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Volume 21 No. 34

Media

ESPN announced last week that it has secured the rights to Italy’s Serie A soccer league through 2020-21. But that news represents only one part of a larger story.

 

As part of the three-year, $55 million-per-year deal that it signed with IMG, ESPN also ended up with rights to England’s popular FA Cup tournament, sources said. The package also includes the rights to several other smaller international soccer leagues, all of which will be placed on ESPN+.

 

ESPN picked up the Serie A rights from beIN Sports, which had been paying around $28 million per year on average for the past three years. It picked up the FA Cup rights from Fox Sports, which had been paying an average of around $6 million per year for the past three years, sources said.

 

The deals, which ESPN will announce formally later this month, will fill ESPN+, which launched in April, with reams of soccer programming that executives hope will drive subscriptions for the fledgling service.

 

Last October, IMG picked up Serie A’s global rights through 2021. MP & Silva had held those rights. The latest deal was brokered by Hillary Mandel of IMG Media, a division of Endeavor. ESPN’s executive vice president of programming and scheduling, Burke Magnus, took the negotiating lead for ESPN.

 

Here are five main takeaways from these deals:

 

ESPN remains committed to soccer.

 

One of the questions surrounding new President Jimmy Pitaro’s promotion to head up ESPN dealt with whether he valued soccer as much as former President John Skipper.

 

This deal offered an emphatic answer to that question: he does. Pitaro’s ESPN may not spend as freely on soccer rights as Skipper’s ESPN did. But it’s clear that ESPN will remain committed to the sport under Pitaro.

 

Skipper’s passion for soccer was well-known. His first big deal heading up ESPN’s content group was to secure World Cup rights for 2010 and 2014. Under Skipper’s guidance, ESPN blew out World Cup coverage and helped popularize the English Premier League before those properties left for other networks.

 

FA Cup rights will give ESPN more content for its upstart ESPN+ platform.
Photo: Getty Images

Pitaro’s strategy toward soccer is different. He will use soccer programming as a cornerstone for ESPN’s streaming service, which also carries the full Major League Soccer out-of-market package, the English Football League, UEFA


Nations League and United Soccer League. It also produces a daily show called “ESPN FC.” ESPN sees soccer programming as one way to draw passionate fans to pay $5 per month to access ESPN+.

 

Though the bulk of the games will be on ESPN+, ESPN’s linear networks will still carry MLS games and a Serie A game of the week.

 

Turner shows commitment to soccer.

 

Turner Sports has emerged as a consistent bidder for European soccer rights that it will place on its streaming service B/R Live. While Turner did not submit a formal bid for Serie A or FA Cup rights, its top executives David Levy and Lenny Daniels were deeply involved in the negotiations and kicked the tires on the properties.

It’s easy to see why Turner would be interested. A deal for either property would have fit neatly into its streaming strategy. It carries a host of European soccer rights on B/R Live, including the Champions League, Europa League, Scottish Premiership, Belgium Jupiler League, Polish Cup and Swiss Cup.

Turner’s Levy has said that he wants to target sports that have passionate followings that schedule their games outside of prime time in the United States. That includes European soccer matches, where games are played in daytime, midweek time periods, when fans are at school or work and more likely to stream games.

 

Month of disastrous news for beIN.

 

BeIN Sports just went through the roughest four-day stretch of any sports television network in recent memory.

 

Comcast dropped beIN Sports from its Xfinity service on Aug. 2.


Verizon
dumped it from Fios the next day. Two days later, the Federal Communications Commission threw out the channel’s carriage complaint against Comcast. And the following day, ESPN announced that it had picked up Serie A rights, which made up beIN’s highest-profile programming. (Editor's note: BeIN returned to Verizon over the weekend in a deal cut after our deadline.)

 

In The Flo of Things

My colleague Michael Smith reports that FloSports signed a deal to stream 50 football and basketball games from the Southern Intercollegiate Athletic Conference.


