The year ahead in sports media, through a digital crystal ball
Published January 5, 2009
The recession will take its toll on sports media in 2009. That doesn’t mean all business will stop, though; there are plenty of deals out there that should happen. Here’s how I see the landscape shaking out during the next 12 months in sports media.
NFL Network will merge with a media company.
Comcast will not renew its NFL Network deal when the contract expires early this year. With distribution dropping and the live games creating virtually no buzz with consumers, 2009 will be the year that NFL owners finally lose their patience with the five-year-old network. The owners will decide that they can’t wait until 2011, when the Sunday Ticket deal with DirecTV expires, finally giving them some leverage with cable operators. Both the NFL and ESPN say talks they had in 2008 about some sort of partnership are dead, so my bet is that the NFL will call on Fox to work the same distribution magic it used with the Big Ten Network.
The NCAA will decide to expand the men’s basketball tournament.
How do you think the NCAA felt when it saw the much-maligned BCS pick up a 50 percent increase for its five annual games to the tune of $495 million over four years? With its CBS contract expiring in 2013, I think the NCAA took full notice of the money ESPN is bringing to the table. That’s why, in the first half of this year, NCAA executives will come up with a plan to try to get some of that extra money by deciding to expand the men’s basketball tournament from 65 to 96 teams. Their hope is that ESPN will pick up some of the early round games, but CBS will have first right of refusal and won’t let them go. The expansion won’t take effect until 2013.
MLB Network will end the year with 60 million subscribers.
When it launched last week to 50 million homes, MLB Network became the most successful launch in cable history. By the time the season starts, or soon after, the channel will add 10 million subscribers from some of the few holdouts, like EchoStar. After that, significant distribution gains will be hard to come by, leaving revenue growth in the hands of channel ad sales head Bill Morningstar.
NHL Network and NBA TV will finally escape cable’s sports tiers.
By the time the 2009-10 regular season starts, NHL Network and NBA TV will be seen in many more homes by persuading cable operators, including Comcast and Time Warner, to move them off sports tiers onto better penetrated digital tiers. The moves won’t kill sports tiers, but they will make them even less popular than they are today.
NBC or CBS will be sold; Disney looks at a bid.
GE is more likely to sell NBC so it can refocus on its core business, but CBS also is in play. A longer shot: With Disney stock down about 30 percent this year, someone will make an unsuccessful run at buying the company. It will be a privately financed deal that shocks the markets but ultimately fizzles.
Olympic TV bidding gets pushed to 2010.
In October, the International Olympic Committee will choose the host city for the 2016 Summer Olympics. (The bet here is that Chicago will get it, but IOC voting is impossible to predict.) The IOC then will wait until after the 2010 Winter Olympics in Vancouver to accept U.S. TV bids, a delay brought on by the recession. When the IOC finally picks a broadcaster in the middle of 2010, ESPN will have outbid NBC, Fox and whoever else decides to bid, though the IOC won’t break the $2 billion barrier like it did in 2003 when NBC picked up the rights to 2010 and 2012.
The year will end with fewer sports networks.
At least one sports network — national or an RSN — will have to close up shop this year. One good bet is TVG, News Corp.’s horse racing channel, which reportedly is up for sale and lost the rights to races at Churchill Downs. Another possibility comes from the outdoor programming genre, which has two channels vying for attention: Outdoor Channel and Sportsmen’s Channel. Can both survive a prolonged recession?
The Mets will sell part of SNY to Comcast and Time Warner.
The Wilpons say that they don’t need to sell any part of the Mets or their RSN to make up money lost in the Bernard Madoff scandal. But if the Mets owners need a quick infusion of cash, I could see them selling a stake in SportsNet New York — especially if co-owners Comcast and Time Warner decide they want to increase their equity.
Postseason baseball games will start earlier this year.
First Fox announced that it is canceling its pregame show during baseball’s regular season. Now look for the broadcaster to start World Series games a half-hour earlier, closer to 8 p.m. ET. Fox has always maintained that later starting times helped ratings, which meant more people were watching. But this year, the World Series games went so much longer (average length for the three non-rain-delayed games was 3 hours, 15 minutes) and ended so late (average ending time was 11:43 p.m. ET) that ratings couldn’t keep up.
ESPN won’t make any moves with ESPN Classic this year.
Despite rumors that it’s about to become ESPN3, ESPN Classic will look exactly the same 12 months from now. But by then, Bristol insiders will know what they are going to do with that channel. My guess is that it will not become ESPN3. Rather, I bet ESPN dedicates the channel to a single genre (action sports?). Either that, or they eventually merge it with either the U.S. Olympic Committee’s planned channel (as part of the Olympics rights deal) or NFL Network. But that’s a prediction for next year.
Retransmission battles will replace cable operators’ carriage fights with sports networks.
The past few years were dominated by cable’s carriage battles with sports networks like NFL Network and Big Ten Network. But this year, cable operators will be focused more on retransmission consent fights with local broadcast channels, with most local channels looking to charge about a quarter a subscriber per month. Local stations are negotiating for the bulk of the retransmission deals and don’t want to share that added revenue with the networks. That will cause at least one network to explore whether it should dump the network affiliate model in favor of seeking a dual revenue model straight from the cable operators.
MMA will rule PPV, but will not sign a deal with ESPN or HBO.
Mixed martial arts will log more pay-per-view buys and more PPV revenue this year, especially with the imminent retirement of Oscar De La Hoya. But MMA still won’t be able to get airtime on either ESPN or HBO this year. It’s not just the brutality of the sport. The nets also are scared away by the lack of sponsorship dollars, which don’t look to be plentiful during the recession.
Verizon will buy DirecTV; AT&T takes EchoStar.
Here’s something that will happen not this year, but in 2010. Frustrated by the costs associated with rolling out video (it’s expensive to build a fiber plant), Verizon and AT&T believe that the only way to truly compete with cable companies is by picking up the two satellite players.
John Ourand can be reached at firstname.lastname@example.org.