunday afternoon packages from conferences is likely to result in NBC paying less than any of the other networks outside of whatever extra package the league creates.

What to Make of the NFL’s Experiment with Putting the Draft on Broadcast, Part 2

Last year, after the NFL Draft aired on broadcast for the first time ever, I wrote a blog post looking at the resulting ratings and what it meant for the NFL’s desire for “presidential election”-style coverage of the draft on every major network. This year, ESPN agreed to air all three days of the draft on ABC, with the first two days being college-focused coverage from College GameDay that aired on ESPN2 last year. This was somewhat surprising to me, because last year Grey’s Anatomy significantly outpaced Fox’s coverage in the 8 PM ET hour, and ABC was hosting what amounted to side coverage alongside the existing coverage on ESPN and NFL Network. I figured the league would want to repeat last year’s experiment another year, and if ESPN did decide to put the draft on ABC they would put it on only ABC, making pre-empting Grey’s more palatable and allowing both ESPN and ESPN2 to air NBA playoff games on Friday if needed. Still, it is understandable; ESPN is desperate to maintain their relationship with the league entering contract renegotiations, including pumping up ABC as a broadcast outlet for the league, while still preserving whatever impact the draft still has on their carriage fees.

Did we learn anything more about the future of the draft on broadcast? Let’s find out. This is going to be significantly shorter than last year’s analysis, and I’m going to assume, for the most part, you already read last year’s post for context.

Read moreWhat to Make of the NFL’s Experiment with Putting the Draft on Broadcast, Part 2

What to Make of the NFL’s Experiment with Putting the Draft on Broadcast

The NFL Draft this past weekend aired on broadcast television for the first time ever. The first two nights of the draft saw NFL Network’s coverage simulcast on Fox, which will be NFLN’s Thursday Night Football partner next season. ESPN, which had long resisted the league’s calls to put its draft coverage on ABC, acquiesced to simulcasting its coverage of the third day on ABC.

For the league, the hope was that this would just be the beginning. The league made noise about the draft potentially being treated as an event on par with the presidential election, with coverage on every network, earning widespread mockery and being held up as more evidence of the league’s hubris. Even at its most popular, the draft has but a fraction of the popularity of election coverage, or even of most regular season games. Simulcasting the Super Bowl across several networks might theoretically make sense, though that would potentially cause it to lose its status as the premier advertising showcase if several different networks were running their own ads, as well as diluting its status as the biggest lead-in of the season. But most networks bail out of putting on anything people might actually want to watch against the Super Bowl; no one ran scared from the NFL Draft, except possibly Fox itself. Besides, splitting the draft across every network is a terrible idea in its own right. The league is highly concerned about tipping picks and pressures reporters not to do so on social media, but the best way to minimize the impact of tipping picks is minimizing the time between when the pick comes in and when it’s announced. That’s already a challenge with two draft productions that need to synchronize their ad breaks and need to have each of their reporters interview draft picks after they come out of the green room. Can you imagine how bad it could be with four or five?

The result of this year’s experiment might give the league pause about its “presidential election” ambitions. The league boasted the most-watched draft ever, but that was mostly attributable to the move to broadcast, and given that the boost in ratings was fairly modest (especially given how top-heavy the first round was with quarterbacks from name schools and the presence of both New York teams picking in the top three). Fox failed to win the night either on Thursday or Friday, which makes any “presidential election” talk seem downright ludicrous, at least for now. Given that, what’s the best path for how the league should handle the draft going forward? The way I see it, there are three broad options, which can be arranged on a scale:

  • The “presidential election” approach with every network broadcasting the draft.
  • Something like the status quo, with ESPN, NFLN, and a broadcast network showing the draft, with the latter either simulcasting an existing feed or providing its own production.
  • Giving the draft exclusively to a single network, like how ESPN handled the draft on its own before NFLN started muscling in.

Let’s look at the ratings for each day of the draft and see what it tells us about what the best approach is for the league going forward.