The Atlanta-based SIAC, an NCAA Division II league of historically black colleges and universities, worked with Collegiate Sports Management Group — Michael Schreck and Ray Katz — on the deal. Live and on-demand games, including the men’s and women’s basketball tournaments, will run on the FloSports app, Flofootball.com and Flohoops.com. The conference also negotiated a five-game football package that will run on ESPN3, headlined by the Nov. 10 SIAC championship game. — John Ourand

BeIN still has deep pockets — it is operated by beIN Media Group, which is a spinoff of the Al Jazeera Media Network. And it still holds rights to well-known entities such as LaLiga, El Clásico, MotoGP, MotoAmerica, the WTA and Conference USA.

 

But it’s hard to see how beIN will be able to convince Comcast to give it carriage again. A Comcast source told me that the dispute had less to do with money, as beIN was asking for a small affiliate fee increase. Rather, Comcast was concerned that beIN would not be able to guarantee that it would keep those programming deals in place through the length of its affiliate deal. The Serie A move to ESPN underscores that point.

 

The bubble is not bursting.

 

ESPN is losing subscribers. Its rights fee payouts are increasing. But it still found enough money to pay an increase for Serie A and FA Cup rights.

 

For more than a decade, readers have asked me to write about the rights bubble that is about to burst. If this deal is an indication, it’s not close to happening yet. ESPN’s deal proves that media companies still are committed to paying a big rights fee for the sports they value. And it’s clear that ESPN values international soccer programming for its streaming service.

 

The Ronaldo Effect.

 

Much was written last week about how Cristiano Ronaldo’s July move from Real Madrid to Juventus helped spur ESPN’s deal. But every person contacted for this column said the presence of the world’s most popular soccer player in Italy did not affect the deal’s timing or its terms. In other words, ESPN was prepared to cut a similar Serie A deal regardless of where Ronaldo was playing this season. 

 

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

The long-running media rights dispute surrounding the Mid-Atlantic Sports Network, now well into its seventh year, will return this fall to Major League Baseball’s internal arbitration panel — but with a catch. 

The MASN battle between the Baltimore Orioles and Washington Nationals will be heard a second time, likely in November, by MLB’s Revenue Sharing Definitions Committee after the appellate division of the New York Supreme Court last year voted unanimously to vacate a 2014 decision by that panel granting higher rights fees to the Nationals. That ruling marked a historic overturning of an internal league arbitration by an outside court.

The O’s and Nats have co-owned the Mid-Atlantic Sports Network since 2005.
Photo: getty images

But as the case is set to return to the RSDC, the Orioles-controlled MASN will retain the right to appeal directly to the New York Court of Appeals, the state’s highest court, should there be an issue with the new proceedings. That will allow the Orioles to have an expedited appeal path with the court and to avoid again going through lower courts first. The case has been litigated in New York given that MLB’s headquarters are there and because that is where the RSDC arbitration happened. 

The state Supreme Court found the first RSDC hearing was unfairly biased toward the Nationals, in part due to overlapping legal representation between MLB, the Nationals and individual RSDC members. The three-person RSDC has since been reconstituted with new members: Milwaukee Brewers owner Mark Attanasio, Seattle Mariners President and CEO Kevin Mather, and Toronto Blue Jays President and CEO Mark Shapiro.

MASN executives previously said privately there was “no way” they would appear again before the RSDC. But that same state Supreme Court ruling last year ordered the case back before the league’s body, as opposed to an independent arbitrator. And in order for MASN to bring an appeal back before the state Court of Appeals, there needs to be something to actually appeal given the first RSDC decision no longer exists, which also necessitates the rehearing.

MLB Commissioner Rob Manfred last month again stressed his aim to have the parties adhere to the original 2005 agreement between the league and Orioles owner Peter Angelos that created MASN. That deal called for rights fees disputes between the Nationals and Orioles to go before the RSDC.

“I’m a big guy on agreements. If you live up to your agreements, you go a long way in life,” Manfred said.

The Nationals have said more than $200 million in total is in dispute between the 2012-16 rights fee period still being litigated and another period yet to be decided for 2017-21.

In the meantime, MASN has added high-powered attorney Jonathan Schiller, managing partner of Boies Schiller Flexner, to its legal team. Schiller’s sports representations in recent years have included DraftKings, the New York Yankees and the NFL.