Sports Media Watch presents thoughts on recent events in the industry, starting with a follow-up on the resilient cable model.
When asked by Bryan Curtis of The Ringer Monday morning how he would describe ESPN, the network’s president Jimmy Pitaro responded with one word: “Multiplatform.”
“We are not just a network,” he added. “Oftentimes, we are referred to as ESPN, the network, but we’ve been investing in digital for decades, and it long predates me.”
ESPN transcending the bonds of ‘network’ is very much in keeping with the broader narrative of an industry transitioning away from its analog origins. “We are still very much invested in the traditional ecosystem,” Pitaro continued, “and that cuts across broadcast and cable and all of our cable channels.” But it was ESPN’s digital success that occupied the rest of his answer, from ESPN.com to the ESPN app, to ESPN+ and the new DTC app, to Tiktok and Instagram.
It is not hard to understand why digital would so easily overshadow linear. Cable is in terminal decline and streaming is clearly where the audience is headed. Streamers have fully become major players in media rights negotiations, picking up properties that would have been unthinkable less than a decade ago — exclusive NFL regular season and playoff games, a full NBA package, the Women’s World Cup.
It has been said many times, many ways, that the end of cable is nigh. That may be so. But as this column has argued previously, reports of the bundle’s death may be premature — if not necessarily exaggerated — and one need only read between the recent headlines for the evidence.
Start with ESPN acquiring NFL Network, and reportedly extending the league-branded channel’s slate of exclusive games through 2032. Of all the cable sports channels, it is the league, conference or team-specific networks that are the most vulnerable. They are in the fewest homes and they attract smaller audiences than their generalist counterparts. Nevertheless, here is Disney not just agreeing to run NFL Network — as Warner Bros. Discovery has done for NBA TV — but purchasing it outright.
Go back a few weeks to the surprise report in The Wall Street Journal that Comcast is considering the launch of a new cable sports network to simulcast events exclusively carried by Peacock. A new cable sports network, in an era when media companies are spinning off or shutting down channels with decades of history. Moreover, a new cable sports network that will take exclusive direct-to-subscriber content and place it back in the bundle.
Or take a look at the past year or so of bruising carriage negotiations, which have in some cases resulted in direct-to-subscriber streaming services like ESPN+ and Peacock being included in cable tiers at no additional cost to the consumer. Add to that the sport-specific ‘skinny bundles’ now offered by the likes of DIRECTV following the successful stymieing of Venu.
Finally, consider the rebundling of sports content in the streaming space, which is showing signs of beginning in earnest. The announcement Monday that Disney and Fox plan to bundle their new ESPN and Fox One streaming services for a discounted price is unlikely to be the last one, and Pitaro told The Ringer that the company is open to incorporating third-party content into its new app. A direct-to-subscriber streaming service that ends up carrying content from various other companies would simply be a vMVPD, would it not?
Taken in total, these stories are a reminder that this is an industry in transition, not an industry that has left the past behind. Linear television and the cable bundle in particular are still important elements of the mix. And it is far from clear how different an approach the industry will take when the age of streaming has fully dawned.
One need only listen to the executives. “This collaboration reflects our shared commitment to delivering premium experiences across platforms and meeting consumers where they are — anytime, anywhere,” Disney EVP/platform distribution Sean Breen said of the ESPN-Fox One bundle.
“[W]e continue to look for opportunities to streamline the user experience, especially for the ultimate sports fan,” Fox DTC SVP/strategy and business development Tony Biletter said in the same release.
Meeting people where they are? The people who decimated the cable bundle are by and large not sports fans. In fact, it is sports fans who are the ones still clinging to said bundle. If one is going to meet Joe or Jo sports fan where he or she is, that is still cable — or the digital facsimile of YouTube TV et al.
Streamlining the user experience? Was anything more streamlined than having ESPN, TNT and FS1 a few channels away from each other in the bundle, rather than in separate apps?