Day 1: For the night, Fox’s coverage of the NFL Draft drew a 1.1 rating in the lucrative adults 18-49 demo, good for second place for the night behind CBS and barely edging out ABC. If you’re Fox and the league, you point to the fact that, despite one’s expectation that numbers would erode as the night wore on and you got away from the early, star picks, numbers not only remained mostly steady throughout the night but actually rose as the night went on, from a 1.1 at 8 PM to a 1.3 at 10 PM before crashing back down to a 1.0 at 10:30, suggesting more people discovered the draft was on broadcast at all as the night wore on and the numbers earlier on would be higher in future years. Certainly that’s what you say if you want to convince ABC to give up its Thursday night for the draft, including Grey’s Anatomy, which earned a 1.5 in the demo at 8 PM. But it’s hard to imagine CBS giving up its Thursday night, including the wildly popular Big Bang Theory (2.0 in the demo), for the draft without exclusivity. CBS was willing to move BBT to Mondays during Thursday Night Football season, but that was an actual game taking up multiple weeks; pre-empting BBT a single week for something drawing noticeably lower ratings is a nonstarter. If you gave CBS a captive audience for the draft, and the entire 4.04 demo rating the draft drew on all three networks (and possibly also the .04 ESPN2’s college-centric coverage drew), it might be a different story.

The previous week, Fox’s lineup of Gotham and Showtime at the Apollo drew .6 demo ratings, last place among the Big Four, so Fox would seem to be on board with doing it again next year under the status quo.

Day 2: Fridays typically draw a smaller audience than Thursdays, so the inevitable decline in ratings for the second night of the draft wouldn’t necessarily kick it off a broadcast network. Unfortunately, Fox’s .6 demo rating tied it with NBC for second behind CBS, and NBC was propelled by Dateline‘s .7 from 9 to 11 more than Blindspot‘s .5 at 8. NBC would be crazy to air the third round of the draft instead of that, at least not without exclusivity. All three of CBS’ shows outpaced the draft at the same time – MacGyver at 8 only drew a .7, but Fox drew consistent .6’s all night until 10:30 when it slipped to a .5. Even Fox itself might not be happy with these numbers; the previous week, MasterChef Junior actually won the night with a .8. It might make sense for Fox’s proposed refocusing of its network towards sports and news programming once its deal with Disney to sell its studio goes through, but who knows if that would actually herald the departure of a reality show like MasterChef. (It’s worth noting that the numbers are more forgiving in 18-34, where a .4 rating tied for the highest-rated show of the night.)

ABC would seem to be the only network willing to give up its Friday primetime for coverage of the second night of the draft, which raises an interesting prospect. Suppose ESPN tells the NFL it’s willing to put its entire draft coverage on ABC if the league doesn’t simulcast NFLN’s coverage on another network again, or in general gives another broadcast network an in. That could mean putting ESPN’s coverage of the second night of the draft on ABC… and only ABC, leaving ESPN to cover the NBA Playoffs and allowing a third or fourth playoff game that night to air on ESPN2 without getting bumped to ESPNEWS. Of course that’s likely to give ABC marks significantly higher than .6, and the temptation on ABC’s side would be to do the same thing with the first night and make it easier to swallow pre-empting Grey’s Anatomy. By my reckoning, coverage of the second night on ESPN and ESPN2 averaged a .59 for the night, though it’s doubtful all of that would devolve to ABC if NFL Network still had its own coverage, especially with an NBA Playoff game on ESPN2 drawing higher numbers than on ESPNEWS. It does show that giving exclusivity would again be enough to convince any network to show the second night; a 1.2 would be the highest-rated show of the night by a significant margin even before adding NFLN’s .39.

Day 3: The third day of the draft appeals mostly to hardcore NFL nerds who are actually willing to do a deep dive into the remaining players and who’s likely to actually make an impact in the league. It doesn’t have the sort of broad popularity the earlier days do; while ESPN and NFL Network have gotten better at treating the fourth round close to on par with the third, NFLN especially tends to devolve into regurgitating the earlier rounds, presenting offbeat and human-interest stories, engaging in frivolous games with the personalities on set, and generally just killing time until Mr. Irrelevant. ESPN is better, but honestly the best coverage of the third day for those who actually care about who’s still getting drafted might be the live stream NFL Now does on NFL.com; it covers the later rounds almost to a fault, delaying and re-airing the pick announcements if they come during a break rather than simply getting caught up like ESPN would.

There’s a case to be made for airing the first three hours on a broadcast network to take care of the fourth round, but while ABC didn’t have anything else to do the rest of the day and could show the entire final day, CBS or NBC would need to air golf coverage starting at 3 PM ET, and Fox might want to show NASCAR racing as they did this weekend. On this occasion there were actually conflicts earlier, as NBC was showing a Premier League game and Fox was showing Monster Energy NASCAR Cup Series qualifying from Talladega.

