« Back to Posts

Sports Leagues Trying to Cash in on (Maybe) Last Big TV Rights Rush

For years, the most valuable piece of U.S. television real estate has been live sports. With the advent of DVR, streaming and mobile devices, live sporting events were the one thing seemingly free of the effects of the modern entertainment environment. That fact drove up the cost of TV rights for both professional and college sports in America. And it still does — for now, anyway.

The most lucrative college sports conferences — ACC, Big Ten, Big 12, Pac-12 and SEC — are largely locked into TV deals through 2023 or ’24, with some contracts. Though deals like the SEC’s and its recent agreement with ABC — in the “low $300 million per year” range, per Sports Business Journal, for a portion of Saturday football rights — are moving to secure their financial futures further out.

Pro sports leagues have similar arrangements. The NBA’s deal with ESPN and Turner runs through 2023. NHL rights with NBC are set to expire in 2021. Major League Baseball is actually set through 2028. And the NFL, with a deal set to expire in 2021, is not only sitting on the biggest TV deals in American sports — it’s actively looking to improve upon those contracts as it fast-tracks negotiations a year in advance (per The Wall Street Journal).

While the NFL might be in part motivated by trying to avoid a fall 2020 ratings dip courtesy of the upcoming U.S. elections, it’s also rushing to get ahead of what could be a limited pool of both suitors and resources when contracts start coming up in this decade’s coming years (something David Bloom’s previously discussed on TV[R]EV). As television content potentially gets even more fractured and less linear with streaming services popping up everywhere, it begs a real question about just how valuable these sports rights deals can be five or 10 years down the road with consumption habits changing so dramatically.

Streaming TV growth is explosive, as numerous studies show. But audience numbers for U.S. sports show potential future concerns, especially among younger viewers. Does that mean sports rights are able to cash in again with streaming services next time around? Or is this coming negotiation period one last shot at a major payday for these leagues?

The NFL’s at least trying to tweak the product it’s selling, in any case. As part of a new TV deal, we could see one additional regular season game per team (increasing from 16 to 17) and two additional playoff games — something currently being negotiated as part of what would be a new collective bargaining agreement between league owners and players. A proposed new playoff format would feature 14 teams out of 32, with seven teams per conference making the postseason: four division winners, plus three wildcards.

The top seed in each conference would receive a bye, leaving the rest to play in a wild card round. Under the current format, the top two seeds in each conference receive byes, so this puts an additional premium on earning the top record — something that looks a lot like what MLB floated as an idea just a week ago (though this time, without the made-for-TV selection show). Among both players and fans, the biggest concern with any postseason expansion is diluting the value of the regular season. At least in both cases, there’s potentially a premium on regular season success (in the form of top seeds getting byes) — even if a larger playoff field gives more teams a mathematic shot to win it all.

While proposed changes for the NFL aren’t as explicitly TV-focused as what MLB’s tossed out, there are still details that are very much a product of wanting the most compelling product to sell to the most people. An additional 16 regular season games plus two playoff games are worth many millions of dollars more per year, and the added postseason matchups also keep more fan bases engaged later in the league calendar.

The NBA’s proposed its own tweaks even without a new TV deal being discussed yet; considering tournaments both in the middle and at the end of the regular season. And whether those changes ever happen or not, it’s a clear signal that sports leagues are at least thinking hard about how to keep the sky-high TV contracts around for as long as possible. They may not be able to affect changes in how audiences watch TV, but they can work to adapt and make the product as watchable as possible in accordance with those behaviors. For at least trying to do so, I’d say the leagues still have financially rewarding futures ahead on television.