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Summary:

Professional sports video is worth many billions of dollars — and the leagues are getting smarter about parcelling it out in small pieces to sell across different platforms.

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It’s a great time to be a sports baron: Witness, for instance, the Los Angeles Dodgers, who convinced Time Warner to pay at least $7 billion over the next 25 years for the honor of broadcasting their last-place team. Better yet for the owners of the Dodgers and other sports teams, there are now more ways than ever to get money for the valuable video their players create.

The latest example is a $1 billion deal that gives Verizon the right to stream NFL games to subscribers’ smartphones. The partnership, which covers phones but not tablets, shows how pro football is able to cut separate “exclusive” deals for various platforms, while also charging cable and broadcast networks for different time slots (in 2011, ESPN paid $15 billion for Monday Night – which now looks like a bargain).

And, increasingly, the sports leagues are finding new platforms not only for live games, but for their secondary content as well. The leagues, for instance, are granting licensing rights to companies like Sporting News and NDN to distribute highlights and post-game interviews to the websites of news sites like the New York Times and USA Today. As it becomes easier and cheaper to make web video, such clips appear set to become once more valuable tranche of media revenue for the leagues (there’s also radio, video games and so on).

The deals are valuable to the licensors because they can sell video ads against the highlights, splitting the revenue with the publishers. Here an image of the Sporting News’ video player on the sports section of the Times’ site (it’s a screenshot so don’t bother clicking — if you want to goof-off, Deadspin is here) :

Screenshot Sporting News on Times

As the price for acquiring league sports rights keeps soaring upwards, publishers are meanwhile creating more original sports content that they can monetize without having to license. Sports Illustrated, for instance, this week launched a regular live 30 minute video show to go with the 50 or so original pieces of content it assembles.

Sporting News, which became a digital sports giant through a recent merger, likewise announced last month that it would be introducing new original video “shows” (which are more like 5 minute clips), including one that will star retired quarterback Troy Aikman. According to CEO, Juan Delgado, the video network’s reach is comparable to that of a major market team from New York or LA.

The bottom line is that in an era where most U.S. states have decided to make their state university’s football coach their highest paid employee (I mean who wants to squander tax dollars on silly stuff like kindergardens?), the money gusher for sports video is not going to turn off anytime soon.

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  1. Stanford Crane Friday, June 7, 2013

    Too bad none of the geniuses in venture capital and put two and two together, with the exception of Causeway Media, a new fund. Crossing the Chasm is important for both investors and producers. Sports on TV represents 1.3% of programming and 23% of ad revenues, according to Nielsen. Hello!

  2. albertojgarrido Friday, June 7, 2013

    Never heard of NDN but I looked them up – http://www.newsinc.com – and seem to be a rising star in this space. They apparently don’t just do sports but all sorts of news and content.

  3. CineSport is the other player with NDN and Perform but CineSport produces video with its publishers and provides technology to easily embed video in articles. As a local media web site, CineSport provides us with the best solution to create video with our reporters and a video platform that makes it easy to embed video throughout our site.

  4. edmundsingleton Monday, June 10, 2013

    Just how smart are they? They figured out a way to get me to pay $2.00 a month as a DirecTV subscriber who hate sports and would never watch one second of sports…

  5. I subscribe to MLB.com Premium TV. I live in Houston yet get backed-out of games in Dallas about 240 miles away or 5 hours by car. On Saturdays and Sundays MLB blacks out certain games that our even further away from me. For instance, they blacked-out Saturdays day game between the Cardinals and Reds which was played in Cincinnati which is 1049 miles from Houston. Their policy is to black-out selected games between certain hours on weekends. Don’t know the reason but will bet the farm it has something to do with money and advertising. MLB.com will not broadcast commercials between innings, I don’t care, but will bet the other farm it has to do with money. I think Congress needs to take a hard look at the anti-trust exemption Major League Baseball was given in 1922.

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