On this front the verdicts are not good. For the entire day, ABC drew 1.008 million total viewers and just 314,000 demo viewers, less than what ESPN drew for its half of the simulcast. The good news is those numbers are still better across the board than the early competition, except total viewers for the NASCAR qualifying. It’s not as friendly to the later competition, where it lost in both measures to the Xfinity Series race on Fox and the Stanley Cup Playoffs on NBC, and in total viewers to golf on CBS.

Combined, coverage of the third day on all three networks drew 2.914 million total viewers and 1.197 million demo viewers. That would make it the second-most-watched non-NBA sports-related event of the weekend behind the actual NASCAR race on Sunday, and only the NBA would top it in the demo. That doesn’t necessarily mean the other networks would fall over themselves to air the whole day with exclusivity, but it might if the networks could get around existing contractual commitments. Of the late afternoon sporting events, the NHL game did best in the demo with 644,000 viewers, just over half of the draft’s audience, while the Xfinity Series race did best in total viewers with 1.899 million. That suggests the decline as the third day wears on would have to be pretty precipitous for bailing out of exclusive coverage to be the best approach from a pure ratings standpoint, at least in the demo. But it’s hard to see the other networks taking that bargain without using it as a lead-in for an actual sporting event.

Where does the NFL go from here? The notion of treating the draft like the presidential election is probably dead for the foreseeable future, with CBS in particular laughing the prospect out of the room. If the draft ever does become popular enough for all four networks to drop out of their Thursday primetime lineups to simulcast just the first day, it’ll probably be more because of the decline of scripted programming on broadcast than the increased popularity of the draft itself.

The NFL and Fox would probably want to perform the same experiment again next year to establish how popular the draft could be on broadcast if more people are used to it, but depending on where Fox is a year or two from now, they would probably be fine if ESPN and ABC decided to go ahead and put their entire draft broadcast on their broadcast network, with the league preferring the simplicity of not switching networks mid-draft and Fox preferring higher-rated programming on Friday nights. ESPN would lose most if not all of the benefit the draft would provide to its subscriber fees, but those benefits have been neutered anyway with NFLN carrying the draft and now showing it on broadcast without them. But given how much this draft had going for it from a ratings standpoint, I could see them wanting to see at least another year’s worth of numbers before deciding to pre-empt Grey’s for the draft.

The real question comes when the current rights agreements come up for renewal in a few years, when the league will have to consider how best to maximize the popularity of the draft. Ideally, that would involve simulcasting it on as many networks as possible, which would mean maintaining some variant of the status quo. But the days when the league could give the draft to an upstart cable outlet that doesn’t air games because they don’t see how it would make good television are over, so if ESPN decides not to re-up for Monday Night Football, I could see the league taking away the ESPN and NFLN broadcasts of the draft and offering to rotate exclusive draft rights between the three remaining broadcast partners, perhaps going to the network that’s between Super Bowls, so this past draft would still go to Fox since the last Super Bowl was on NBC and the next one will be on CBS, but then next year’s draft would be on NBC, and the one after that would go to CBS. At minimum, the network that gets the draft would have to air the first two nights, but the league could be open to at least allowing the network to show only the first three hours of the third day, with the rest airing on NFL Network (as long as all three networks do the same thing). CBS would take the most convincing to dump BBT (if it’s still on) for its own production, trotting out Jim Nantz, James Brown, Tony Romo, Bill Cowher, Gary Danielson, Tracy Wolfson, and whoever they got to be their equivalent of Mel Kiper Jr., all for something that would get barely double the demo ratings, and the league could just end up handing every draft to Fox or NBC, but given where the state of television is likely to be in a few years it still shouldn’t take much. If the league is honest with itself, that’s a far more honest assessment of the future of the NFL Draft than its ludicrous “presidential election” dreams.

Could ESPN Kill Thursday Night Football?

In 1987, ESPN achieved something of a holy grail for the cable industry, picking up a half-season package of Sunday night NFL games, paid for with the imposition of a surcharge on the fees cable operators paid them. In 1998, ESPN picked up the full season of Sunday night games, paid for by the negotiation of clauses with distributors ramping up the fees paid to ESPN every year. This was the start of the process that resulted in ESPN charging every cable subscriber over $7 a month, far more than any other national cable network, and a key component in ESPN’s ability to acquire top-of-the-line sports rights such as the biggest college football bowl games.

