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Asking around: What’s the sports business story you’re following?

The glut of sports programming in the fall contributed to ratings dips for many events, including the NBA Finals. Will the numbers rise as sports return to their regular spots on the calendar?getty images

usually ask my sources to identify the most important sports business story they are following. Their answers provide an unofficial editorial calendar for me and offer a glimpse at some of the issues facing sports media these days. 

 

Here are some of the most recent responses, which have been edited.

Ratings

As the NBA, NHL and MLB enter their second seasons without fans in venues, I’m curious to see whether TV ratings will rise from the deflated COVID-era numbers we faced this summer and fall. The glut of programming had a lot to do with those suppressed ratings. So many sports came back all at one time — there was so much programming out there competing with each other. As each sport gets back to their traditional seasons, I expect ratings to rise. A rising tide lifts all boats, and once fans get back into stadiums, their engagement with sports overall will lift.

David Rone
Senior managing director, Guggenheim Partners

The Power of Media Revenue

Hopefully in 2021, we will be able to see the nuanced economic impact of the pandemic on existing, renewed and new media rights deals. This will include both the evolution of the visual product the properties will deliver and the post-pandemic financial strength of media entities. The reality seems to be that this will become clearer in the third quarter of 2021.

The first nuance for me, and we’ve already seen some of this, is the impact that media deals have had on return to play. This includes properties like the NCAA basketball tournament, where insurance protections for revenue may have been exhausted.

What will the reality be of fans returning — both in venue and on television? Will the ratings level out as normalcy returns or will there be some lasting impact to the pandemic? Will producing games without fans impact the value of the product? What about advertising opportunities that may, or may not, exist going forward, in the empty seating locations? 

Finally, as with all sectors, force majeure clauses will be reviewed more closely and specific pandemic language and other contingencies will be interesting to review. 

Kenneth L. Shropshire
CEO, Global Sport Institute
Professor emeritus, Wharton School

Washington Football Team

The sports business story I’m following most closely is the trajectory of the Washington Football Team’s organization. I’ve been a fan of the team since my childhood in D.C., watching the team rack up three Super Bowl wins within a decade in my childhood. But it’s not the wins and losses on the football field I’m going to be counting.

Many are watching Jason Wright’s moves as president of the Washington Football Team.Washington Football Team

In August, Jason Wright, the McKinsey consultant, became the team’s president. Yes, in August of 2020, Jason Wright became the first Black president of an NFL franchise. I care about that because, as a Black man in America, seeing leaders of color is deeply important to me to continue to build for the generation coming behind me. 

Wright’s success won’t be sufficiently measured at the end of next season. It will be measured in years to come. We’re going to see if the diversity hire becomes the winning formula for the success of a team, a region and a league. Wright already has begun to build the most diverse senior management team in the NFL and professional sports. Will his team’s success open doors for others to do the same? I sure hope so. We need him to succeed. This will set the precedent that needs to continue to impact our entire industry and quite frankly, our country.

Derrick Heggans
Founder/CEO, GSB Academy

DirecTV Sale

AT&T bought DirecTV in 2015 at a $49 billion valuation. Now just a couple of years later, it’s looking to flip it for what appears to be around $15 billion. That’s a significant reduction in value.

I’m seeing reports that DirecTV is going to end up in private equity hands. Moving from a huge conglomerate to private equity would be different for DirecTV, which traditionally branded itself as a sports-focused distributor with rights to “NFL Sunday Ticket.” What impact that sale will have on that aspect of the sports business and the distribution business is going to be really interesting to see.

Rob Freeman
Partner and co-head, TMT Group; member, Sports Law Group, Proskauer

Media Rights

A lot of the rights deals for the legacy leagues are being negotiated now. We’re keeping a close track on how the NFL rights negotiations are evolving. The trickle-down impact from that will be significant in terms of how media rights deals are going to be structured.

The future of media rights deals won’t be cut strictly on acquiring rights for television and selling advertising in-game. It’s going to be acquiring rights both for television and networks’ digital businesses, like Peacock or ESPN+ or CBS All Access. Leagues are prepared for that.

While people are used to buying media rights on a total tonnage of viewership across broadcast and cable, we’re also now looking at properties that have younger demographics that are unafraid to subscribe to SVODs and OTTs.

Paul Rabil
Co-founder, Premier Lacrosse League

John Ourand can be reached at jourand@sportsbusinessjournal.com. Follow him on Twitter @Ourand_SBJ and read his twice-weekly newsletter.

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