Under David Zaslav’s leadership, Discovery has been making big bets on sports programming internationally.
But when the 21 Fox Sports-branded regional sports networks came on the market last year, Zaslav stayed on the sidelines. The RSNs seemed like an easy — and expensive — way for Discovery to get a sporting foothold in the U.S. market. After all, it used a similar strategy in Europe seven years ago when it bought an existing sports channel in Eurosport.
“We just felt like it’s a very treacherous market,” Zaslav said on stage at the CAA World Congress of Sports earlier this month.
“We just felt like it’s a very treacherous market,” said Discovery President and CEO David Zaslav. tony florez
Zaslav went on to express more skepticism than I was expecting over the future of RSNs and the cost of U.S. sports rights. Those costs — from broadcaster retransmission consent fees to cable network affiliate rates — have created a market where multichannel television in the United States regularly exceeds $100 per month. In many international markets, the cost of multichannel television is as low as $15 per month, he said.
“We look at it, and we say, ‘It’s near the end. It’s near the end,’” he said. “Sports is always going to be extremely powerful. But all these regional sports networks, a couple of years from now, can all that continue? Can you force every customer to pay for sports? I don’t think so. I think that you’ve already started to see skinny bundles without sports. Regional sports networks have been dropped.”
Zaslav highlighted his U.S. channels, all of which are relatively inexpensive for distributors to carry. “Right now, we’re seen as the friendly person to put on every platform with great content,” he said.
“On the one hand, sports has never been more powerful. But in some areas, it’s been used financially to such an extent that it’s tipping over.”
In a later interview at the conference, Fox Sports President Mark Silverman was not nearly as bearish about the future of the RSNs as Zaslav, although his company opted not to get involved in the bidding process to buy them back from Disney.
Silverman said the RSNs were too big an entity for the scaled-down new Fox.
“The decision was made, ‘We want to be leaner. We want to be smaller. We want to be more opportunistic,’” he said. “Having that massive amount of additional elements to your company makes it difficult to achieve that. It remains to be seen. People have been calling for the demise of a lot of things and things tend to happen a lot slower than people tend to think. There’s a lot of strong viewership in a lot of these markets for the RSNs. I’m not convinced that there’s any short-term demise ahead of the RSNs at all.”
John Ourand can be reached at jourand@sportsbusinessjournal.com. Follow him on Twitter @Ourand_SBJ.
