Baseball and Soccer Are America’s Future — But Not In The Way You Think
Recent bidding for the right to broadcast the UEFA Champions League reveals the future of how sports will be watched.
With the cancellation of two critically-acclaimed shows (“Fox Sports Live” and “Garbage Time” with Katie Nolan), Fox Sports 1 grabbed last week’s sports media headlines. But late Friday, Sports Business Journal reporter John Ourand dropped a news nugget that just keeps getting more interesting the deeper you go.
Let’s peel back this onion one piece at a time:
- The big surprise: Turner Sports wins the US English-language rights to UEFA Champions League.
- The price-tag: Turner will pay $60M per year, starting in Spring 2018 and expiring Spring 2021. That’s slightly less than what ESPN and Fox pay combined for their MLS packages, or roughly what it cost to make 2016’s hit comic-book movie Deadpool.
- The total US package (English and Spanish-speaking rights) is valued at $100M per year. That’s double what Fox is currently paying for the same rights.
- The last time Turner had soccer rights of any kind? The 1990 World Cup, when Ciao the Tetris-soccer-head welcomed the world to Italy.
5. Turner significantly outbid the two current primary US soccer rights holders: NBC, whose bid was utterly dismissed as “token”, and Fox.
6. ESPN did not officially submit a bid, but Major League Baseball’s BAMTech did, with the commitment to broadcast the biggest games on ESPN’s TV networks.
What does this tell us about soccer and media in the future?
Turner’s victory is certainly ripe for discussion. The wide gap between the wining and losing bids can be read as a sign of Turner’s commitment to soccer, or of Fox/NBC’s lukewarm interest in the Champions League.
However, the part of this bidding process that sheds more light on the future of sports media is BAMTech’s (effectively) joint bid with ESPN.
BAMTech, the “biggest media company you’ve never heard of”, is an offshoot of Major League Baseball’s Advanced Media group. Valued at $3B, this group specializes in the tricky art of streaming live-event content to massive audiences, and counts among its clients HBO, Sony PlayStationVUE and the NHL. Its success is securing the financial future of Major League Baseball, similar to how Amazon Web Services has become Amazon’s financial rock. The logic behind these offerings is simplistically brilliant: take internal processes and infrastructure that they have spent years developing out of the need to support their core public business, and sell them to companies who need them but aren’t equipped to perform them. It’s led AWS to become Amazon’s most profitable business unit, and a pillar on which they will build their future businesses.
On the surface, it’s no surprise to see a cutting-edge tech company like Amazon leading new technology development. You wouldn’t necessarily expect to see it from the grandfather’s rocking chair of US sports leagues, but ESPN likes it so much they plunked down a cool Billion-with-a-capital-B last year to buy a 30% stake in MLB’s BAMTech.
So, why BAMTech and not ESPN?
After ESPN’s investment in BAMTech 7 months ago, the partnership in this bid is not a surprise. What raises eyebrows is the fact that BAMTech was the title bidder. Ourand offers a detail about the bid that leads to an explanation:
BAMTech…would have placed the tournament’s biggest games on ESPN’s TV channels and made most of them available on an over-the-top service.
It seems like ESPN was willing to commit to using a high-value network time-slot for only the biggest games. Which makes sense.
But if ESPN was going to broadcast the earlier rounds of the tournament on their streaming-only platform, wouldn’t it have just presented itself as the title sponsor? Ourand’s phrasing above is key: the partnership was going to make the less popular games available on “an over-the-top service”, not “ESPN’s new streaming service or WatchESPN”.
When ESPN and BAMTech announced their partnership, most in the media thought that BAMTech would serve as the “behind-the-scenes” technology supporting ESPN’s streaming services, similar to their relationship with HBO and PlayStation. But letting BAMTech take the lead on the bid could be an indicator that ESPN/BAMTech were planning on offering a service outside of WatchESPN for these lower tier games.
The most clear sense of how this would look is a one-time subscription to watch only the current Champions League season, including subscriber-only studio shows, on- and off-field content, alternative announcer broadcasts and unique in-game camera angles. ESPN provides the production talent and equipment, BAMTech provides the streaming tech, user interface platform and collects the subscription fees.
We’re likely to see more of this kind of partnership in the future. Turner could have highlighted their own streaming company. But they decided to use their more well-known brand name, thereby keeping the focus on traditional broadcast networks, unlike BAMTech and ESPN.
Make no mistake, America’s interest in sports in not waning. Don’t be fooled by the NFL ratings decline this year, as ratings reporting can be deceiving. For those of you who subscribe to “follow-the-money” indicators, ad spending on NFL games rose 3% this year. There might not be a clearer indicator of successful media content than that.
Live sports is still the best bet around. Similar to Amazon, MLB Advanced Media and BAMTech are starting small, going after the more affordable US rights in an effort to build their own public brand. But to make a true impact, they’re going to have to actually start winning some of these bids. Once they do, the landscape of sports broadcasting will change…quickly.