September 1, 2024
This week brought yet another announcement that professional sports and their associated television networks are diving deeper into the direct-to-consumer pool.
This time, it’s some of New York’s biggest sports franchises—the Yankees, Nets, Rangers, and Knicks—teaming up through YES Network and MSG Networks to launch a new DTC app called Gotham Sports.
By itself, this might not seem like news. But what is newsworthy is what this signals: the slow but steady erosion of local television rights, the last barrier keeping potential cord-cutters tethered to their traditional cable packages.
Leagues have already started diversifying their audience reach through OTT platforms like Prime Video, Apple TV+, Peacock, and Roku. These moves haven’t just fattened the wallets of league owners; they’ve also been subtly training fans to subscribe directly to platforms for access to their favorite teams. This shift should have the major MVPDs seriously sweating because, by 2030, they likely won’t be relevant distribution partners for these leagues anymore.
Here’s why: The value leagues can extract from a direct relationship with their fans goes far beyond just subscription fees. We’re talking about tapping into revenue streams from merchandise, ticket sales, and even enhanced fan experiences like AR/VR or alternative broadcast feeds. On top of that, they can offer co-op advertising that’s finely tuned to individual preferences, driven by intent, affinity, and loyalty. All of this adds up to a massive value-add that traditional cable simply can’t compete with.
So, what we’re seeing isn’t just a new way to watch the game; it’s a seismic shift in the entire ecosystem of sports media. Leagues are building direct pipelines to their audiences, and that’s going to change everything—from how content is delivered to how fans engage with their favorite teams.
For the fans, this is just the beginning of a whole new world of access and experiences.
For the MVPD’s? It’s a loud and clear signal: adapt or get left behind.
Recent Milestone Deals
Here are some examples, represented in the chart above, of the largest sports streaming deals since 2022.
NFL Sunday Ticket - In December 2022, Google signed a multi-year deal with the NFL to bring the NFL Sunday Ticket to YouTube TV and YouTube Primetime Channels. This marks the first time Sunday Ticket is available on a streaming service, with Google reportedly paying around $2 billion per year for the rights.
Apple TV+ & Major League Soccer (MLS) - Apple secured a groundbreaking 10-year deal to stream every MLS game globally starting in 2023. This deal, valued at $2.5 billion, includes a dedicated streaming service within the Apple TV app, making MLS one of the first major sports leagues to offer all its games through a single streaming platform.
Amazon Prime Video - Continuing its expansion into sports, Amazon Prime Video renewed its exclusive streaming rights for Thursday Night Football (TNF) through the 2033 season. The deal, signed earlier, is valued at approximately $1 billion annually and began in 2022, making TNF a staple of Prime Video's sports offerings. Additionally, just last month Amazon was awarded NBA streaming rights that take effect next season.
ESPN+ & NHL - ESPN+ continues to expand its sports portfolio with an extended deal with the NHL. This agreement allows ESPN+ to stream over 1,000 out-of-market games each season, making it a go-to platform for hockey fans.
These deals underscore the shift from traditional broadcast and cable networks to streaming platforms, with major tech companies like Google, Apple, and Amazon playing increasingly significant roles in sports media. The trend highlights how streaming services are not only competing but are becoming the preferred partners for sports leagues, potentially setting the stage for a future where live sports are predominantly consumed through digital platforms.
What does this mean for leagues?
The big four and two halves (NFL, MLB, NBA, NHL and MLS) are already in the process of digital transformation. As we’ve seen with international sports leagues (F1, Premier League, La Liga) there has been much experimentation with new direct to consumer paths to revenue and audience expansion.
For smaller leagues, this new paradigm shift makes the barriers to entry to fan acces less difficult and if packaged properly can deliver significant value by reaching niche global audiences on demand and building a following from there.
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