How Screens are Shifting the World of Sports

Opinion by Brian Huynh. This piece is part of Behind the Game, a series by Alexander Stoney on the intersection of sports and public policy.

A series of screens on a black background.

What are Broadcasting Rights? Why are they Important?

Whether it’s hockey, football, tennis, or golf, it’s broadcasting rights that make the economics of sports spin round. Broadcasting rights are the legal rights bought by media companies: your CBCs, NBCs, FOX Sports. These rights allow media companies to broadcast the sport to viewers, and by doing so, these companies sell our attention to advertisers to make up for the cost of acquiring the broadcasting rights.


They may seem trivial, but broadcasting rights are the reason why the value of sports leagues is skyrocketing and media companies are champing at the bit for more sports content. In the digital age, sports are one of the safest and most profitable areas for media companies. The “live and perishable nature” of sports means that, unlike an episode of a sitcom, the replay value of an NFL match is nothing compared to the value of the match in real-time [1].

Studies have also shown that “sport[s] content not only generates improved advertising revenue and subscriber rates… it can also provide positive spill-over effects for a broadcaster’s brand and other programming” [2].

Consider the Super Bowl, arguably the biggest sporting event of the year: “When Fox TV lost the rights to the Super Bowl in 2015, total viewership numbers for Fox TV that year were down 12 [per cent]” [3]. Sports content has many pros, but the biggest pro is that it still brings in the most eyes consistently.

Not only are the media companies aware of the importance of sports content, so are the sport organizers. That is why right now is such a pivotal moment in broadcasting rights. In 2020-2021, the NFL, NBA, NHL, MLB, and English Premier League are all making, or have made, new broadcasting deals that have exceeded any in the past. Let’s break down what some of those big deals are.

The National Football League: Broadcasting Dominance

The National Football League (NFL) is a force to be reckoned with in the world of sports broadcasting. As North America’s most popular sports league, it’s to be expected that the NFL’s 2021 media deal would be big, but it was gigantic. In March 2021, the NFL signed deals with Amazon, CBS, ESPN/ABC, Fox, and NBC for broadcasting rights up to 2033. The deal is worth $113 billion US over 11 years, which is “an 80 [per cent] increase” from the NFL’s last media deal in 2014, which was worth $40.5 billion US over nine years [4] [5].

Concerns have been expressed by some following the 2021 Super Bowl which had the lowest viewership numbers since 2007. Despite these concerns, there is no other sport in the U.S. that draws in more viewers than American football, and this new 11-year deal illustrates how broadcasters don’t expect that to change anytime soon [6].

National Hockey League: Recent Level Up At the end of April 2021, the National Hockey League (NHL), Turner Sports, and ESPN reached a seven-year deal that will see the two broadcasters pay more than $600 million US per year for the right to broadcast NHL games [7]. The deal also sees Turner hosting three of the seven Stanley Cup finals, which “bucks the long-standing attachment of big games to the big networks: CBS, NBC, ABC, and FOX” [8].

National Basketball Association: Biding Its Time America’s #2 sport is currently biding its time. The National Basketball Association (NBA) signed a broadcasting deal worth reportedly $2.6 billion US per year for nine years in 2014 [9]. The deal is set to expire in 2025, and the NBA is aware of the new market they’ll be entering when it comes time to negotiate.

Insiders suggest that the NBA will aim for a rights package worth upwards of $70.2 billion US over nine years [10]. This shift would bring the NBA’s yearly $2.6 billion US per year to a whopping $7.8 billion US per year.

While the NFL’s media deal is larger, the stage has been set for the NBA to challenge the NFL’s title as the most valuable sports content in the coming decades. Compared to the NFL, analysts say that the NBA has “more global appeal… and has a younger demographic, too, as Generation Z continues to support the NBA and Gen Alpha appears to continue the trend” [11].

Major League Baseball: A Sinking Boat in A Rising Tide Major League Baseball (MLB) is currently at the negotiating table with ESPN to renew their long-standing broadcasting rights contract. In the 2012 deal, ESPN agreed to pay the MLB $700 million US per year for eight years [12]. Today, reports say ESPN is aiming to “trim its annual fee by roughly $150 million [US]” from the original $700 million US [13].

The average viewership of MLB matches is shrinking. In 2018, the average viewership was 761,434. In 2020, it was 358,947 [14]. While overall sports viewership fell in 2020 due to multiple factors, numbers like these should cause any analyst to reconsider the worth of the MLB even as the markets for sports media rights in North America continue to heat up.

