All eyes on RSNs as they sort out developing gambling market
The trend in sports media has been set for decades: New revenue streams make their debut nationally before trickling down to regional sports networks.
That was the case for HDTV in the late 1990s and early 2000s. It was the case for fantasy programming around a decade ago.
But when it comes to how sports media handles gambling, expect that trend to be turned upside down. Because states plan to roll out legalized gambling services at different speeds, sports media executives expect gambling-related programming and advertising will roll out locally first before hitting the national scene.
“I don’t have a recollection of new categories or new technology that has ever — just by virtue of other circumstances — rolled out regionally,” said Steve Raab, president of SportsNet New York, a regional sports network that holds the rights to the New York Mets. “If you’re a league, how do you address that? Because they tend to make and adjust rules.”
All eyes will be on Raab’s SNY, as it tries to figure out how to program and sell in a legalized gambling environment. SNY covers almost all of New Jersey, which has been one of the most aggressive states looking to roll out gambling services.
“Our hope and expectation is that this is an opportunity for us in the second half of 2018,” Raab said. “There are some states and some networks where my guess is that it could be a year or two — or never — before there’s an opportunity.”
SNY executives have been meeting for weeks to figure out what sort of new programming they should create around gambling. At some point this year, expect SNY to have a studio show that is focused on betting. Plus, the RSN’s nightly news show, “SportsNite,” will feature more reports on betting lines and injury reports.
“That will also create opportunities for advertisers looking to sponsor that kind of content,” Raab said.
Raab does not expect his channel’s game announcers to talk about point spreads or over/under marks during games.
Media executives generally have the same plans on a national level. But while they are excited over the prospects of increased ad revenue and viewer numbers that stem from the Supreme Court decision that legalized gambling, they caution that the timetable for gambling-related returns will not be soon.
“It’s a topic that has come up in just about every meeting we’ve had with a property, and I expect it will remain a main topic for at least the next year,” one network executive told me. “It will be impactful and good for us. But it will take five years or more for it to be in enough states to the point that it makes sense.”
Like SNY at the local level, expect national sports networks to test new types of gambling-related programming. Sources say FS1 and NBCSN already have started to look into developing gambling shows that could make their schedules as early as this fall. Plus, sources say ESPN will have two gambling-related shows up and running on its over-the-top platform, ESPN+, by the end of the year.
There’s a reason TV networks are so interested in gambling: The market is predicted to be huge. A 2017 report from the boutique research firm Eilers & Krejcik pegs a regulated sports betting marketplace in the U.S. as being worth between $7.1 billion and $15.8 billion, with as many as 44 million customers placing $245 billion in bets per year.
The report also predicts that 32 states will offer legalized sports betting within five years — enough states that would entice TV networks potentially to devote more programming to gambling.
There’s also the ratings question. It’s a nearly unanimous opinion that the legalization of sports betting will lead to bigger TV ratings. TV executives consistently cite the burgeoning popularity of fantasy football as a main reason why NFL TV ratings climbed so high several years ago.
“I don’t think there’s any question that it will help ratings,” Raab said. “People who wager on games not only are more likely to watch, but they’re more likely to watch longer. To what degree? I don’t know. But it’s more about it becoming a meaningful contributor to the ratings than if we didn’t have gambling.”
Tom Rogers, executive chairman of the in-game props app WinView Games, said legalized gambling can do more than help TV ratings. It also can help a sport’s average audiences get younger — particularly if bets can be made via mobile.
Rogers, who previously headed up Tivo and Primedia, said league commissioners have told him that they are trying to figure out how to reach those younger viewers.
“The commissioners all pointed to two very clear issues,” Rogers said. “One, millennial audiences watch television differently. And two, without somehow infusing the social media and social experiences that had become commonplace in terms of how they use media, sports is going to become somewhat antiquated.”
Essentially, Rogers believes the opportunities presented by gambling will force TV networks to develop better social media apps that will attract younger viewers.
Rogers said the high-definition rollout two decades ago was the last meaningful change to hit the TV business. He warned that if TV networks drag their feet, digital media companies such as Facebook, Apple, Amazon, Netflix and Google will be waiting to take advantage.
“If the existing network players don’t figure out some way to participate in all that, certainly the newer guys will understand how this deepens the engagement around social experience,” Rogers said. “People used to plop down and watch three hours of sports, regardless of how good or close the game was. Today, there are so many viewing options, holding audiences to the game just isn’t the same.”
Rogers believes in-game betting will be the type of application that will hold audiences to a game, citing a statistic that said most of the sports betting in Europe has moved from the outcome of a game to in-game wagers.
Rogers also believes that mobile apps will drive the popularity of sports betting in the United States.
“At first, we might have state rules that it might be land-based or casino or track,” he said. “Now that this is legalized, states and other stakeholders will want to generate the most money possible. I don’t think there’s any doubt that moving this into the digital and mobile realm will do that.”