NBA, MLB & NHL teams are expecting the revenue generated from local media rights (total $20.1 billion) to exceed the value of tickets sold (total $19.6 billion), for the first time in 2018; particularly noteworthy, if you consider cable TV is experiencing its fastest rate of decline on record. PwC sports practice leader Michael Keenan explained that “any consumer led disruption of the linear broadcast market in the near term, is unlikely to materially impair the media rights fee landscape.” +/-25 RSN contracts will expire before the next national opportunity arises, leading PwC to project RSN annual growth rates (4.3%) will outpace the growth of gate receipts (2.3%) through 2021.
Howie Long-Short: PwC is bullish on sports media rights because it sees several interested/viable outlets and a limited supply of rights packages. The company also sees that sports remain the most valuable programming on television. In 2016, 44 of the Top 50 most watched programs were sporting events. Keenan & Co. are right, sports media rights are going to skyrocket again in the next round of negotiations; linear operators have no choice but to bid aggressively and the competition for digital rights is expected to be fierce, with several FAANG companies looking to crack the space.
Fan Marino: Most of the discussion surrounding the proposed FOXA/DIS deal has focused on movie and television production assets, but it’s the network of RSNs DIS would gain control of that make this deal noteworthy for frugal sports fans. ESPN is going to add the content from the RSNs to their new ESPN+ platform. Once that occurs, let the cord cutting commence. If you live in Cleveland, can get the Indians and Cavs on ESPN+ and the Browns (and national NFL games) on Yahoo!, why are you still paying for cable?
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