English Premier League: Association Football Gone South The English Premier League (EPL) perfectly illustrates the stagnated state of the European football market. It has been reported that the EPL wishes to abandon “the usual auction process for the sale of its broadcast rights in the U.K. in favor of signing extensions to its existing agreements with its existing rightsholders” [15].

While demand has driven the amount generated from the public auction higher and higher each cycle, that has not been the case in recent years. While the 2016-2019 cycle saw £5.1 billion awarded for the broadcasting rights, the 2019-2022 cycle saw just £4.5 billion [16]. The EPL is betting that a private extension with their current partners will result in the greatest sub-£4.5 billion payout, but the private negotiation is not likely to be approved by the U.K. government.

Conclusion What does this stiff competition for broadcasting rights mean for us as consumers? Lower cable fees? Fewer ad breaks? More shoulder content? If we consider the example of the EPL, then not much. A study found that the European Commission’s attempts in the 2000s “to increase competition in the market for broadcasting live EPL games did nothing” for the consumer [17]. We can expect no decrease in the cost of cable, satellite, or streaming, and we can expect no added benefits for watching, but why?

Remember that we are not the clients of the leagues nor the broadcasters, but rather the advertisers. To borrow Tim Wu’s concept of the “attention merchant,” broadcasters sell our attention to advertisers, and to entice us to swallow the ads, we’re awarded game time [18].

This isn’t just an American or even a North American problem. Analysis of sports broadcasting in India and South Africa reveals that “[a]s in Western countries, over the last couple of decades, exclusive television rights to sporting events and competitions have been used as a ‘battering ram’ to open up pay-TV markets” [19]. As long as the business of sport is organized in this fashion, don’t expect to get anything more than the game you paid for with your wallet and your attention.

So, while a secret bidding war is waged behind closed doors and billions of dollars trade hands between mega-corporations, take solace in the fact that the games you want to watch will always be available on a screen somewhere.

Bibliography

[1] Fujak, Hunter, Stephen Frawley, and Stephen Bush. “Quantifying the Value of Sport Broadcast Rights.” Media International Australia 164, no. 1 (August 2017): 104–16. https://doi.org/10.1177/1329878X17698051.


[2] Ibid.


[3] Taylor, Gregory, and Barbara Thomass. “Sports Rights and Public Service Media/Public Broadcasting: Case Studies on Economic and Political Implications.” International Communication Gazette 79, no. 2 (March 2017): 111–19. https://doi.org/10.1177/1748048516689190.


[4] Mai, H. J. “New $113 Billion NFL Media Rights Deal Gives Fans More Options To Watch Games,” NPR (Washington, D.C.), Mar. 19, 2021.


[5] PledgeSports. “Biggest TV Rights Deals in Sport,” PledgeSports, 2014.


[6] Paulsen, “2020 Ratings Wrap: NFL dominates disastrous year,” Sports Media Watch, Jan. 2021.


[7] Knoll, Andrew. “N.H.L. and Turner Sports Reach 7-Year Media Rights Deal,” The New York Times (New York, NY), April 27, 2021.


[8] Ibid.


[9] Paulsen. “NBA Announces 9-Year Extension With ESPN, Turner, Through 2025,” Sports Media Watch, 2014.


[10] Young, Jabari. “NBA is next up for a big rights increase, and $75 billion is the price,” CNBC, (New York, NY), Mar. 22, 2021.


[11] Ibid.


[12] Young, Jabari. “MLB has a sports gambling wild card to protect its media rights,” CNBC, (New York, NY), Jan. 26, 2021.


[13] Ibid.


[14] Ibid.


[15] McCaskill, Steve. “Premier League Wants To ‘Abandon’ TV Rights Auction In Favor Of Private Sale,” Forbes, Apr. 27, 2021.


[16] Ibid.


[17] Butler, Robert, and Patrick Massey. “Has Competition in the Market for Subscription Sports Broadcasting Benefited Consumers? The Case of the English Premier League.” Journal of Sports Economics 20, no. 4 (May 2019): 603–24. https://doi.org/10.1177/1527002518784121.


[18] Wu, Tim. 2016. The attention merchants: the epic scramble to get inside our heads.


[19] Smith, Paul. “Television Sports Rights beyond the West: The Cases of India and South Africa.” Global Media and Communication 12, no. 1 (April 2016): 67–83. https://doi.org/10.1177/1742766515626829.