In 2005, Disney was outmaneuvered in its efforts to renew both ESPN’s Sunday night package and ABC’s Monday night package, as the NFL struck a deal with NBC to move the league’s marquee primetime package to Sunday night in order to institute flexible scheduling that would ensure good, competitive games late into the season. Disney was left paying as much as it had for both of its previous packages for a single package for airing on ESPN. Ever since, ESPN has paid nearly twice as much as the broadcast networks for a package not much better, if at all, than the marginally-attractive matchups it had been getting on Sunday night. ESPN executives have chafed at this, claiming that for the amount it pays it should be getting matchups at least on par with the broadcast networks; to be sure, part of the fee pays for ESPN’s ability to use highlights across its myriad of programs, but that’s only a fraction of it, maybe no more than a fifth. But when the time came to renew the deal, after nearly a decade of knowing what Monday Night Football had become with the move to cable, ESPN ponied up nearly two billion dollars a year, once again close to double what each of the broadcast networks were paying. ESPN’s package of NFL games may be weak, but they’re a big part of what makes ESPN so valuable to cable operators, what makes it such a must-have for sports fans, and without it ESPN not only becomes a lot less valuable, but that same package of games becomes a tool an FS1 or NBCSN can use to instantly establish near-parity with ESPN.

At the same time it was shaking up its existing primetime packages in 2005, the NFL carved out a package of late-season Thursday night games to air on its own network, hoping to turn NFL Network into a cash cow that could collect hefty subscriber fees directly for the league. The package grew until it eventually took up the whole season, both to coerce holdouts to carry NFL Network and to establish the worth of a package to sell to other parties. Initially, the league was thought to be selling part of the Thursday night package to another cable outlet like FS1, NBCSN, or TNT, any of which would be salivating over the prospect of using NFL games to increase their own worth to cable operators, but instead it ultimately sold the right to simulcast and produce half a season of games to broadcast networks while also selling the right to stream games to Twitter and later Amazon. Sure, Thursday night games meant teams would be playing on a short week, increasing the risk of injury and potentially resulting in sloppy games, and the league’s policy of making each team play on a short week exactly once during the season limited the package’s ability to show marquee matchups. But Thursday night was a place to collect another pound of flesh from TV partners and air the games that made NFL Network worth paying for for cable operators, as well as a place to experiment with new formats and partners. It wasn’t like there were any other places for them to do this. Sundays and Mondays were taken.

Things have changed quite rapidly over the past few years. Cord-cutting has taken off like a rocket as people increasingly turn to on-demand streaming services for their entertainment, undercutting the primacy of linear television. In the short term, this only increases the value of live sports as one of the few types of programming people will willingly watch live, without skipping commercials, and are willing to pay for cable packages to watch, but it also changes the very nature of linear television, as it’s becoming increasingly apparent that anything your network airs that isn’t live events is just filler between live events (as much as ESPN and Fox sometimes don’t seem to recognize this). In that context, highlight rights are considerably less valuable than they used to be.

ESPN and the NFL are also looking at a future where the cable bundle collapses and the NFL can’t simply sell whatever it offers for a billion dollars to whatever cable network pays for it, which is no doubt part of the reason why it sold TNF to broadcast networks and streaming services rather than cable networks. In this context, ESPN’s future is no longer in collecting as much money as it can off the back of every cable subscriber, but in converting itself into a service offering its wares direct to the consumer, and it has less to worry about from FS1 and NBCSN – who have benefitted ESPN more by keeping the cable bundle propped up than hurt it in any way, and which now become more untenable propositions both in general and for the league specifically – than it does from Amazon and its ability to synergize sports rights with its Prime service. A package of mediocre NFL games may be valuable to cable operators that can pass on the cost to all their subscribers and that NFL fans can watch at anytime after paying for the entire cable bundle, but a subscription service offered directly to consumers can best attract subscribers by covering certain sports comprehensively, or else a broad array of important sports events that can combine to make it a must-have service for sports fans, and that single mediocre NFL game each week isn’t going to fit the bill and certainly isn’t going to be worth two billion dollars.

