SBJ/April 2-8, 2012/Media

Experts expect to see tech giants at sports rights table soon

John Ourand
Microsoft, Apple, Google, Yahoo! and other similar companies may start investing in sports media rights sooner than you think.

That was one of my key takeaways from a panel with some of the smartest minds in the sports media business at our World Congress of Sports held late last month.

When asked which sports business story they would be following most closely over the next 12 months, four of the five executives talked about nontraditional media companies.

Check out their answers:

Bedrocket Media Ventures co-founder and CEO Brian Bedol: “Will one of these new platforms write a big check and use sports as Fox and DirecTV did to really break into the mass audience business?”

NFL Network President and CEO Steve Bornstein: “Are these virtual competitors out there real? Is Google or Yahoo! really going to make a leap and try to bring entertainment to the consumer into the home?”

Dick Clark Productions CEO Mark Shapiro: “They’re coming. There’s no question. And they have the pockets to do it. They’ve got to get the technology. And they’ve got to get the content.”

Pac-12 Enterprises CEO Gary Stevenson: “Will the big technology companies make the investment and really want to be a player in this industry? It’s part of the reason we put our building in San Francisco, as opposed to Los Angeles, because we’re a pitching wedge away from them and we can have a conversation.”

I was surprised with the time frame these executives are putting on this move, and while much of sports media has been focused on having CBS or Fox or NBC creating a competitor to ESPN, some on the panel said companies like Microsoft and Google could be the sleeping giants of the sports media marketplace.

“Certainly NBC and Comcast and cable competitors are buying into content,” Stevenson said. “To me, [the biggest competitors to ESPN] are Microsoft and Apple and Google, who have recognized that our content is a way to help aggregate audiences. Brands like the NFL, Pac-12 or NBA are interesting ways for them to segment their content. I believe that’s where the competition is coming from. Last time I checked, they have pretty deep pockets.”

This is good news for rights holders, who are hoping to see the same competition for digital rights that they are seeing with linear TV rights. The NFL’s Bornstein pointed at digital companies as a reason why the league’s rights fees should continue to grow. Even if cable and satellite business slows, these new companies will need live events — like sports — to draw audiences.

“It’s the only place you can aggregate large audiences,” Bornstein said. “Everybody says everything is going to plateau. I think the value of sports assets are only going to continue to be increased.”

A concern, however, is that the amount of online content will make it more difficult to aggregate big enough audiences to attract advertisers, which ultimately fund the rights fees.

“How are you going to launch the next big idea?” Bornstein added. “If you create FedEx, how are you going to tell people about it if consumption of media is so fragmented that you have to buy a billion impressions across a million assets?”

Still, the panelists were convinced that changes are coming to how consumers will view sports. And it’s coming sooner than many think.

“Where it gets interesting is when more and more people have the Internet connected to the big screen and there’s no difference between what you’re getting over cable and what you’re getting over the Internet,” Bedol said. “People are going to gravitate not just to the best screen. They’re going to gravitate to the best experience.”

In fact, Stevenson said the Pac-12 has had conversations with digital media companies for the conference’s digital rights for the 1,300 to 1,400 mainly Olympic sports events that it will make available online.

“Whether we do that in partnership with Google/YouTube or whether we do that ourselves, that’s yet to be decided,” he said. “We’ve had some conversations. For us, that makes sense. That may not make sense for the NFL or somebody else.”

Lots of questions remain about what the digital world will look like. But digital media’s deep pockets and gaudy growth strategies are enough to get the sports media world to take a long, hard look.

John Ourand can be reached at jourand@sportsbusinessjournal.com. Follow him on Twitter @Ourand_SBJ.

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