Even after a chaotic year for TV, live sports remain tentpole programming. There have been major changes too, of course, in terms of how (and if) audiences are tuning in to watch live sports, ad dollars available, new TV rights deals, and more. But even with some significant industry shifts in progress, sports are going to play a major role in how the post-pandemic TV landscape shakes out -- be it on linear or streaming.

To discuss those topics a bit further, TV[R]EV talked to Beachfront Head of Partnerships Tom St. John, who recently spoke at the StreamTV Sports Summit. In the Q&A below, he shares his thoughts on how sports viewership is changing, the evolving makeup of rights deals, and the role of advertising in sports' evolution on television.

How has the pandemic adjusted sports viewership on TV?

Of course the pandemic shuttered live sports back in the spring of 2020. Traditional sports calendars were thrown out the window as a result, and when things resumed, viewers had a ton of sports content all competing for their attention at the same time come late summer and fall.  

We basically went from having a desert of sports content to having too much to consume at one time. This oversupply of premium events, when combined with distracted consumers, a historic election cycle, and emerging streaming options, caused viewership to drop across the board for sporting events.

This year’s Super Bowl saw its lowest ratings since 2007, but the tide is turning. MLB and NBA games are seeing increased ratings, and there are good returns for both the NCAA men's and women's basketball tournaments. Viewership is bouncing back to more normal levels for the most part, with a more predictable schedule as leagues try to reset patterns for consumers going forward.

Are sports navigating the shift to streaming, and if so, how?

Absolutely. Sports are definitely taking advantage of the shift to streaming, while also continuing to engage a massive pay TV audience. For larger leagues and tentpole events, there’s been an increase in simulcasts streaming alongside the usual TV broadcast, which is a great way to provide flexibility to the end user, while allowing advertisers to reach consumers across various platforms. 

For smaller, more niche sports and some regional sports networks (RSNs), we’ve seen a direct-to-consumer pathway take shape. The other clear avenue is partnering with one of the major platforms who already have scale, versus building out the expertise, technology partnerships, and go-to-market plan themselves; which is what we saw with the WWE Network’s deal with Peacock. In the battle for unique content, deals like this feed the hungry user base for Peacock, and can mean very lucrative paychecks to the league owners. 

Streaming is allowing sports to expand their footprint in growing geographies, too. International soccer leagues are just one example given ViacomCBS’s move to secure UEFA Champions League rights.

How is streaming going to affect the amount of money shelled out for rights going forward? (we've seen digital play a key role for the NFL’s new contract, and not take away from its value — does that happen for all leagues, though?)

Much like the NFL’s new rights deal, I’d expect streaming and digital to play complementary roles to larger TV packages for other leagues, only enhancing value through addressability. The rights deals may be more complex and bifurcated going forward, but the value will probably increase to the advertisers in the end due to improved targeting and measurement.

Pay TV is still where you can find the largest live sports audiences, and it’s still the easiest way for brands to transact and deliver messages to viewers at scale. I’d expect leagues both big and small to embrace emergent steaming and traditional pay TV in unison. It’s more of an “and” than an “or” propositions in my mind. 

What specific impact will the increase in sports streaming (and these new rights deals) have on legacy pay TV in particular?

There’s a lot of talk about the death of pay TV, and live sports is of course a giant  pillar of traditional television. But we all need to keep in mind that pay TV will remain north of 60MM households through 2025, and ad spend is expected to hold steady at least through that point. So, pay TV -- and especially sports on pay TV -- aren’t going anywhere any time soon. 

We’ll continue to see sports leagues make content available across screens to ensure they reach both cord cutters and cord keepers, which only reflects the dramatic convergence happening across TV right now. This opens up a ton of interesting advertising opportunities for programmers and distributors, in terms of being able to uniformly monetize inventory across both environments. 

What role is advertising playing in sports specifically, both for viewers and for broadcasters or services (in terms of revenue generation)?

Advertising is built into the fabric of sports as a whole, and has been for decades. We see it with TV timeouts, brands finding engaging ways for their commercials to tie in the love of the game, and sponsorships in arenas and on uniforms… the list goes on. 

For viewers and TV services, advertising keeps content affordable which is key for maintaining accessibility. It supports teams and leagues, and often does in a way that we've come to enjoy as part of the live sports experience

If you consider the ad experience for sports content that is streamed, however, there are a lot of issues that need to be addressed. You have repetitive ads, streams crashing during the ad break, and “commercial break in progress” messages, all of which occur too frequently and frustrate viewers.

Commercial breaks during sports games on pay TV are generally more structured and engaging for the viewer. So, it’s really important that as adoption continues, we give services and leagues the tools needed to deliver better quality, more “TV-like” ad experiences that viewers have come to expect 

In terms of monetizing sports content, what can addressable advertising in particular offer to media owners?

Addressable advertising (on linear TV especially) unlocks a ton of opportunity and value for media owners, like premium pricing -- which comes along organically with easier targeting and measurement for advertisers.

Addressable advertising brings a whole host of applications that are ideal for brands already investing heavily in sports programming. The opportunity to do creative versioning for auto advertisers as an example; replacing a generic national spot creative with a truck ad for a truck intender household, or with a minivan ad for households with more than four people is just one obvious one. The implications are great for what this brings to linear TV buys. 

Addressable alone is set to contribute north of $3 billion to the pay TV ecosystem by next year, and broadcasters and media owners who host sporting events will be a big beneficiary of this technology maturing