In that context, it’s easy to see why, as James Andrew Miller, the man who literally wrote the book on ESPN, suggested in a guest column for the Hollywood Reporter, ESPN might be thinking about going without NFL rights when they next come up for renewal, for the first time since 1987. ESPN has been removing clauses conditioning its high subscription fees on its continued carriage of NFL games from its contracts with cable operators, which makes sense when you consider the gap in fees between ESPN and NFL Network (and the fact that TNT charges more than NFLN without football or really much of anything other than NBA basketball and select NCAA Tournament games), and freeing up two billion dollars a year of spending money allows them to pay for events that offer a larger tonnage of content and may be more likely to entice more people to sign up for an ESPN subscription service.

Meanwhile, faced with a second year of headlines of declining NFL ratings, networks have begun complaining to the NFL about oversaturation of games and games being taken out of the Sunday afternoon packages. They want to move all London games back to 1 PM ET and end the “breakfast football” games that kick off at 9:30 AM ET. And they want the league to cut the Thursday night package back to eight games. That latter point would be difficult for the league to acquiesce to; all eight games would need to be exclusive to NFL Network to meet the network’s own contractural agreements with TV partners, preventing them from selling the games to another partner or a streaming service and once again forcing them to produce the games themselves, and potentially irking cable operators seeing NFLN’s tonnage being reduced to what it used to be when it was having trouble finding partners. And there’s nowhere else for it to go; again, Sundays and Mondays are all tied up. Or are they?

If ESPN decides NFL games are no longer vital to their business, if they decide to go without the NFL in the next TV contract, because of market forces that mean the NFL can’t prop up the cable bundle or any particular cable network anymore, that opens up a package of games that the NFL likely can’t sell to ESPN or any outlet looking to imitate it, but can use for whatever other purpose the league wants. They can put half the games on NFL Network, at least as long as it remains a tenable proposition within the cable bundle, and sell the remaining half to broadcast networks as they do with TNF now, or to a streaming service like Amazon, potentially selling the full season once the cable bundle completely collapses. Without ESPN preventing the NFL from doing whatever they want with MNF, the league could turn Mondays into the experimental night Thursdays are now, potentially doing away with Thursday games entirely except for opening night, Thanksgiving, and the week after Thanksgiving when both teams can be taken from the Thanksgiving games and play on a full week’s rest, curbing concerns about the league wearing players into the ground to collect a pound of flesh it’s becoming increasingly difficult to collect.

The competitive concerns motivating ESPN to keep paying up for MNF haven’t completely eased; ESPN wouldn’t want to walk away from the NFL only to pave the path for Amazon to become a competitor for sports rights. But I continue to believe that no entity that doesn’t at least control a linear television platform can truly be a player for major sports rights, and while Amazon has a lot more going for it than most Internet outlets, it’s not immune to those fundamental forces. At the very least, if ESPN continues to control a linear outlet it has a major asset to offer to sports entities, and if Amazon were to find its way onto one, and spend as prodigiously on sports rights as media companies have over the past decade, it would risk losing some of the advantages Prime has over cable networks if not recreate the worst excesses of the cable bundle. ESPN can handle creating a new competitor in Amazon while freeing up funds to maintain its supremacy in other ways, the NFL gets to continue raking in money from whatever revenue streams are available even if they aren’t as big, and players and fans could potentially find themselves in a world without Thursday Night Football and all the excesses and problems it represents and perpetuates. Everyone wins.

What Happens If Disney Gets Blacked Out On Altice?

If it weren’t for the crappy state of everything else going on in the country (including Ajit Pai seemingly being about to dismantle net neutrality) it would be an exciting time for the evolution of the TV industry, as the cable bundle looks like it’s about to be on its last legs. Earlier this month, reports came out that Viacom, Discovery, Scripps, AMC, and A&E were joining forces to form their own, relatively cheap, skinny bundle called “Philo” – the inclusion of the last of which was very surprising to me, as A&E is co-owned by Disney and Hearst, which also (separately) co-own ESPN, and just the other four companies forming their own skinny bundle is the last thing ESPN wants. But Disney and ESPN have a bigger fight on their hands. Altice, the French conglomerate that now controls Cablevision and Suddenlink, hass Cablevision’s old carriage agreement with Disney expiring after this weekend. Disney has faced contentious carriage agreements with the likes of DirecTV and Dish in recent years, which have gotten certain elements of the media worked up over the possibility of showdowns with companies that had ramped up their rhetoric about the high price of sports and stood up to regional and college sports networks, but in the end the power of ESPN was too much to resist and the companies sucked up and signed up for another round of fee increases and adding the Longhorn and SEC networks. But just days before the expiration of the agreement, there seems to be no end in sight to the Altice standoff, and plenty of signs that Disney’s luck and indispensability has run out, not just with Altice but with other cable operators as well.

