LANDOVER - NOVEMBER 26: The official football for the National Football League, with the signature ... [+]
I expect that many traditional media execs will view tonight’s kickoff of the National Football League season, along with the return of college football and the approaching fall sports calendar, as their reliable anchor in a turbulent media storm. Unfortunately for the captains of industry that nervously pace the decks late at night – not to mention the crews that keep the ships running – the sands beneath that anchor are shifting dramatically and unpredictably.
It’s not that there aren’t any enticing ports. Women’s sports are clearly gaining in well-earned fan excitement and viewership, from the LSU-Iowa NCAA basketball final in the spring to Women’s World Cup soccer to the return of Olympic hero Simone Biles. The U.S. Open and tennis in general are benefitting from a renewed prominence of American men and the post-Serena Williams women. ESPN’s Manning cast and the start-up sports media platform Hang are innovating in the presentation of live sports content. And of course, the NFL remains the 800-lb. gorilla with its seemingly endless TV ratings domination.
But for an anchor there sure are a lot of cracks showing. The money demands of playing in the sports media game continue to grow exponentially. Big-time sports has always demanded a lot of money whether its aspiring team owners, eager-to-win-now general managers, sports broadcasters, or cities competing to keep or lure a sports franchise. But we’re at a different level entirely today. Robert Kraft bought the New England Patriots for $174 million in 1994. Today’s franchise value? $6.7 billion. The Baltimore Orioles revolutionized baseball stadium construction with Oriole Park at Camden Yards for $110 million in 1989. The cost in 2020 for SoFi Stadium, the state-of-the-art home of the Los Angeles Rams and Chargers? $5.5 billion. As for the Orioles themselves, despite sitting in first place in their division in MLB’s American League, their owners have raised serious questions about their ability to even be competitive in years to come without massive real estate development to undergird future player investment.
Beyond the run of the mill billionaire money, we have the infusion of super-sized money from sovereign wealth funds such as in Saudi Arabia’s Public Investment Fund (PIF). That country’s massive backing of LIV Golf has completely transformed the face of the sport, driving a once unthinkable merger with the hallowed PGA Tour, assuming a not-so-assured approval from the Biden Administration. This endless pool of money has also fueled a seemingly limitless bidding war for premier talent in soccer/football, with Christiano Ronaldo signing with the SAl Nassr team for $200 million per year. Oops…that just got topped by the offer from the Saudi PIF-owned Al-Hilal of $1.1 billion for Kylian Mbappe - $332 million in transfer fees and $776 million for one year’s salary. Gee, all of this makes the deal for the highest-paid NBA player look reasonable. Who is that you wonder? Jaylen Brown of the Boston Celtics, not even that team’s best player, who now makes a mere $60 million per year.
The folks who must pay these bills to stay competitive are not eating the expenses – they’ve got to get advertisers, broadcasters and the streaming platforms that now compete with them to pony up. The NFL’s TV rights are locked up for years moving forward but will require an ultimate payout of $110 billion from a declining traditional TV business. The NBA will expect a much bigger payday its new deal. NBCUniversal paid $110 million for the right to exclusively stream exactly ONE
While big tech money is threatening on one end, from the other we see the rapid collapse of regional sports networks (RSNs), long the pillar of live broadcasting for the regular seasons of MLB, the NBA and NHL. Sinclair’s purchase from Disney of the former Fox RSNs led to a partnership with Bally’s that is now mired in bankruptcy. NESN, the RSN owned by the Boston Red Sox and Boston Bruins, is now offering a direct-to-consumer option but at $30/month that’s a heavy lift even in sports-mad Boston. That product and others like it will be a tough sell in any case, but an even iffier proposition where the teams don’t have the extraordinary money necessary to compete for the top players. All of this has created a bit of turn-the-clock-back movement towards broadcasting again, but that’s really an advertising play with the hope of boosting broadcaster attractiveness in retransmission consent negotiations. Not a bad idea for broadcasters except that the subscribers paying for these fees are decreasing, not increasing.
All of this in a way leads to the extraordinary tumult that is college football, arguably the most popular sport in much of the country, with a religious fervor attached to fall weekends. Tradition has always been at the root of much of the passion. I grew up California dreaming in part by watching USC and UCLA battle in sunny December skies and then play a gritty midwestern Big Ten team in the Rose Bowl. Nothing is bigger in Oklahoma than the Bedlam game between Oklahoma University and Oklahoma State. Much of that is now threatened.
But money is a double-edged sword. Huge money has poured into college football as evidenced by the massive deals the broadcast networks and ESPN invested earlier this year. Yet that in turn has led every major football school to scramble for the biggest possible payday. The PAC-12 (“Pacific” is in the title!), long the home of not just USC and UCLA but Stanford, Cal, University of Washington and a conference that overall has more championships than any other, will be gone after this year, a victim of being pecked to death by other conferences pilfering new members. OU-Oklahoma State? They won’t even be in the same conference next year. Players rightfully resent being the unpaid chattel for the big money boys and have won court battles to receive at least some compensation. This in turn has led to a flood in the “transfer portal” meaning supposed students are jumping from one university to another like professional free agents. If I was investing billions of dollars to televise these games, I’d be more than a little concerned about a sport whose structure has little to do with its first name – college.
Ultimately sports may still serve as a better anchor than anything else right now for a beleaguered traditional TV world. But if that’s the case it says a lot more about everything else at play than about sports.