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November 15, 2011

Sports Rights—Regional Content is King

At SBJ's Sports Media & Technology Conference in NYC last week, cable execs shed light a growing trend in the sports media landscape: networks focused exclusively on live local and regional sports coverage, and their next logical step—the high school market.

 
The economy has played a role in the increased popularity of local and regional sports viewing, according to Kim Carner, Vice President & GM, The Mtn. Whereas a family may not be able to afford a movie, watching sports on TV is “still a family experience,” she said. Groups still have a place they can go to enjoy live matches: “on a screen at home.”
 
As teams continue to cut rights deals with individual networks, that could get even easier. “We saw it with the Yankees and YesNet, said Steve Raab, President, SportsNet New York, a regional network with which 4 RSNs of its own.
 
But the jury’s still out whether every team will eventually get its own network, the panelists agreed. “There’s risk that comes with creating your own network,” said Raab. The question becomes, “as the cost of teams go up, how much risk do they want to take?” In addition, there are blackouts everywhere, Carner added, so that prized local content isn’t necessarily available every place fans want to see it. “That becomes problematic,” she said. “Maybe we’ll break down that barrier at some point.” Nonetheless, the market’s demanding it. “We’re getting down to that level—the “show it to me” from fans.”
 
 
High School Market
 
Another area of growth is high school-based sports content. “High school is so hyper-local, it really lines up for cable operators,” said Raab. David Rone, President of TWC Sports, concurred, calling the high school marketplace “very competitive.” But it’s nothing new to TWC, he said. “We will have high school content in RSNs, but also shown on Time Warner Cable local channels in our footprint [in CA], and also Ohio, Texas, the Carolinas…”
 
The Mtn.’s Carner, on the other hand, can’t get near high school programming as a conference network, due to the “sensitivities of recruiting.” Though her net isn’t allowed to touch it, it’s becoming more competitive for programmers to get involved. “The barrier to entry for high school sports coverage is dropping fast.”
 
Sports Everywhere
 
Panelists agreed that sports games will eventually be available for the fans where they want to watch them—because that’s the demand. “Once everyone agrees on the incremental value from local streaming and how that’s shared,” said Raab. “It’s going to happen, because no sport wants to be left behind.”
 
But Jeff Krolik, EVP, Fox Sports Networks added that live streaming will not undercut the basic cable model. It will occur through authentication, he said. With a $140/month cable bill, the consumer’s request—“please don’t nickel and dime me”—is legit. “There’s no great new fund of monies for people.”
 
Monetizing Long-Term
 
The sports rights scene abounds with decade-long deals, which begs the question—how will they be monetized? Krolik noted that their lifespan certainly ups the ante. “20-year commitments is a career commitment. Stakes are raised on both the buy and sell side.” The most important thing is the partnership, Rone added. “History has shown we’ve created enough to make it work…. It really helps when have two sides of the equation working to make it happen. That’s how it has to work.” And if the scene shifts along the way—who could predict the sports rights landscape 20 years from now?—“there’s a lot of 2-way schmuck insurance there.” Just in case.
 
 
 







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