Sports Media Watch offers thoughts on recent events in the industry, including the future of TNT Sports under David Zaslav.
The Zaslav gambit
Warner Bros. Discovery CEO David Zaslav has been increasingly vocal in touting the company’s approach to live sports. At an investor conference last week, he most notably said that WBD losing its NBA rights was a “great decision.” If nothing else, Zaslav has been consistent. He opened negotiations saying that WBD did not “have to have” the NBA, and while WBD certainly made an argument to the contrary in its lawsuit against the league, there is no reason to believe he ever genuinely moved off of that stance.
The end of the NBA deal, and the pickups WBD has made in its wake, are indicative of a particular approach that may well qualify as a philosophy. Every company reaches a point where the acquisition of additional rights is no longer feasible, as even ESPN is poised to relinquish rights to Formula 1 and Major League Baseball because of their respective price tags. Companies like Fox and CBS sit out major negotiations all the time. Yet with Zaslav, who until Discovery merged with what was then WarnerMedia was an outsider in the North American sports scene, one gets the impression that WBD is not acting out of necessity but with a genuine belief in the fiscally-responsible strategy that decimated CBS Sports in the 1990s and NBC Sports in the early 2000s.
“We’re not going to pay more than we think we can afford or we can make money on,” Zaslav reportedly said at the conference. “We’d rather invest. If we saved a huge amount of money by not doing the NBA, it’s more money that we could spend on the quality content that we can make global, that we think can strategically help us.”
He previously said in an earnings call that the new WBD NBA deal, which is the result of its settlement with the league, “is really going to work for us” as it will focus primarily on highlights rather than live game inventory that he said is less appealing to younger generations.
The overarching sentiment is that for WBD, big rights deals like the multibillion/year NBA contract are out. If WBD needs live sports, and it does not necessarily need live sports, it can be selective without harming its long-term outlook. He has at least some early evidence on his side; WBD was not forced to accept a lower rate for TNT in its most recent carriage deals, and its stock price has risen nearly 20 percent over the past year.
WBD is able to pick and choose its spots largely because it remains a player on the big stage by way of its deals with the NHL and Major League Baseball. Even with the loss of the NBA, it will continue to carry two of the “Big Four” sports leagues through 2028 — but retaining those properties will be easier said than done.
To begin with, MLB commissioner Rob Manfred already laid down the gauntlet against cable television in his broadside against ESPN last month. While executives go back on their word all the time, nothing in Manfred’s memo to owners about ESPN would indicate that the league is looking for another cable deal. Perhaps MLB will re-sign with WBD in a streaming heavy deal that puts games primarily on Max — akin to what WBD’s NBA deal would have been had it won its legal challenge against Amazon — but if MLB is going to go with a streaming-first package, Amazon and Netflix would seem to make more sense.
At the very least, it seems unlikely that WBD will be able to re-sign with MLB on similar terms as under the current deal, which was originally struck in 2006 and renewed twice in 2014 and 2021.
As for the NHL, there is no reason to believe Gary Bettman and company could possibly be dissatisfied with WBD, which has revitalized a staid studio space that used to be defined by the glowering Mike Milbury. Nevertheless, the ratings are an issue — and TNT just is not delivering on the biggest events in the way that compares to ESPN/ABC.
Other than the 2023 game between Pittsburgh and Boston, the Winter Classic has fallen off sharply since moving to TNT, including just 920,000 for this year’s edition. One cannot simply blame cable, as ESPN drew a much healthier 1.6 million for a Stadium Series game earlier this month. The lone Stanley Cup Final on TNT thus far, a low-quality mismatch between Florida and Vegas two years ago, was the least-watched since 2007, excluding the two COVID-affected seasons. It is hard to imagine the NHL will want to continue to put the Cup Final exclusively on TNT.
Of course, the above neglects perhaps the most important factor. Even if MLB and the NHL were interested in a renewal, would David Zaslav be willing to pay the price?
