Media wave of change: Sale of Disney RSNs and sports betting’s impact
Endeavor’s Karen Brodkin and Blue Sky Media’s Leslie Gittess were sitting on a Hawaiian beach over the holidays with their families. It didn’t take long for their conversation to speculate on who was going to buy the 22 Fox regional sports networks from Disney.
“One of us says several are going to the FAANGs [Facebook, Amazon, Apple, Netflix or Google],” the two executives emailed from the beach. “The other says they are going back to Fox.”
It’s not every day that a $20 billion acquisition hits the sports media market in the United States, and predictions about who will own and run the RSNs has become one of the most popular parlor games in sports media. Disney has 90 days to sell the RSNs from when it closes its purchase of 21st Century Fox’s entertainment assets.
The RSN sale comes as pay-TV distributors continue to shed subscribers. Desser Sports Media’s Ed Desser said he is most interested in seeing if cord cutting will continue, or if sports fans become the key line of defense in stemming that trend.
“I expect a number of big content deals to start closing [NFL, MLB, AAC] in 2019 but most will be similar to current arrangements with changes mostly around the edges,” he said.
Pilson Communications’ Neal Pilson agreed, saying the value of sports leagues will continue to rise given the current sports media climate.
“Properties like the NFL, NBA, MLB, CFP, NHL, NCAA Tournament, MLS, Olympics, power five college conferences, major golf and tennis events are more attractive as selling platforms today than they were 25 years ago because the competition for viewers is more intense and the lesser options cannot deliver the desired audience,” he said. “Yes, the more things change, the more they stay the same.”
But sports media in 2019 will be defined by much more than the RSN sale and cord-cutting trends. Several top sports media executives also are looking at the impact of sports gambling, which Octagon’s Dan Cohen believes will be a catalyst for audience growth — both in-arena and on television — in the same way that the popularity of fantasy football helped the NFL’s TV ratings a decade ago.
Legalized betting will categorically alter the sports business ecosystem, said Cohen, senior vice president of Octagon’s global media consulting group. “Leagues will design and carve up new rights packages and the smart ones will profit greatly. … Broadcasters will innovate with interactive betting technologies, new content and in-game digital products. We will witness a rise in M&A activity in this sector to accelerate revenue growth and reach.”
LHB Sports President and CEO Lee Berke agreed, saying he expects 2019 to be the start of a multiyear process where sports properties sync up media and gaming rights.
“It will be challenging as new gambling laws are rolled out state by state, new media technologies attempt to reduce the cross-platform latency and national and regional media agreements expire and are revamped,” he said. “Eventually, all of it will be structured to offer up a frictionless multiscreen experience as fans watch and some bet on the favorites in-venue, at home and anywhere online.”
Wasserman’s Dean Jordan said he expects 2019 to be the year that media companies implement policies to reduce password sharing.
“The financial impact on distributors and content owners across all formats is too significant for the issue to continue unchecked,” he said. “Technology solutions are either currently available or are in development that range from simply capping the various user machinations against a subscription to several advanced options, including geographic proximity requirements, approved user registrations and limits on total devices, among others.”