Right now, sports likely play a massive role in your home entertainment choices. If you’re a big fan of at least one major sport, you’ve likely chosen a cable package in your area that allows you to watch your favorite teams, or keep up with your favorite leagues. You might be paying hundreds of dollars extra every year to make sure you have the right channels, so you never miss an important game.
That’s because traditional media companies like CBS, ESPN, NBC, Fox, and Turner have the rights to most of the major league sports in the United States, and they have those rights secured with multi-year contract. Otherwise, some left-field competitor like Netflix or Amazon could buy up the rights and stream sports on their own, alternative channels.
For the time being, you’re going to be stuck with your traditional cable or satellite package if you want to catch all these big games—but that all might change in 2021.
Bidding Rights in 2021
Why is 2021 such a big year for sports media? That’s when the bidding rights for four major U.S. sports are going to start becoming open once again: the NFL, the NBA, the NHL, and the MLB. The MLB goes live in 2021. The NFL will become open in 2021 and 2022, though Thursday night games could go up in 2020. The NHL will be open in 2022, and the NBA will open in 2025.
Obviously, traditional media companies will try their best to retain the rights to broadcast these games. These are multi-million dollar deals, and are incredibly valuable for attracting and retaining subscribers. They’re also some of the most profitable forms of entertainment available, due in part to the sheer number of viewers they attract on a regular basis.
That said, it could be time for a shift. Tech companies have already started encroaching on previously existing media empires, offering cheaper, more convenient streaming options for TV shows and movies. They’ll likely be wiling—if not desperate—to add sports to their lineups as well.
This isn’t just speculation, either. Already, the MLB has given Facebook the exclusive rights to 25 afternoon games, which serves as a signal for the potential future of sports broadcasting. Other tech companies have started showing sports highlights and other clips when possible, catering to existing sports audiences while generating more revenue for themselves in the process.
Key Considerations
Does this mean that starting in 2021, all your favorite sports will start gravitating toward streaming channels and away from traditional media? Not necessarily. Much still hangs in the air.
- Unreliable or unestablished coverage. Tech companies and streaming services don’t yet have the reliable infrastructure necessary to make them trusted for large-scale sporting events. YouTube TV, for example, recently dropped the ball with an outage during a major World Cup match. If leaders in sports media want to make sure their events are broadcast as reliably as possible, with no interruptions and the largest possible audience, they may not want to join up with a streaming service.
- The bidding war. It’s hard to tell who would be willing to pay more for the rights to broadcast these lucrative games. Traditional media companies like ESPN are almost wholly dependent on sports for their income, and losing the rights to more than one major franchise could be problematic for their long-term future. But tech companies have lots of buying power—and have shown a willingness to spend whatever it takes to get an edge over their competitors.
- Traditional media changes. It’s unlikely that traditional media companies will keep things the same, even if they retain the rights to their biggest moneymakers. Knowing the threat of streaming services still exist, they’ll likely work to improve the accessibility, cost, and features of their own services. That could mean launching their own streaming app, or broadcasting sporting events in some new, innovative way.
- The first domino. The MLB is the first major league to be up for bidding, in 2021. How that bidding war goes could indicate how the subsequent dominoes fall. For example, if it’s overtaken by a tech company, it could inspire other tech companies to compete harder for the remaining league, or motivate traditional media companies to win back territory in other areas.
In any case, the next several years are going to be interesting. It’s estimated that by 2021, sports media rights alone are going to grow to become a $23 billion business—and that’s just in North America. Pay close attention to the moves made by your favorite leagues in the near future, and be prepared for major changes, even if traditional media companies retain ownership of their current properties.
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