The COVID anniversary
Tuesday marks the five-year anniversary of the NBA suspending its season the night Rudy Gobert tested positive for COVID-19, a day that is a pivot point in American society far beyond sports television. March 11, 2020, began with news that the NCAA basketball tournaments would be played without fans in attendance, and that was surreal enough. By the end of the night, the uneasy atmosphere during the delay of Jazz-Thunder made clear that an already unthinkable year — Kobe Bryant’s death having occurred just six weeks earlier — was only just getting started.
(On a personal level, yours truly just happened to have booked J.A. Adande as a guest speaker in a sports journalism class that day. Adande, who perhaps appropriately appeared via Zoom, proceeded to lay out almost exactly what would happen over the coming months, at a time when the worst case still seemed hard to fathom.)
With the exception of the NFL, the sports world is still in recovery mode after the wave of cancellations and postponements that resulted from that day. Recall that there were several sports weekends in the spring of 2020 in which all of the programming on the “Big Four” networks consisted of years-old replays. NASCAR iRacing was considered a hit. There was an NBA Horse Challenge from players’ driveways. The ESPN Michael Jordan hagiography “The Last Dance” would have been a big draw no matter what — it was originally set to air during off days in the NBA Finals — but became a blockbuster hit for an ESPN that was otherwise airing nothing of note.
When sports returned, the feeling was just ‘off.’ There were no fans in the stands, though FOX generated some PlayStation 2-quality simulations for its Major League Baseball coverage. Some leagues hid the lack of fans better than others — one wonders why the NHL had its colorful video boards placed high enough that they were not visible during live play — but the atmosphere was simply too spartan not to notice. For the first games back, one was simply grateful to have live games (the NBA’s “seeding games,” at least for this writer, remain a positive memory). Yet that feeling wore off over time, and all that was left were empty arenas played on neutral surfaces.
The social tumult that began in late May of that year was another factor. There had been growing activism in sports dating back to the Miami Heat wearing hoodies in tribute to Trayvon Martin, but it became all-encompassing in the summer of 2020. Between those who abhorred the players taking social stances, and those who believed that sports was a trivial distraction from what really mattered, it was boom times for those who resented the games and the players.
Add to all of that the fact that 2020 was an election year, and one had the recipe for a dropoff in ratings that was dramatic. Early in the COVID shutdown, there was a commonly-expressed view that when sports returned, the ratings would be off-the-charts. Indeed they were, just not in the direction that had been expected.
The NBA Finals got the most attention because NBA ratings tend to generate the most engagement, but 2020 produced the least-watched NBA Finals, World Series (until 2023), Kentucky Derby, Indy 500 and final round of the Masters on record. (It would have produced the least-watched Stanley Cup Final, if not for Ducks-Senators plumbing the depths in 2007.)
There was no reprieve in 2021, as the college football title game was the least-watched in the BCS/CFP era (since surpassed by Georgia 65, TCU 7). The Super Bowl, despite a matchup of Tom Brady and Patrick Mahomes, not only failed to average 100 million viewers, it was the first since 1969 with less than a 40 rating. The Daytona 500 followed with its own record low — though a rain-delay played a big role — and the off-year Tokyo Olympics put a capstone on a year of decline as the least-watched ever in primetime.
Outside of the NFL, which is thriving, the recovery in the years since has been uneven. Between the NBA Finals, World Series, Stanley Cup, Men’s Final Four, NASCAR and major golf, none has averaged as large an audience — even once — from 2020-25 as the top telecast in 2019. That is despite the addition of Nielsen out-of-home viewing, which the measurement company began incorporating in its viewership estimates in August 2020.
Oddly enough, attendance seems to be fine in all respects, or at least largely unchanged. Who would have thought in the height of 2020, when all sports became TV-only affairs, that it would be viewership that remained stubbornly low amidst a recovery in attendance?
Given the state of the world, it is hard to think that another COVID-style disaster is off the table. The industry went from a six-day blackout after 9/11 to a four-month blackout after COVID. One hesitates to imagine the length of the next pause.
