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Volume 26 No. 65
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Will Amazon's Bid For RSNs Push Sports Rights Into Digital Realm?

Amazon's bid for all 22 Fox-branded RSNs that Disney is selling comes as teams and leagues have been "waiting for digital giants like Apple, Facebook and Google to make a push into acquiring live sports rights," with any significant deal with Amazon "potentially shifting live sports rights into a digital sphere," according to Ben Strauss of the WASHINGTON POST. Should Amazon acquire the RSNs, several industry experts speculated that "local game broadcasts could eventually be used to boost the value of a Prime membership." Media consulting company TV Rev co-Founder Alan Wolk suggested that with a "slate of new media products soon to be offered by rival companies -- Netflix-like options from Warner, Apple and Disney -- live sports could be a differentiator for Amazon." Strauss notes putting games "behind a paywall and requiring viewers to have a Prime membership, though, might not sit well with professional sports teams that want to reach as many fans as possible." Octagon Senior VP Dan Cohen suggested that Amazon "could introduce a model where a baseball team, for example, might put some of its games behind a Prime paywall, while other broadcasts would be available to stream free" (WASHINGTON POST, 11/21). THE BIG LEAD's Ryan Glasspiegel wrote there has been plenty of speculation about the "threat of new Internet players joining the fray for premium live sports rights." They have "nibbled around the edges," but thus far the "new-money firms like Amazon, Netflix, Facebook, Google, Twitter, and Yahoo have not really dove into exclusive rights for A-List properties." A serious bid by Amazon for the RSNs "signals that they are going to be big players in the next round of live rights" (THEBIGLEAD.com, 11/20).

STREAMING WARS: ZACKS INVESTMENT RESEARCH's Benjamin Rain noted Amazon has already "spent heavily on original content and made live sports a priority." As Apple and others "jump into live streaming the companies will have to compete against each other for subscribers more than ever before." Amazon’s ability to "offer streaming movies, TV, and live sports, not to mention its shipping deals, could help it come out on top of the battle for streaming supremacy" (ZACKS.com, 11/20). FAST COMPANY's Jared Newman wrote Amazon's bid is "noteworthy as the company tries to build à la carte TV through Amazon Channels." That service "allows Prime members to add premium channels such as HBO and Starz through a single app and billing system, and Amazon says it’s seen 'millions' of these add-on subscriptions so far." Bringing in "live sports could give Amazon a big advantage over rivals like Roku and Apple, which are reportedly working on similar à la carte plans." It could also "accelerate the collapse of traditional pay-TV bundles, which are becoming more dependent on sports to keep subscribers around" (FASTCOMPANY.com, 11/20).

MONTHLY REVENUE PER SUB FOR FOX-OWNED RSNs (ACCORDING TO KAGAN)
RSN
REVENUE PER SUBSCRIBER
RSN
REVENUE PER SUBSCRIBER
YES Network
$6.37
FS Indiana
$2.67
FS Detroit
$5.84
FS Tennessee
$2.54
FS Arizona
$4.84
FS Sun
$2.32
FS Ohio
$4.07
SportsTime Ohio
$2.20
FS Midwest
$3.93
FS Prime Ticket
$2.14
FS Wisconsin
$3.35
FS Florida
$1.88
FS Southwest
$3.14
FS Southeast
$1.86
FS West
$3.12
FS K.C.
$1.77
FS North
$2.95
FS South
$1.63
FS Oklahoma
$2.80
FS New Orleans
$1.49
FS San Diego
$2.79
FS Carolinas
$0.85
Download the
Fox RSN Sub Fees

LINGERING EFFECTS: CNBC.com's Alex Sherman wrote the threat of Amazon buying sports rights "should scare traditional media companies that are banking on owning must-see live content to stay alive in an on-demand world." In Disney's case, Amazon's interest is a "double-edged sword." On the "plus side, a competitive bidding situation could push up the sale price, which could top" $20B. Amazon's interest "could drive the price for Fox up, helping Disney get the maximum value from the assets it has to divest." On the other hand, despite "all the chatter around Disney+, Disney is still very much a traditional media company, and its largest media asset by revenue is ESPN." Owning sports rights is "critical to ESPN's long-term success." Selling sports rights to a "giant like Amazon" could spur other tech giants "like Apple, Google and Facebook to bid on sports rights to stay competitive" (CNBC.com, 11/20).

WHO ELSE IS INTERESTED? FORBES' David Bloom noted other bidders for the RSNs "include the private-equity companies Apollo Global Management, KKR and The Blackstone Group, as well as the nation's biggest broadcast station chain, Sinclair Broadcast Group, and Tegna, the former Gannett broadcast and digital media divisions" (FORBES.com, 11/20).