Why Sports Programming Is a Safe Bet for Streaming's Future
Nothing drives viewership like sports, and with the rise of streaming TV, it’s a whole new ballgame. Just how important are sports to TV? Consider this: in 2022, 94 of the top 100 highest-rated programs were sports broadcasts! What will the future bring as more streamers get involved? How will the surge in sports betting shape the fortunes of teams, leagues and media partners?
For answers to these and more burning questions, the Simulmedia Salon Series turned to special guest and sports media all-star David Levy, the co-CEO and Founder of Horizon Sports & Experiences, the former President of Turner, and a member of the Broadcasting & Cable Hall of Fame. Below are highlights of the insights he shared with Dave Morgan, CEO and Founder of Simulmedia, and the Salon attendees:
Sports and Streaming
"There is no appointment viewing on entertainment anymore. I can't remember the last time anybody said, 'Oh, my god. I can't go out tonight, I have to go watch this show.' You go back seven years ago: there was no Peacock, there was no Paramount+, there was no HBO Max. And so where sports are being distributed, and the consumer habits, have completely changed, viewing habits have completely changed, and everything is portable now.
"The NFL and its first year on Amazon was a huge success. People say the ratings were down, but of course they're down -- it’s on a streaming service on a different platform that people aren't used to. It took me two weeks to figure out how to get the Fire Stick to work to get the NFL game on, but I did it, because I wanted to watch it. I also think the deal that MLS did with Apple is going to be unique.
"And I think the happiest person probably is [NBA commissioner] Adam Silver because he can now sit on the sidelines for two years and see how Amazon progresses and see how Apple progresses and see who’s going to go on with the other streaming services with the other media companies. But there's no doubt in my mind that he certainly has to play some role, because the next generation of fans are using streaming services."
The Future of ESPN
"First of all, just for full disclosure, I am also the Chairman of the Board of a company called Genius Sports, which basically buys the data live streaming rights from all the sports leagues, and then we repackage it and we sell it to sports books. So the reason why I disclose that is I really believe that sports books are either going to buy media companies, or media companies are going to buy sports books, or sports books are just going to create their own media companies. FanDuel is already out there with FanDuel TV. I think you're seeing a very strong aggressive move with DraftKings and their ownership of content.
"So ultimately ESPN is going to buy a sports book or create one of their own. That moment is when I think Disney will spin out the company, because I don't think it fits with the family-friendly brand. But right now, I think there's too too much positive cash flow with ESPN, so if I'm Disney, I want that under my books so I can build out the things I need to build out right now.
"Also, ESPN+ is in 27-28 million homes right now. It's not enough. Cable now is in 75 million homes paying $15-$20 a month for the entire ESPN portfolio. You do the math: it's a lot to give up and to shift over. So they still have to keep a lot of their quality high-end programming on ESPN. But as cord-cutting continues to happen and the number of homes gets down to 50 million, I think you're going to see a shifting of a lot of that programming out of ESPN and onto ESPN+. They may simulcast it first so it will be on both, and then the [MVPD] operators will yell and they'll take their $15 down to $12, but it's still 12 bucks. Then ultimately, all the programming will end up on ESPN+ and there'll still be programming on ESPN, but it will be much easier and safer to have the company spin out."
Will U.S. Media Companies Own Sports Teams?
"At Turner, we owned the Braves and we owned the Hawks for many years. I remember having this conversation with Ted Turner: I go, 'Why do you have the Atlanta Braves? What do you care about this baseball team?' He goes, 'I don't even like baseball.' I said, 'Okay, then why'd you buy the team?' He said, 'Because it's 125 games and I get three-and-a-half hours in primetime, that's a lot of programming I don't have to program for.' So he completely thought about it as a programming deal.
"Teams are hard to manage, I actually don't believe the leagues themselves want media companies to own teams anymore. I actually think the new nouveau buyers of teams now are going to be private equity companies, and you're starting to see it already."
How Will Sports Evolve on Streaming?
"I think it boils down to two words: personalization and gamification. Let’s use sports betting for example: If every single person in the United States that could possibly bet on something did so, it would only be 8% of the country. It's not that big. People think, 'Oh, 50% of the country is going to be betting.' No, it’s 8%. Now, 8% is a good number if you think about how big our country is. So there may be a betting feed [for a game], but it's not going to be for everyone -- you're not going to put out an entire betting feed for the other 92% that doesn't want to watch gambling stuff. But there will be feeds and personalization for what you want, and gamification is already happening. I think you're already seeing it on Amazon.
"When March Madness came to Turner, for the semi-finals and finals we actually had alternate telecasts with homies for the teams that were playing. So if Duke was playing Syracuse, we hired a bunch of Duke fanatic play-by-play guys and old Duke legends to be on the telecast in Syracuse. We did that on TNT and we had a Syracuse one on truTV, and on TBS was the normal Jim Nance broadcast. The Manning Brothers are the exact same thing -- it's just another feed. If you don't want to listen to the Manning Brothers, you don't have to, you can watch a great football game. But I think you're going to be able to have numerous feeds and sports betting is going to be one of them."
Creating Destination Programming With Sports
"It has to be authentic. You can't put A and B together if it's not authentic and it's not real and it doesn't have real brands on it -- it's not going to work. So when we did The Match at Turner in 2018, it was easy for me to understand it and create it. The two biggest names in golf were Tiger Woods and Phil Mickelson, and I knew television ratings were always 30% higher when they were on the leaderboard, so why not just take the higher 30% ratings, have them play against each other in a gambling match for $9-million bucks?
"It came easy. If you manufacture events and they're not easy to understand, you should probably not do it. As soon as I said 'pickleball with John McEnroe and Andre Agassi,' it worked. So Horizon Sports & Experiences is producing the Inaugural Pickleball Slam with Agassi, McEnore, Michael Chang and Andy Roddick competing for a $1 million purse at the Seminole Hard Rock Hotel & Casino in Hollywood, Florida on April 2, to be televised exclusively on ESPN."
Sports Betting and Viewer Engagement
"I was watching NFL football and college football all through the holidays; I had my kids and girlfriends and boyfriends all over at the house and every single one of them were on their phone doing parlays for $5 here, $5 there. Sports ratings are still growing because of engagement. If you bet on a game, you're 98% more likely to watch the game. If you're going to watch the game, you're engaged. If you're engaged, you spend more time watching. One of the Nielsen rankings, as you get ratings, is time spent viewing. So if you spend a little more time watching, ratings are going to go up. If ratings go up, advertising goes up. If advertising goes up, media rights go up. If media rights go up, franchise values go up. All from a $5 bet."
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