In Q1 2023, PARQOR will be focusing on four trends. This essay focuses on "Media companies have millions of consumer credit cards on file. What happens next?” and "The definition of scarcity is continuously evolving away from linear. What happens next?"
Author's Note: Next week I will get to writing essays and posting on the Slack more regularly. I am currently playing catch-up after the holiday weekend.
If you are on the free tier and are interested in testing the PARQOR Private Slack with me, please respond to this email.
Last March, there was a flurry of deals and developments in sports streaming, but I observed then a looming uncertainty as to where the marketplace seemed headed, and concluded, “now fans must navigate an emerging maze of options that muddle whether a game is being broadcast on linear or streaming, and if/how they have access to that broadcast.” [NOTE: A reminder that I have learned not to focus too much on sports streaming primarily because “streaming has made sports distribution deals highly technical and somewhat convoluted."]
Last December, former NBA executives John Kosner and Ed Desser argued in Sports Business Journal that the sports media business “reached its point of no return” or “Rubicon” when Amazon Prime’s streaming service delivered 15 million viewers for an exclusive NFL game. They added, “As a result of this Amazon revolution, sports fans who were once largely anonymous — with no direct relationship with the broadcaster, league or team — are suddenly, continuously and personally connected.”
Both are important precedents to what is now transpiring with Diamond Sports Group — the outside entity Sinclair formed to hold TV rights to regional sports games from the NBA, NHL and MLB. It is currently in a 30-day grace period which “most observers expect will lead to a Chapter 11 bankruptcy filing.” Any outcome that forces the RSNs out of business results in an “axiomatic” problem best summarized by Sportico’s Anthony Crupi: “As local fandom is the lifeblood of American sports, the leagues cannot abide a disruption in the transmission of their live games.”
The post-RSN world challenge of aggregating and keeping local fans “suddenly, continuously and personally connected” in DTC streaming and at scale seems impossible for MLB, NBA & NHL to do on their own.
Total words: 1,700
Total time reading: 7 minutes
Since we are at “a point of no return”, it is worth asking what leagues can do. An outcome where they figure out DTC would imply two things: