If you watch TV and most people do, what events brings the most people to want to watch TV? The the answers is sports – watching live sports was 95 out of the 100 most viewed programs. If you are a consumer of beer, there are many sports bars or areas where you can eat and drink with patrons while watching TV. If you can not be at the game the next best thing is a sports bar and if you can not be at a sports bar you have your TV at home. If you know the history of FOX, one of the first things they did was to offer the NFL owners a seemingly large amount of money for the rights to show NFL football and eventually the Super Bowl. The ability to show live sports brought viewers and then it was up to FOX to send them to their other shows.
In an article by Tripp Mickle, Kevin Draper and Benjamin Mullin of the New York Times News Service, the strategy of FOX is being replaced by the streaming services of big tech. The streaming services of Apple and Amazon need content and offering sports content will mean people will subscribe to the service for the live sports. The issue is always how much should big tech pay to receive the rights to live sports?
DirecTV has the rights to NFL Sunday Ticket and pays about $1 billion a year, they decided to not to continue which means the price is going up to $2.5 billion annually. DirecTV says it has been losing money $500 million a year (they must have only receive $500 million plus on advertising) but did benefit from the 2 million subscribers.
Apple is the leading contender and President Tim Cook has made the rounds to the NFL and equally important the NFL owners who will vote on the media package. Some of the owners are Jerry Jones of the Dallas Cowboys and Robert Kraft of the New England Patriots.
Other companies which are expected to make bids are Amazon, ESPN+ (owned by Disney) and You Tube (owned by Alphabet).
The biggest media companies such as Disney, Comcast, Paramount and Fox are expected to spend $24.2 billion for live sports rights in 2024 which is nearly double what they spent 10 years ago according to MoffettNathanson, an investment firm that tracks the industry.
Apple started its $4.99 streaming service Apple TV+ in 2019 and has 16.3 million subscribers in the US according to Antenna, an analytics firm for video on demand services. Amazon has 200 million subscribers to Amazon Prime although people can subscribe to Prime Video only for $8.99.
Recently Apple Sports added MLB or Major League Baseball.
Amazon agreed to pay $1 billion a year for Thursday night NFL games an increase of 50%.
ESPN outbid Amazon for Formula One racing for $75 million, a 15 fold increase from the prior contact according to the Sports Business Journal.
Comcast which owns NBC Universal closed down NBC Sports Network and moved the games to Peacock where it aired some English Premier League soccer games.
CBS owns Paramount+ and has shown US league soccer games.
The NBA is with ESPN and Turner through the 2024-25 season.
Linking to dividend paying stocks, sports brings in viewers and many viewers bring its advertising which brings in revenues to make the cycle pay for itself. As long as people enjoy watching sports, advertisers who are looking for a mass market will pay. There will be many delineations to the target audience but in general advertises need to seek consumers. If sports is the way, sports is the way. Where does your favorite team play? given stadiums have a name to them.
There are more questions than answers, till the next time – to raising questions.