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Volume 21 No. 1
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Uncertainty ups the degree of difficulty on annual predictions

T
he future of sports media is filled with more uncertainty today than at any time over the past two decades. The two biggest questions in the business surround the two biggest deals:

Will AT&T be allowed to buy Time Warner and create a media behemoth?

Will regulators be OK with Disney picking up Fox entertainment assets and RSNs?

This ambiguity extends to the deep-pocketed digital players, too. The question being asked in every league boardroom and network suite is whether Amazon, Facebook and Twitter finally will make real investments for live sports rights.

Right now, my best sources have no unanimity on anything that’s going to happen next year. With that as a prelude, here are my best guesses at what will happen in 2018.

Disney-Fox deal sails through the regulatory process
This is hardly a bold prediction, but it’s what comes afterward that’s interesting. Rupert Murdoch will roll Fox News into News Corp. and sell the broadcast network and Fox Sports to Amazon. Lots of suitors will line up to buy Fox Sports and the network — Comcast, Sinclair, Sony. But Amazon has the money and the desire to extend its reach to broadcast television.

Disney sells some RSNs to Comcast and AT&T
One area of the Disney-Fox deal that will interest regulators is the increased power Fox’s RSNs will give Disney in the sports market. Distributors hate the idea of Disney owning ESPN plus 22 RSNs — the most expensive channels by far. Look for Disney to placate some of that opposition by selling RSNs to Comcast and AT&T in the markets where they own cable systems. That means Fox’s RSNs in Detroit, Minneapolis and Miami will move to Comcast, and its RSN in Dallas will go to AT&T.

SBJ/SBD Exec. Editor Abe Madkour talks media and tech trends with Sports Media Advisors CEO Doug Perlman. Perlman offers his POV on the latest in media rights, what the new tech players mean to future rights fees and competition, while also chiming in on his favorite Duke Blue Devils, New York Yankees and Giants:

The AT&T-Time Warner deal happens
AT&T and the Justice Department will reach a settlement before trial that allows Turner to become part of AT&T. The concessions will be bigger than AT&T hoped but will not include either the sale of CNN or DirecTV.

AT&T picks up UFC rights

PREDICTION: AT&T gets UFC rights.
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I know Fox is the clear front-runner to retain this package. But I have an inkling that once the AT&T deal gains approval, Turner’s David Levy will sign a big-time media rights deal that would put the UFC on all AT&T platforms. Imagine UFC fights on truTV, pay-per-view cards on DirecTV, mobile programming on AT&T Wireless, and over-the-top rights on Turner’s planned sports service. A caveat: If the AT&T deal is rejected (or if it takes too long), the UFC will cut a deal with Fox for around $250 million that will see Fox give up shows like “Ultimate Fighter” that UFC will shop elsewhere. Amazon showed early interest in picking up a streaming package, but it ultimately will pass on a UFC deal.

WWE moves to Fox Sports
Once the UFC walks away from Fox Sports, the network will sign a deal with WWE, which will use WWE shows to fill programming holes left by the UFC. A caveat: If the AT&T deal is rejected (or if it takes too long), or if Fox completes its UFC deal, WWE will renew with NBC.

“Thursday Night Football” stays on CBS, NBC

PREDICTION: “Thursday Night Football” stays put.
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Because of falling ratings and squeezed profit margins, CBS and NBC dearly want to turn down the NFL’s “Thursday Night Football.” Amazon will make a run at an exclusive package on the theory that the NFL considers “TNF” a laboratory for innovation of sorts. When push comes to shove, the networks will pony up and keep the package. The two will not pay a meaningful increase.

Amazon renews “TNF” streaming deal
Facebook and YouTube will make a run at the “TNF” streaming rights, but the NFL will stay with Amazon for a second season. Look for the NFL to push the Amazon streams more aggressively. From Yahoo to Twitter to Amazon, the NFL’s digital numbers on “TNF” have been disappointing, averaging just a couple hundred thousand viewers a game. That’s less than 3 percent of the overall audience. That number could jump to as high as 7-9 percent next season.

Some college conferences deal with Facebook Live

PREDICTION: Mountain West football to be streamed on Facebook Live and Stadium.
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The Mountain West will reject an offer from ESPN and instead stream its football games on Facebook Live and Stadium, a decision that gives the conference full control over its start times. While the conference will have less money to distribute among its members, its fans won’t miss the 8:30 p.m. midweek kickoffs in November.

Facebook gets active with sports rights
We already know that Facebook is in the market for an executive to buy sports rights for the social media giant. While his budget of a few billion dollars sounds impressive, the company will shy away from making big, splashy purchases in favor of smaller, international rights deals. One of the executive’s first moves will be to secure Formula One media rights in specific global markets.

YouTube moves into local sports
When it comes to digital rights, the sports community’s focus has been on Amazon, Facebook and Twitter. 2018 is the year YouTube will start to make serious inroads, especially with local rights. Think, for example, of a Los Angeles YouTube channel that holds the digital rights to LAFC, the Clippers and the Dodgers.

The Cubs channel plan goes away
I’ve always been skeptical that the Cubs will launch their own TV channel when the team’s rights are up in 2019. Next year is the year that my long-held prediction finally comes to pass. The Cubs will sign a long-term deal with Comcast, alongside the Blackhawks, Bulls and White Sox. The reason: There aren’t enough credible suitors. The Cubs have to decide this summer if the team wants to launch its own RSN, to give it enough time to be ready for the 2020 season. But Fox is selling its RSNs to Disney and AT&T is fighting with the Justice Department. Plus, private equity is not excited about investing in a declining pay-TV market. That leaves Comcast.

Networks launch successful OTT sports platforms
Turner will be the first to launch a sports OTT product. ESPN and CBS will follow. ESPN’s OTT offering will be a surprise hit. ESPN has the deepest rights portfolio by far, which will give its OTT service plenty of programming that will attract subscribers. It will be interesting to see the different programming acquisitions strategy by the networks, as those weekday afternoon windows, when people are at work or school, become much more valuable.

U.S. Supreme Court overturns PASPA
Legalized sports betting is coming. Look for the leagues to try to control its rollout by working together to lobby for a federal bill that supersedes the court’s decision. Leagues see legalized sports betting as something that can increase overall interest and TV ratings, which is why they are studying the European model to see how they can best position themselves to capitalize on the opportunity.

The Ratings Story
There’s not a lot of good news here, as more people cut the cord. ESPN’s new morning show will look splashy, gain a ton of press and pick up a lot of financial investment. Ratings will disappoint, though. The Winter Olympics will post some of the lowest-rated nights in the history of the sport, but NBC will declare a ratings victory with its total audience measurement system that counts digital viewers. NFL ratings will continue to fall next season, but NFL games still will be the biggest draw on television. Without the U.S. men’s national team, World Cup ratings will flirt with record low viewership numbers. Final Four ratings will get hit hard, not due to the ongoing FBI college hoops probe, but due to the shift from broadcast/CBS in 2017 to cable/TBS in 2018. The NBA will be one of the few bright spots, as playoff ratings will start to approach the Michael Jordan-era NBA.

Turner and Twitch distribute NBA 2K League
Turner’s strong relationship with the NBA goes back several decades. Turner has been more aggressive than any other network with esports. It’s not much of a stretch to see Turner sign a deal to distribute NBA 2K League, following a similar strategy it has set with Eleague. That means limited linear coverage for competitions and shoulder programming on TNT and NBA TV, complemented by extensive coverage on Twitch.

2018 is still not the year for VR
I had to have at least one prediction in here that I know is right.

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