This should be an epic time for sports on TV: This week’s Monday Night Football rematch of February’s Super Bowl set a viewership record. The NBA’s first in-season tournament promises to become a lucrative new fixture. College football’s massive conference realignment, and next year’s greatly expanded playoffs, should drive big viewership. Even stodgy old Major League Baseball had a viewer renaissance this summer, thanks to big rules changes that livened and shortened games.
According to Forbes, sports-rights spending is projected to jump from $15.3 billion this year to $22 billion by 2027, according to data released by consultancy Parks Associates at its recent “Future of Video” conference in Los Angeles.
“Sports has never been more valuable,” said sports startup investor John Kosner at the conference. Kosner, a former ESPN senior executive, co-founded Micromanagement Ventures with former NBA Commissioner David Stern.
“It's live, you have to watch it live,” Kosner continued. “Athletes have to rest, so there are natural parts where you can put ads in. Sports is the only (programming) that will offer everybody's attention live, and that's only going to grow in the future. It's not part of the mix, it's going to drive advertising.”
And yet.
Media companies that depend on sports rights to keep audiences tuning in are downsizing fast in a swiftly changing landscape. Not all of them will be able to afford the escalating prices on those rights in the future, or perhaps even continue paying for the ones they’ve already commissioned.
Even Disney, the traditional media giant that owns ESPN and ABC and is best positioned among Hollywood companies to compete for sports rights, filed an SEC 10K document Wednesday saying it will cut program spending across cable, broadcast, and streaming from $33 billion to $25 billion next year. That’s a whopping 24% cut. The company also will produce fewer shows for the same money, as it pays more to cover inflation and new labor contracts.
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