This past Monday night, instead of the NCAA men’s basketball national championship, the CBS broadcast network aired two hours of the sitcom “The Neighborhood” and an episode of its procedural “CIA.” Broadcast television missed out on one of the biggest nights of sports television, as it has almost every-other-year for a decade.
The beneficiary was of course cable, just as on that Monday night in January when college football’s national champion was crowned on ESPN instead of ABC.
That the national champions of college football and men’s college basketball would be crowned on cable television would have been unfathomable 25 years ago, but became trendy not long after, fueled by an NBA media rights deal in 2002 that shifted most of the league’s broadcast television inventory to ESPN and TNT. Even as NBA ratings took a pronounced hit in the aftermath, property after property followed in the league’s footsteps, culminating in ESPN acquiring exclusive rights to the Bowl Championship Series and Turner Sports getting half of the NCAA men’s basketball tournament.
That shift to cable has quickly become an outdated relic of a different time in the industry, and as cable distribution has declined, broadcast television has been one of the beneficiaries. Another has been direct-to-subscriber streaming. And as the industry moves forward into a new era, it is increasingly clear that at least some of the same companies that benefited from the shift of sporting events from broadcast to cable now regard streaming as a grave threat.
It may seem a bit incongruous that now, of all times, is when the federal government has taken an interest in protecting the cause of sports on broadcast television. With the notable exception of the NFL, pretty much every major sports TV property curtailed its broadcast television presence from the NBA’s aforementioned media rights deal in 2002 to the NHL’s deals with ESPN and then-Warner Media in 2021. The NBA conference finals, MLB League Championship Series, BCS (and its successor the College Football Playoff), NCAA Men’s Final Four and National Championship, and the Stanley Cup Final are just some of the events that aired exclusively on cable (some every year, some every-other year) during that period.
But the recent trend has been in the other direction. “Sunday Night Baseball” makes its NBC debut this weekend. In May, an entire NBA conference final will air on broadcast (also NBC) for the first time since 1999. In June, the Stanley Cup Final will air exclusively on broadcast (ABC) for just the third time (though cable gets it again next year). Next year, college football’s national championship will air on ABC for the first time since 2010. And if Paramount succeeds in its attempt to acquire Warner Bros. Discovery, it would not be at all surprising to see the Men’s Final Four and title game move back to CBS full-time (assuming it is contractually feasible).
The new NBA and MLB rights deals alone account for a dramatic increase in major sports programming on broadcast television, thanks largely to NBCUniversal. The NBA aired its 62nd and final regular season window on broadcast television Tuesday night on NBC. Last year, there were 19 (all on ABC). MLB had three broadcast network windows in its Opening Week and is set for 47 total across FOX, NBC and ABC. Last year, there were 26 (all on FOX). Combined, that is nearly 110 broadcast TV windows before either league hits its postseason, compared to 45 a year ago.
And for as much scrutiny as the NFL has received over the number of deals and games it has struck with streamers, there were only 21 last season total across Prime Video (17), Netflix (two), Peacock (one) and Prime Video (one). By comparison, there were 107 windows on broadcast television across the regular season and playoffs, with CBS, NBC and FOX each carrying more games individually than the streamers did combined.
So the idea that broadcast TV sports is under imminent threat does not seem to mesh with the reality. And yet, not only is the federal government looking into the matter, but one of the biggest sports broadcasters is encouraging the effort.
Fox Corporation submitted a public comment to the FCC late last month in support of the agency examining whether the protections of the 1961 SBA apply beyond broadcast television. “Where the relationship between sports leagues and broadcasters has proven to have substantial pro-consumer benefit, such as free, over-the-air sports and local news, an exemption makes obvious sense,” it wrote. “But it is less clear that it should apply to negotiations with businesses — such as paywalled streamers — that benefit significantly already from a lack of a similar regulatory framework, or from any public interest obligations.”
The letter went on to celebrate the relationship of sports and broadcast television, touting the impact of live sports on sustaining local broadcast stations’ other operations — “local news, weather, lifestyle and emergency programming on which communities rely” — as “existential,” with that word underlined.
It is a religion that FOX would seem to have recently discovered, considering the sheer number of live sporting events — including the bulk of its Major League Baseball Postseason inventory — that air each year on cable network FS1.
