We’ve assembled an all-star lineup for our Media Innovators conference in New York at the end of the month: Jimmy Pitaro, Mark Lazarus, Jay Marine, Rob Weisbord, Omar Raja. The details are here.
Adam Silver made headlines last week after speaking publicly about Kyrie Irving’s situation for the first time during an interview at SBJ’s Dealmakers conference in DC.
But it was Silver’s comments about the media industry that I found most interesting. The NBA commissioner painted a picture of a changing local media rights market — and a hot national media rights market. Silver didn’t mince words when I asked him about Sinclair. “Sinclair/Diamond Sports, there’s no doubt they’re in distress. You can just see what the debt is trading at.
It’s not just Sinclair. It is the whole RSN company, which has injected money into local teams for decades, which is suffering. “It’s not really working for anyone right now,” Silver said. “It clearly doesn’t work for RSNs, it doesn’t work for distributors. And most importantly, it doesn’t work for fans in those markets who want to see those games. »
Possible solutions include streaming games or, as Silver put it, “maybe TV will come back into the mix.”
Silver: “You now have a market problem where you had these traditional deals locked in as exclusives where to get those rights you had to subscribe to traditional cable and satellite. You are now seeing a huge number of consumers moving away of these traditional models, but they still want to obtain these sports rights but cannot obtain them at the moment with the existing model.
Silver warned that teams will feel “a bit of pain” in the short term. “But long term, the outlook is still incredibly good because we know fans want to consume this content.”
Looking to the future, Silver expects to see a customer base still watching local games via a traditional cable/satellite subscription. Other customers will pay to watch matches however they can (on a phone, for example) and wherever they are (on the go, perhaps). “Over time, there’s no doubt you’ll outgrow the number of fans who traditionally do that,” Silver said. “There are plenty of incredibly valuable houses that will continue to be willing to pay a real premium to secure these sports rights. It’s probably not exclusive as it was historically.
Over the past week, some of the biggest media and tech brands have announced plans to downsize, including Disney, Amazon and Meta.
Nervousness about the economy has has yet to have a big effect on the sports media industry. By all accounts, ad sales for the biggest events continue to pay off. But the cuts in traditional media companies will certainly affect the sports sector as well. Here are the ones to watch out for:
- Disney CEO Bob Chapek announced a hiring freeze and limited business travel, according to an internal memo he sent Friday afternoon. “During this evaluation process, we will review all operational and workforce opportunities to find cost savings, and we anticipate some staff reductions.” In his note, he did not specify how many jobs would be cut. He also gave no indication of where the cuts would be made. But it’s clear that Disney+’s lack of profitability is behind this decision and it seems likely that ESPN will be affected.
- NBC Sports laid off an unknown number of employees last week. An insider described the number of layoffs as low, largely occurring on the digital side. It emerged last month that NBCUniversal was considering voluntary early retirement offers as a way to cut costs and avoid bigger layoffs. The plan would extend the offer to employees over the age of 57, by The Hollywood Reporter.
Among “new” media entities, the cuts appear to be even greater after these companies have spent years rapidly increasing their staff:
- Last week, Meta began laying off 11,000 employees, or 13% of its workforce, including cuts that hit the group’s sports business. Meta also extended its hiring freeze through the first quarter and continued to cut spending. The cuts come as the company’s virtual reality and augmented reality businesses are losing billions of dollars a year, with no sign of profitability in sight.
- Amazon is in the process of laying off 10,000 employees, or about 3% of its corporate employees, by Karen Weise. Early signs suggest the sporting group is unlikely to be heavily affected. The group has grown rapidly due, in part, to its decision to exclusively feature “Thursday Night Football” this season. But it’s worth noting this quote, from Weise’s story, about the idea that Amazon’s e-commerce business is losing billions this year. “They have to review everything,” said John Blackledge, an analyst at Cowen & Co. “It’s just not sustainable.”
I found it tedious to funnel surfing from Amazon Prime to traditional linear TV channels. To access Amazon Prime, I have to click on the app, wait for it to load, then click on the game I want to see. To return to traditional linear TV, I have to quit the app.
On Nov. 3, in a rare NFL vs. World Series game where the same markets were playing in both games, new data from Nielsen shows a few people tried to channel the surf.
The Texans scored a touchdown on the team’s first down to take a 7-0 lead. Immediately after the touchdown, “Thursday Night Football” went on commercial break. It was at this exact moment that Fox saw its World Series viewership grow from 10.8 million viewers to 11.6 million viewers.
Fox saw another audience jump when the NFL game went to halftime. The World Series averaged 12.1 million just before halftime and jumped to 14.2 million during halftime. Many of those fans stuck with baseball.
We went deeper into Thursday numbers with Nielsen in this week’s SBJ.
- Ray Warren, the chairman of Telemundo Deportes, will retire at some point in early 2023, making the FIFA World Cup the last major event in his career which includes long stints at ABC, Raycom Sports and NBC RSN . Warren, who will spend the entire World Cup in Qatar, spoke with my colleague Alex Silverman about Telemundo projects.
- Fox Sports Radio began carrying “The Paulie & Tony Fusco Show”. The podcast features two former Colin Cowherd producers — Andrew Samson and Sharief Ali — who portray two die-hard Philadelphia sports fans.
- NASCAR has sought to reinvent its schedule to some extent to woo media companies, with formal talks set to begin next year on the sport’s next cycle, notes SBJ’s Adam Stern. NASCAR currently receives an average of $820 million per year from Fox and NBC.
- Amazon Prime Video averaged 6.8 million viewers for Falcons-Panthers in Week 10, marking the least-watched NFL game Thursday night since Jets-Broncos in Week 4 of the pandemic-hit 2020 season drew 5.4 million on NFL Network, notes SBJ’s Austin Karp. The audience this season continues to be younger, with 66% under the age of 55 and a median age of 46, eight years younger than the NFL average on linear television.
- Brendan “Coach Beard” Hunt (of “Ted Lasso” fame) and NBC Sports’ Rebecca Lowe will co-host a World Cup-related podcast for Apple News called “After the Whistle.” Apple will produce the pod in partnership with Meadowlark Media. The first episode is November 17.
- Washington Post editor Steven Ginsberg will lead The Athletic, by Max Tani of Semafor. “His appointment as head of Athletic comes at a crucial time for the sports-focused news organization, which has been a source of drama within the Times corporation.”
- Warner Bros. Discovery has started telling GolfTV subscribers that it will shut down the streaming service next month. The service’s live coverage will be moved to the Discovery+ or Eurosport digital platforms.
- Please join me tomorrow as I moderate the 17th Annual Povich Symposium at my alma mater, the University of Maryland. The panel includes top journalists Christine Brennan, Mike Preston and Ken Rosenthal alongside the athletes they cover: Katie Ledecky, Torrey Smith and Mike Bordick.