Were it not for these two stories, I wouldn’t normally think the decline of the cable bundle has reached a tipping point. Large majorities of people still subscribe to the cable bundle… but they’ve now fallen below the 80% mark, and it’s clear that things have reached a critical moment. Disney trying to add yet another high-priced regional ESPN spinoff, one with significantly less value than the SEC Network, certainly looks like an ill-timed misstep that sent things spiraling down further (and Disney wants Altice to add not only ACC Network to a fairly basic package in New York City, but SEC Network as well). On the other side, Disney has announced the launch of OTT Disney and ESPN services, with the latter being limited to events that won’t hurt the value of ESPN to cable providers too much to lose but the former being stocked by Disney pulling its movies off Netflix a relatively short time after signing a big deal to put them on. Continuing the return of sports to broadcast, Fox will air the majority of next year’s World Cup matches on its broadcast network, meaning if the United States makes it, matches that gave ESPN gerbonkers ratings in the last two World Cups will air on broadcast where they belong, possibly even on weekdays. And while I’m still, in general, skeptical of streaming services’ ability to win major sports rights while also justifying their cost, in the wake of their Thursday Night Football deal, it’s hard for me to argue against the notion that Amazon at least has the potential to overcome most, though not all, of the obstacles I worry about (the fundamental problem of streaming being inferior to deliver live events than real linear channels, which bedeviled Amazon this past Thursday, is in my view ultimately insurmountable) to become a real player for mid- to lower-tier sports events.

There’s also the recent history of carriage standoffs to consider. Before its acquisition by Altice, Suddenlink kept Viacom channels off its systems for nearly three years, with Cable One possibly still leaving those channels off their lineups, and both companies made clear that they were just fine without Viacom’s networks. Viacom is on the expensive end of the non-sports four and, at least at the time, didn’t have as many shows with serious buzz as the others, so it could have been considered more expendable than most other Big Nine members. By dropping Disney channels, Altice would be risking a significantly larger backlash, not only from sports fans but from fans of Disney Channel’s kids shows, especially with the Yankees playing their wild-card game on ESPN Tuesday. But if it coupled dropping the Disney channels with a significant drop in customers’ bills, it could gain more than that in goodwill from non-sports fans.

Meanwhile, sports and Disney fans aren’t as out of luck as in the carriage disputes of the past, thanks to online cable providers like Sling TV. No service carrying ESPN would cost less than the $10-15 that’s likely to be the most Altice would refund customers; Altice’s moves wouldn’t totally break up the cable bundle unless they dropped multiple companies’ programming. But what would hurt Altice, but is likely to hurt Disney more in the long term, is if customers dropped Altice’s TV service entirely in favor of Sling or a more comprehensive service like PlayStation Vue, DirecTV Now, YouTube, or Hulu. Based on listed prices, dropping down from a TV+Internet bundle to just Internet should save $20/month with Optimum for New York customers; throw in fees charged only to TV customers, and that could be enough to justify getting one of the online bundles for $35/month (and that’s assuming they don’t drop Optimum entirely for Verizon FiOS). Sports and Disney fans that drop Altice’s TV services entirely are no longer directly putting pressure on Altice to add them back to the lineup. If that gives Altice enough backbone to leave Disney off the lineup entirely, especially if people with no investment in those networks start telling them not to restore them and threatening to quit if they do (especially once Philo launches), it puts Disney, and ESPN more specifically, in a very tight spot financially, as well as in terms of standing up to other providers, with deals with Verizon, AT&T/DirecTV, and the old Time Warner Cable deals now controlled by Charter looming over the next two years.