Indeed, what has yet to be explained amid the concern about safeguarding broadcast television is why direct-to-subscriber streaming is seen as competing with — and detracting from — broadcast rather than cable. Direct-to-subscriber streaming has largely supplanted cable, not broadcast, in sports rights deals. As a result, leagues’ deals with streamers have in no way prevented them from ramping up their broadcast television inventory, and to the contrary, have largely occurred as said inventory has risen to a level not seen in more than two decades.
On the opening weekend of the NBA Playoffs later this month, three games will air solely on direct-to-subscriber streaming, a first for the league’s postseason. But five will air on broadcast television, the most on any weekend of the playoffs since 2002. Cable will have none.
The streamers have by and large obtained cable-level packages. None have acquired rights to a championship event. Prime Video next season will carry a full NBA conference final, and will do so every-other-year for the life of the NBA’s media rights deals, but that is no different than TNT or ESPN the past two decades. Prime Video has rights to one NFL game on Wild Card weekend each season for the life of its NFL deal, which is no further than cable ever reached into the league’s postseason picture (albeit only one time). Peacock will have streaming-exclusive baseball playoff games in the Wild Card Series, but that is quaint compared to LCS games airing on FS1 (or even Division Series games airing on MLB Network a few years ago).
There is little one can say about direct-to-subscriber streaming that one cannot say about cable. In its letter, Fox wrote of streamers “supplanting broadcasters entirely with paywalled games owned by relatively unregulated Big Tech.” Take out the ‘Big Tech’ part and that is what cable has been doing for decades, including Fox Sports’ cable networks. The letter noted that streamers face none of the public interest obligations that broadcast networks deal with. Neither do cable networks, which are not regulated by the FCC.
Fox warned of “devastating consequences for consumers and broadcast stations alike” if streaming were to overtake broadcast television as the primary distribution model for live sports. “Moving more sports behind paywalls would increase consumer costs, price some consumers out of watching, and keep others in the dark in areas where games featuring favorite teams would no longer be available.” With decades of rising costs and not-infrequent blackouts, cable already reached that point years ago — and in so doing, created the opening for the rise of streaming in the first place.
The same holds when discussing viewership. Fox, whose researcher Michael Mulvihill regularly circulates unflattering information about NBA viewership despite the network having rights to exactly zero NBA games, noted in its letter that a Hornets-Spurs NBA game on Prime Video last month averaged fewer viewers than a Bassmasters Classic event on its broadcast network (citing Mulvihill) — a characteristic dig at two favorite targets, streamers and the NBA.
But that Bassmasters event, at 502,000 viewers, comfortably surpassed last year’s regular season Major League Baseball average audience on FS1 (322K), the average audience for men’s college basketball this past regular season on FS1 (234K), and even the average audience for college football games on FS1 last fall (465K).
If one is sacrificing viewership by moving games to streaming, that ground had already been laid by companies like Fox trying to grow their cable networks. (And in a comparison one is unlikely to see on Mulvihill’s social media feed, Prime Video’s NBA audience this past weekend outpaced the FOX broadcast network’s ‘College Basketball Crown’ semifinals by 19% Saturday afternoon.)
So what is really at stake here? The sudden rediscovery of broadcast television’s importance does not neatly fit with the past two decades of standard practice in the media business. For all of its paeans to the consumer, to localism, to the ‘public interest,’ Fox cut to the heart of the matter late in its letter.
[A]s deep-pocketed tech companies negotiate more aggressively with the leagues, bolstered by their regulatory advantages and in some cases their massive, non-media assets, it will become increasingly difficult for ‘broadcasters to compete for sports rights and the advertising revenue that supports them.’ As streamers acquire sports rights and the costs of those rights increase, stations will become starved for cash, as networks must either pay more for sports content or lose their rights entirely.
For Fox, faced with the potentially massive expense of a mid-cycle rights fee hike from the NFL, and then the inevitability of having to compete with streamers on the open market in four years if it does not lock up those rights now, the main concern is financial. Fox understood that money talks when it muscled CBS out of the NFC package three decades ago — changing television forever in the process — and now wants no part of a landscape where it is the long-tenured broadcast network and the streamers are the big-moneyed upstart.
Now, instead of outbidding the competition, Fox is left to resort to using perhaps its only real leverage, appealing for government regulators to intervene. Given the economic ideologies the company has espoused across the board for its entire existence, that is the very quintessence of ‘desperate times call for desperate measures.’
