There hasn’t been a fight like this since the peak of the Yankees-Red Sox rivalry in 2004.
Amazon Prime has secured the rights to Thursday Night Football, replacing Fox and NFL Network. YouTube has nabbed Sunday Ticket, or out-of-market NFL games on Sundays, from DirecTV’s 30-year reach. And Apple secured exclusive rights to Friday Night Baseball and Major League Soccer and, among other things, helped convince superstar player Lionel Messi to join Miami’s team to create blockbuster programming.
Live sports have become a key battleground in the streaming wars that will dominate the entertainment landscape for decades to come. It is one of the few remaining forms of entertainment that millions of people make time for in their increasingly busy schedules and pay top dollar for it.
To attract new subscribers and retain existing ones, the tech industry’s streaming giants are using their deep pockets to buy up exclusive rights to major professional sports. They’re going up against the cable and broadcast incumbents – ESPN, CBS, NBC and Fox, who have been pushing streaming for years but have only recently started moving the full court press to sports streaming now that it’s clear Won online. “Sports are absolutely crucial,” Bank of America analyst Jessica Reif Ehrlich tells Fortune.
The fight comes after more than a decade of consumers increasingly canceling their cable and satellite TV subscriptions in favor of streaming services. While some events will continue to be broadcast on traditional television, it is clear that the majority of live sports coverage will soon be on streaming.
Amazon has used its deep pockets to secure deals for a variety of professional sports. In addition to its $1 billion annual NFL contract, the company exclusively broadcasts some WNBA games and Europe’s premier soccer tournament, the Champions League. By adding sports to its streaming offering, Amazon hopes to attract new subscribers to Prime, its comprehensive e-commerce package. These subscribers are more likely to shop on Amazon and more frequently.
Meanwhile, Apple is using its war chest to hit a few home runs instead of hitting a few singles. Eddy Cue, who runs the company’s streaming business, said he wanted to buy rights to sports that have a global reach, rather than games that only appeal to a specific country or region. It’s unclear exactly how many subscribers the MLS deal added, but Messi’s first game in September brought 110,000 subscribers to Apple’s streaming service Apple TV+ in one day, the Wall Street Journal reported.
When deciding who to sell the soccer rights to, MLS executive Seth Bacon’s reaction reflects an eagerness to dominate sports streaming. “If you could name one company, we would have spoken to them about our media rights,” he tells Fortune. In the end, the iPhone maker offered the distribution, exposure, quality and marketing that the MLS was looking for. “They are the largest subscription seller in the world,” Bacon says. “Now it’s less about where we position ourselves in the media landscape and more about continually improving our offering.”
Apple and Amazon declined interview requests.
Meanwhile, Alphabet’s YouTube is pursuing a different strategy: “Providing a comprehensive offering to sports fans,” Jon Cruz, YouTube’s head of sports partnerships, tells Fortune. In addition to Sunday Ticket, it offers YouTube TV, a cable replacement that gives subscribers access to local games on ABC, CBS and more. Teams and leagues can share highlights and behind-the-scenes content through their YouTube channels, with creators providing commentary themselves. The company declined to share data about Sunday Ticket’s viewership or subscriber numbers. “It was a pretty big jump and different than some of the others we’ve done in the past,” Cruz said of buying the NFL rights. “But it comforts us to see the fan base [grow].”
Can old dogs learn new tricks?
Meanwhile, legacy media companies are scrambling to keep up with changing consumer behavior by trying to outbid digital-first companies for online sports rights. Despite heralding streaming as the future, they have been slow to transition sports viewing to online-only.
Part of the delay is due to internal politics and economics. The emphasis on streaming is a big money loser, at least in the short term, and also means they are cannibalizing their existing and profitable broadcast and cable businesses. “None of the traditional media companies are profitable in the streaming space, so esports is absolutely critical as they transition their businesses,” Reif Ehrlich tells Fortune. Exclusive sports rights in streaming can attract subscribers and major advertisers, which will help offset revenue lost from the cable TV exit.
Amazon and Apple have been aggressive in pursuing expensive sports rights, but traditional media companies have held their own, Reif Ehrlich said. Many broadcast games simultaneously on cable and streaming to reach a larger audience.
The parent companies behind Peacock (owned by NBC parent Comcast) and Paramount+ (owned by CBS parent Paramount Global) have taken a similar approach to simulcasting games and acquiring exclusive streaming rights. Both show NFL games on their television channels and streaming platforms. Peacock will exclusively broadcast the first NFL playoff game in January and Paramount+ is the only broadcaster of Premier League soccer games in Mexico and some Central American countries.
Max (owned by TBS and TNT parent company Warner Bros. Discovery) is in a similar position, but has taken a different approach. The company is planning an additional sports tier for its service later this year, which will cost an additional $9.99 per month and show the same games as its cable partners, including NBA, MLB and March Madness games. “Our colleagues are essentially giving away sports for free,” Warner Bros. Discovery sports chief JB Perrette told the Wall Street Journal. “That’s not the right model.”
ESPN recently signed new deals with the NHL and college football and basketball’s premier SEC conference after ending two of the industry’s longest-running media relationships. It rejected a rights extension for MLS and Big Ten football and basketball, ostensibly because it was unwilling to pay for non-exclusive soccer and the higher price tag that came with the college league. The move shows that ESPN isn’t afraid to cut ties with long-time partners to protect its profitability.
Disney, ESPN’s parent company, has largely separated the sports channel from its sister streaming service ESPN+, which has a handful of its own rights and rarely simulcasts the same programs as its cable partner. Executives agree that ESPN’s future doesn’t lie in linear television. “Delivering our flagship ESPN channels directly to the consumer is not a matter of if, but when,” Disney CEO Bob Iger said during an earnings call in August. Disney is looking for another company to take a minority stake in ESPN to support this launch, which is not expected until 2025 at the earliest.
Traditional media companies have different motivations than the tech sharks who are new to the game. According to Reif Ehrlich, they generate revenue from ads and subscriptions and therefore require full, year-round sports plans to make money. “That’s why the NBA and football are critically important,” she says, because they fill programming slots most of the year and attract big advertisers.
The NBA’s rights will be the subject of the next high-profile sports rights battle. The league’s existing deal with Disney and Warner Bros. Discovery expires at the end of the 2025 season and nearly every major media player has reportedly expressed interest.
Yet one powerhouse – Netflix – remains on the sidelines. Although the company has reportedly been in discussions with sports leagues about acquiring rights, it has not achieved any success. Netflix hasn’t found a way to make live sports profitable, co-CEO Ted Sarandos said during the company’s earnings call in January. Instead, the company produces related programs that aren’t as time-sensitive – documentaries that follow athletes through their seasons, like “Formula 1: Drive to Survive”; Break Point, a series about professional tennis; and Full Swing, which provides insight into the PGA Tour. “We want to appeal to the sports junkie, but we also want to appeal to a casual viewer or a non-fan by telling the stories that go beyond that [those of] a live game,” Gabe Spitzer, vice president of nonfiction sports at Netflix, tells Fortune.
Spitzer did not want to reveal whether Netflix will offer live sports in the future. The plan is to tell more global sports stories through documentaries, he said. While the company isn’t talking about its plans in live sports, Reif Ehrlich says, “Never say never.”
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