In 2011, Dish chairman Charlie Ergen suggested there was room for a cable or satellite operator to position themselves as a cheaper non-sports alternative; today he thinks Altice can survive without ESPN, and he certainly must be rooting for it. If Altice is successful at saying no to Disney and ESPN, it gives other providers, as well as potential future online providers, more confidence to say the same. Altice is not one of the larger providers, but if they manage to weather the storm and spend two years or more without ESPN on their lineup, Disney will suddenly look like an emperor with no clothes, and will find it hard for their demands to be met when they enter negotiations with AT&T, Charter, and further down the line, Comcast and Dish, and will find it especially difficult to get the ACC Network off the ground. Couple that with the pending launch of Philo representing the one thing Disney hoped to avoid by staying shackled to the cable bundle, and suddenly there’s a very real possibility that ESPN goes full-on direct-to-consumer with all of their content before the end of the decade (and indeed A&E’s inclusion in Philo starts to look more understandable if Disney thinks the cable bundle is already collapsing). Sports fans would probably still need Fox, NBC, and Turner’s networks to get all the sports they want and need, at least in the short term, but a successful standoff with ESPN would also allow cable operators to show down with those companies for lower fees and lower penetration for expensive regional sports networks. It’s possible the sports four-and-a-half will start to find that clinging to the old cable bundle model will bring down their smaller and non-sports networks more than prop them up, making a sports-specific bundle an increasingly viable proposition. At that point, Disney might just bail on cable operators and even their would-be competitors and seek to salvage whatever revenue (and data) they can for themselves.

Even if Disney and Altice reach a deal, it could still be bad news for Disney, ESPN, and sports leagues. Disney wants to ratchet up its fees and restore some of the coverage lost when they gave providers flexibility to offer skinny bundles. If Disney takes lower fee increases than they’re hoping for and keeps ESPN at present levels of penetration to avoid the catastrophe of being outright dropped, they’re going to have to budget less money for production and rights fees. Look for more layoffs to come down the pike and ESPN to scale back on what they’re willing to bid for rights as they come up early in the next decade. And the ads Altice has been running have arguably already increased awareness of just how much of their cable bill is being passed on to ESPN regardless of how much or little customers watch it, meaning if a deal is reached without ESPN being dropped, there could be a deluge of customers dropping service.

Keep an eye on how this situation develops over the next couple days, because no matter what happens, it could well mark the point of no return for the sports cable boom, as well as the beginning of the end for the cable bundle as we know it, and the start of shaping whatever comes next.

For Fans of Lesser Sports Properties, the Party is Over

Back when I was posting more regularly about the sports TV wars – in part because the wars themselves were burning brighter and the stakes seemed higher – a point I routinely made was that, as good as the wars would be for the largest, most popular entities with content that could attract large audiences to sports networks, they would be an absolute boon to lesser entities that might not otherwise attract much of an audience at all, or even enough to justify their existence, as the glut of sports networks looked for properties to fill out the rest of their time. Truly tiny leagues and conferences didn’t see much of a bump from the wars (a TV deal with CBS Sports Network only kept the UFL afloat for an additional half season) but lower-mid-tier leagues, the sort that could attract audiences approaching a million on broadcast and regularly top several hundred thousand on networks the size of FS1 and NBCSN, saw their visibility vastly increased. As I explained in my book The Game to Show the Games (and as expanded upon here previously) no sport benefited from the glut of sports networks more than soccer, even before the sports TV wars properly became a thing, as a veritable soccer boom enveloped English-speaking America driven in large measure by coverage of the English Premier League on Fox Soccer Channel and its predecessor Fox Sports World, driving NBC to not only break the bank for Premier League rights but to make it as much of a tentpole for NBCSN as the NHL.

If no sport benefited more than soccer from the sports TV boom, no single deal demonstrated the power of TV to elevate a sport more than the Premier League’s deal with NBC. NBC’s high-quality coverage, semi-regular games on broadcast television, and dizzying array of games on NBCSN only scratched the surface of what NBC would do for the Premier League in America. Perhaps more remarkable was NBC’s decision to place all the games it couldn’t fit on its linear networks on an array of “Extra Time” channels and available for streaming for any subscriber to a cable package that included NBCSN. American viewers could watch every single Premier League game live, something people in England itself couldn’t say, if only because the Premier League contracts there were arranged to protect gate revenues, especially at lower-tier clubs.

This week, NBC announced that those games not airing on NBC’s linear services would now be available on a “Premier League Pass” subscription service, no longer free with NBCSN. The headline on Re/code touting this deal focused on the “no cable subscription required” aspect of the service, which is a bit disingenuous considering games on NBC’s cable networks aren’t part of the deal, but not really any different from people who get ESPN3 from their Internet provider (or who sign up for ESPN’s long-delayed direct-to-consumer offering) and get to watch mid-major college sports and less popular events without access to ESPN’s actual linear networks. Despite its uselessness to cord-cutters, though, I was surprised to see headlines on more soccer-focused sites bemoaning what a big step backward this was for NBC’s coverage of the Premier League, with Vice Sports going so far as to claim that the move of what it admits is “the crappiest third” of Premier League games to a premium service amounts to NBC “kill[ing] America’s EPL Golden Age“.

