Key Takeaways

• Over the past two weeks, there has been a flurry of deals and developments in sports streaming 
  
• But, streaming is not (yet) a one-to-one replacement for linear distribution of sports broadcasts
  
• The flurry of recent streaming deals suggest it may never be
  

• This has implications for both recent sports streaming deals and recent speculation on ESPN's future in sports betting

Over the past two weeks, there has been a flurry of deals and developments in the sports streaming marketplace:

• WarnerMedia reached an eight-year agreement - reportedly worth ~$200MM - for all non-World Cup and CONCACAF US Women's and Mens' national team games to be distributed on WarnerMedia’s streaming service, HBO Max, while the biggest games will also air on TNT.
  
• Apple will have exclusive rights to telecast two “Friday Night Baseball” games each week — totaling about 50 per year — in the U.S. and to eight countries overseas, via its Apple TV Plus (worth $85MM)
• MLB also has a two-year streaming deal with Comcast’s NBCUniversal for an 18-game package of games each season that will be on Peacock’s premium tier and will be exclusive (worth $30MM)
• Apple is considering acquiring the rights to the NFL's Sunday Ticket package, the rights to mobile device livestreaming and an equity stake in NFL Media),
  
• WarnerMedia could pursue rights to stream NBA games on HBO Max, and
• Sports Business Journal's John Ourand delivered an "inside look" at the NBA’s streaming deal with Sinclair

The tempting conclusion is that we are witnessing a significant shift in live sports distribution as Apple, Comcast and WarnerMedia join Amazon and Disney in streaming sports.

But, there remains the "interesting question" of "what the value of sports IP is to streaming", which I raised in Amazon, MGM, and How Lina Khan's FTC Misunderstands the Value of IP in Streaming. I concluded that because sports IP does not (yet) drive viewership at a scale that competes with linear, it instead may be more valuable for driving paid subscriptions.

In other words, streaming is not (yet) a one-to-one replacement for linear distribution of sports broadcasts, and is more valuable as a customer acquisition tactic. A favorite quote of mine from NBA owner Mark Cuban - given in an interview with SportsTechie in April 2020 - suggests it may not ever be a replacement for linear:

One of things that’s changed dramatically in terms of making our games available is that we’ve gone from a bandwidth-constrained environment on paid TV to a non-bandwidth-constrained environment. … With the Mavericks, we’re having conversations: Can we have three, four, five streams of the same game that’s going on traditional TV? You might have one where you have Twitch-like announcers; you might have two of your favorite YouTubers that are doing another stream; you might have your traditional broadcasters doing another stream; you might have a players-only doing another stream. We don’t care if there’s four, five, six streams—we care about the aggregate audience. By setting the priority of being an aggregate audience, then we can do things to experiment and try a lot of different things. 

Then there’s the element of gambling. You can have a gamblers feed where it’s geared toward the prop bets going on right now. That might be an element for paid TV that’s kind of a salvation. One of the problems with streaming is that you don’t know what’s going to buffer or when, and you don’t know if everybody is getting the feed at the same time. There’s a delta between a satellite feed and a cable feed and even a good stream—and that’s an issue for gambling on some level, maybe 5G changes that with low latency. But there’s a unique opportunity to juice up paid-TV subscriptions and get gamblers in particular say, ‘There’s this unique paid-TV feed that’s geared toward prop bets, gambling, so I know what’s happening.’

Effectively, Cuban is making two points:

1. Streaming has enabled the concept of "aggregate audience" across "four, five six streams", and that should be a team's priority in broadcast; and,
2. The growth of sports betting may counterintuitively save the pay-TV business from disruption of streaming.

They highlight the inherent uncertainty in sports distribution: Audiences no longer have a single solution for watching live sports, but linearr remains the dominant consumer behavior in the cord-cutting era. 

If we look at the above six stories through the perspective of these two points, the uncertainty in sports distribution that Mark Cuban highlighted two years ago remains true, if not worse.

[Author's Note: The rest of this essay will be exclusive to members, only.]

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