There has been doom and gloom whenever sports and television rights are discussed in any article. Well the NCAA isn’t looking at the situation as glass half-empty. Instead of focusing on people cutting the cord, or ESPN losing revenue by the millions, conference heads are taking a positive outlook. Maybe current consumption patterns are dead, but the best business leaders look to what’s coming next as an opportunity. The Power 5 sees that opportunity in companies like Amazon, Twitter, Facebook, and Netflix.
Things are going to change. The old ways of sports rights deals can’t continue as currently constituted. Everyone knows that. That doesn’t mean that the sky is falling. In fact, these new tech companies can make things better for any of the owners of live sports television rights.
It’s simple economics. ESPN, Turner, CBS, and Comcast/NBC aren’t going away. They may not have as much money to spend on live television contracts, but there are companies with a ton of cash on hand looking to get into the viewers living room. Those companies are names every consumer is familiar with: Apple, Google, Amazon, Netflix, Hulu, Twitter, Facebook, Snapchat, even Yahoo!. When more competitors enter the marketplace it means that bids could be driven up to current levels. In fact, an aggressive tech company may want to overbid to ensure they land the rights to live sports properties.
That’s the position every league should be taking. No one knows what’s going to happen in 2023. Five years ago cord cutting was done on the fringe. It wasn’t widespread. People asked why they would turn in their DVD collection for streaming services. Things change fast.
There’s no reason for these rights holders to get depressed about the situation, because people will still watch. The new challenge is figuring out how to reach new demographics. If Amazon wants to have targeted advertising, there isn’t a better way to force people to give up information (location, demographic, interests, buying patterns etc. ) through their computer or connected device.
So things are changing. There’s no getting around change. The Power 5 commissioners understand that just because there is change doesn’t mean that all the money and rights fees are leaving with them. There are already skinny streaming bundles with a sports focus. The important thing is to try and see around the corner. Try and forecast out the best ways to connect with fans and create models that generate a similar amount of revenue — or more revenue — that is created today. ESPN and traditional media companies could make that change, but with more players coming into the marketplace this is an opportunity for the rights holders. It is a positive, not a negative.