Certainly for Premier League fans used to signing up for the cable bundle, this is a huge step backwards. $50 is a relatively steep price, though for an entire season of Premier League games it compares favorably to American sports leagues’ pay-per-view/out-of-market/streaming services, which often top $100. And it’s not like Premier League fans can save money by just signing up for Premier League Pass, since again, it doesn’t include games on NBC’s linear networks. But it’s hard to declare the loss of the least interesting, most perfunctory matchups, that were already consigned to streaming and overflow channels, as completely undermining the visibility and value of the Premier League on American television, especially since given the ongoing shifts in the media landscape, a move like this may have been inevitable. Even if Extra Time wasn’t really “too good to be true” even at the time, setting aside specialized channels and propping up the cable bundle even more was becoming difficult to justify. With Premier League Pass, NBC is pivoting towards the sports distribution system of the future, one that more specifically targets fans of various sports, that sports networks in general will have to pivot towards.

As such, I’m not sure I agree with Richard Deitsch that this is entirely about monetizing a more expensive Premier League rights deal; if so it would raise the question of whether the deal was really worth it to begin with. I think there’s a bigger picture to look at here. Going back to its days as Versus, NBCSN has staked its territory around providing comprehensive coverage of sports that might get shorter shrift at ESPN or Fox, and that’s a territory that lends itself well to providing services oriented directly at those niche sports fans. The NBC Sports Gold service already sells access to many of those niche sports bundled together for up to $70 a year, but depending on how many butthurt Premier League fans (especially those that have attached themselves to teams further down the table) swallow their pride and pony up, Premier League Pass could easily make them more money. I could easily see NBC as laying the groundwork for the day it may ultimately have to shutter NBCSN in its current form and fold many of its rights into networks like CNBC or USA as the cable bundle finally utterly collapses, folding together many of its mid-to-lower tier rights into a direct-to-consumer offering targeted at the niche sports fans NBCSN serves today. I may have felt Fox was better positioned to run down ESPN than anyone else (certainly Fox themselves did) before it turned out Fox didn’t quite have the quality of rights to convince people to turn to FS1 on a regular basis, and I’m skeptical that anyone other than ESPN will survive the collapse of the cable bundle and shift to Internet streaming, but NBC may be better positioned than any of the alternatives to pivot to marketing a national service directly to the consumer, offering a simple value proposition to fans of niche sports (ignoring the question of the fate of local sports and what it would mean for Fox and NBC). With Premier League Pass, NBC is building the groundwork and subscriber base for whenever the day may come when NBC Sports Gold has to become its main offering to sports fans.

Ultimately, I think the effect of the Internet will be to collapse any intermediate distinctions preventing a step down from the ESPN level directly to pure streaming, with the only distinction being between the resources and quality poured into that streaming, with the likes of Amazon, Twitter, Facebook, and potentially Google on the high end, down to lesser offerings oriented towards more niche audiences like Premier League Pass, all the way down to free streams where there’s no room for monetization and no budget for any but the most rudimentary setups at all. For the truly tiniest leagues, I’m already seeing signs of streaming, of various degrees of monetization, being a boon to them; when the number of channels is effectively limitless, there’s little reason not to put up a stream of every game you have so long as you have the resources for it, especially when it comes to leagues popular in their home countries that just need to export their feeds to the States. But for these mid-tier leagues that have become used to comprehensive coverage subsidized by non-sports fans who continue to subscribe to the cable bundle, the party is over. Even if you believe that the most apocalyptic scenarios still involve the vast majority of Americans continuing to subscribe to some sort of comprehensive cable bundle for the foreseeable future, there’s still clear evidence of the fear of cord-cutting and sports-free packages driving sports networks to reduce their investment in mid-tier properties that don’t drive enough viewership and subscriptions on their own to justify the level of expense the cable bundle has inflated their perceived value to. Services like Premier League Pass are the first sign of sports networks sending a message that it’s time for sports fans to pay more of their fair share of the boom of sports television that has erupted in recent years.