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Volume 21 No. 10
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Media executives gear up for fight with Amazon’s sports play

The sports industry is focused on Amazon.

In private conversations over the past several weeks, sports media executives have expressed far more concern about competing for sports rights with the Seattle-based tech giant than any other digital company.

One senior TV executive compared Amazon’s business model to the dual revenue stream that cable channels like ESPN and Fox Sports have used for years to push rights fees higher — but instead of subs and advertising, it’s subs and advertising and e-commerce.

“All Amazon has to do is decide to get more people to Amazon Prime, and those people will order more stuff,” said the executive, who asked for anonymity so that he could speak frankly about a competitor. “Amazon doesn’t care if they order aspirin or toilet paper or onesies. It doesn’t matter to them, so long as they’re ordering stuff from Amazon.”

An executive with one sports property described recent talks where Amazon was particularly aggressive in trying to pick up rights. Amazon wasn’t just looking for streaming rights, the executive said. It wanted to own the whole media package, and it was prepared to pay a premium for those rights. In many cases, Amazon’s position in the sports business mirrors the strategy successful cable channels used when they first started taking sports rights from broadcast channels in the 1980s and 1990s. They bid aggressively high, forcing properties to decide between taking more money or maintaining broadcast audiences. Eventually, most took the money.

Right now, many of the properties contacted for this story are skittish about taking all of their rights off of television, which delivers mass audiences.

But that doesn’t mean some won’t. Sources say Amazon is paying more than $13 million per year for ATP Tour rights in Britain, outbidding the incumbent, Sky. And executives are watching to see if Amazon will be a major bidder when big time NFL, MLB and NHL rights come to market in a few years.

The senior TV executive will be watching closely, but has his doubts Amazon is ready to draw an audience right away. “I just don’t know if it’s going to work. When you put NFL games on Amazon Prime, are people really going to think it’s better than TV?”