An end to rising rights fees? Panel says, ‘No way’

In the never-ending debate over whether sports rights have peaked, rightsholders remain bullish that their TV revenue will continue to rise.
 
During the opening panel of the 2014 World Congress of Sports, Maple Leaf Sports & Entertainment President Tim Leiweke said cable and satellite distributors said 15 years ago that sports rights had hit a ceiling, but “it’s just not true.”
 
“Today we live in a world where the most valuable programming of all is that unpredictable, live event,” Leiweke said. “Because we’re unpredictable, because no one knows what’s going to happen, our rights are going to continue to explode. The whole world now is our market, not just North America.”
 
MLS Commissioner Don Garber said that his league has just negotiated a rights increase of more than 50 percent from TV broadcasters. He declined to name the broadcasters because the deals haven’t been signed, but MLS reportedly is finalizing an 8-year deal with Fox and ESPN that will pay it more than $70 million a year.
 
“The consumer is changing,” Garber said. “They’re younger. They’re coming into being influencers, and not necessarily going into households that are paying for cable the way the vast majority of households are today. I don’t know where it looks 20 or 25 years from now, but it’s going to continue to grow.”
 
NASCAR CEO Brian France said not much can reverse the recent increases in rights fees because most of the rights in North America have been locked up for the next decade. Only the NBA and Big Ten have rights deals up for negotiation in the next few years.
 
“Things are settled, and the more digital we become, the more platforms we extend out in clever ways, the very valuable appointment viewing program just gets better,” France said. “As long as the world gets bigger and … sports is still the one thing you can’t miss live, we’re in good shape.”
 
Google/YouTube Global Sports Head Claude Ruibal said that as long as the number of distribution platforms expands, the rightsholders will continue to have the upper hand in negotiations. He noted that properties like to say that they have met with Google about their rights, even though Google has no plans to compete with traditional broadcasters for rights.
 
“I keep trying to pitch that we’re just a distribution platform and not a buyer of content,” Ruibal said. He added that “for now” the company won’t be at the table for NBA or Big Ten rights.
 
Leiweke said that he hasn’t seen the rights situation change for more than a decade and doesn’t think it will change in the next decade either. “One thing’s consistent,” he said. “For 15 years, sports teams have said the rights fee are going to go way up. For 15 years, the networks and distributors have said they won’t. And for 15 years, the sports teams have been right.” 
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Related Topics:

World Congress of Sports, MLS, Fox, ESPN, NFL

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