Last week, right as the world was preparing for the Super Bowl, three legacy TV networks stunned the American sporting world. Disney (owner of ESPN), Fox (owner of Fox Sports) and Warner Bros Discovery (owner of TNT Sports) announced they would be launching a joint sports-only streaming service.
These three companies had been discussing the project in secret and America’s major sporting leagues – NFL, NBA and MLB – were only informed right before the public.
Why is this such a big deal? Together, these three companies own 55% of American sports rights. And the skyrocketing value of these rights have been a big reason why sports leagues are enjoying record profits and sports teams are selling for record prices.
This is the TV networks striking back.
To illustrate the state of TV rights deals, look at the NBA which is currently negotiating its next TV rights deal. In 2014, the NBA signed a 10 year, $24 billion deal. Reports are the league wants $75 billion for its next 10 year deal.
Live sports is the most valuable asset in entertainment. It has kept free-to-air and cable TV relevant well into the streaming era. Now, as the streamers start trying to get into live sports (for example, Apple bought the rights to Major League Soccer and Amazon bought the rights to Thursday Night Football) the legacy cable TV players are looking to flex their muscle.
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