Yes, the bundle is prohibitively expensive. It does not fit with the preferences of young audiences, whose media consumption is almost entirely app based — and not even the likes of Netflix or Prime Video, but YouTube and Tiktok. It is in prolonged terminal decline.
But it is a model that still works for a sufficiently high number of sports fans to make it economically viable for the networks at a level that direct-to-subscriber streaming has yet to reach.
“We are perfectly comfortable with the sports fan remaining in the traditional ecosystem,” Pitaro said on The Ringer podcast. “That’s a business that’s been very, very good to us. And we expect it will continue to be good to us.”
It is the fan “sitting on the sidelines” that ESPN hopes to reach with the new app, Pitaro added. The network does not expect — or want — viewers to “cut the cord, cancel their digital MVPD subscription and move over to our direct-to-consumer offering.” Streaming, for all the ballyhoo, would just be supplementary to the bundle.
Ultimately, it says something that the cable bundle has been so resilient — perhaps even, at the risk of overstatement, a bit resurgent — amidst a decline in subscribers that is approaching worse-case projections.
Perhaps it says that the bundle was uniquely suited to sports, such that the last subscribers left will inevitably be avid sports viewers. Perhaps it says that the bundle is the ideal system for distributing live, exclusive content that is spread across multiple platforms.
Perhaps it even says that a la carte has always been better in theory than in reality, and that it remains to be seen whether the industry can build a sustainable business on the backs of fans who are presently “sitting on the sidelines.”
But it surely says something that despite an apparent eagerness to part ways with the musty old cable model, the industry still finds itself unable to fully cut the cord.
Plus: UFC media rights, Netflix strategy, ESPN journalism
The new UFC media rights deal, announced Monday, marks a surprising change in strategy for the mixed martial arts property. Yes, Paramount+ will stream every event, just as ESPN+ does in the current deal. But the numbered events that under the current contract are streaming-exclusive PPVs will all be available for the cost of a Paramount+ base subscription — and in some cases will be simulcast on the CBS broadcast network.
The biggest events in the sport once required a sizable fee on top of a monthly subscription. Now, in at least some cases, they will merely require an antenna. This is still a streaming-focused deal, but that is a notable shift.
The Netflix strategy of picking off certain ‘event’ programming figures to transform the media rights game. For those properties untethered by a full season of inventory, from individual holiday games to certain tournaments, Netflix will be a legitimate and potentially high-priced option. Who would have ever thought about selling the Home Run Derby standalone as a one-off property?
The news reported by John Ourand last week — that Netflix outbid ESPN, CBS and Warner Bros. Discovery in a failed quest for USGA rights — is a sign of where this may be headed. If you have a singular event that lasts a day, a weekend, or even a couple of weeks, Netflix may be on line one.
The real question is how selective the streamer will be. Could it go after something like The Preakness Stakes, the middle leg of horse racing’s Triple Crown? Or would it only want something the stature of a Kentucky Derby?
It is fair to say that ESPN reporter Don Van Natta does not appreciate the insinuation that ESPN is going soft on NFL coverage. Dan Patrick said on his radio show last week that the NFL’s equity stake in ESPN would not meaningfully change the network’s coverage of the league because it could not “be any further in bed with the NFL” than it already is. Patrick: “Are they going to look the other way with whatever negative story that comes up? They’ve probably already done that.”
Patrick also suggested that ESPN had not been as aggressive in covering the tumult at the NFLPA as Mike Florio of Pro Football Talk. These comments prompted Van Natta to upbraid Patrick on social media.
This same column last week made a few of the same points that Patrick did, and out of fairness to Van Natta and the rest of ESPN’s reporters, it should be noted that ESPN did publish a series of articles that resulted in the resignation of NFLPA executive director Lloyd Howell — the story was not, in fact, the exclusive domain of Florio and Pablo Torre — and that ESPN has reported any number of negative stories about the inner workings of the NFL in the recent past, including sordid scandals like a Cowboys executive accused of spying on cheerleaders.
The answer to question posed in this column — “one might ask when the last time was that ESPN broke a story that made the NFL look bad” — is more recently than one might have thought.
