Top Sports Rights Growing More Fragmented as Costs Skyrocket
The most popular sporting events in the U.S. are spread between more and more broadcasters these days, and customers are following them.
“Where’s the game streaming this week?” is becoming a more and more common question for global sports fans. There are seemingly more services than ever offering live sports and knowing which service carries which league or individual team can become dizzyingly confusing very quickly.
Despite that pain for customers, the holders of sports broadcasting rights have gotten quite a bit richer over the past nine years. According to a new survey by Ampere Analysis, total annual media rights spend in the United States, United Kingdom, France, Germany, Spain, Italy, and Australia grew from $20.8 billion to $34.9 billion between 2014 and 2022, an increase of 68%.
As the outlay on live sports has grown, so has the number of broadcasters who hold the rights to those leagues. For networks, the advantage to this is clear; although they don’t get as many exclusive games with this model, the growing costs of sports rights are defrayed for broadcasters if fellow channel owners are also splitting the bill. According to Ampere, the number of broadcasters holding rights to a top-10 sporting event (as determined by fans) in the U.S. has grown from nine in 2014 to 12 in 2022, following a global trend.
American audiences have seen the NFL jump from linear-only to several streaming platforms, including Prime Video and Peacock in that time. Companies that offer sports on their broadcast and cable channels like Warner Bros. Discovery have also begun offering games in multiple locations; WBD recently announced all sports on TNT and TBS this fall would be available to stream on Max, for example.
The spread of these live sports has caused sports fans to up the number of streaming platforms they subscribe to. Ampere states that sports fans subscribe to an average of 3.3 streaming services per household, higher than the 3.1 services the average Internet user is signed up for. That number is increasing, showing that sports fans are willing to accept fragmentation so long as they still have access to their favorite teams.
But the increasing costs of streaming for consumers mean that there’s likely a pricing ceiling, even among sports fans. A report from July indicated that 22% of Americans had canceled a streaming subscription in the preceding three months, and most of those who churned cited cost as a main reason for their departure.
“Shifting viewing habits have seen the continued growth of the streaming industry which, in turn, has brought new entrants to the sports broadcasting market,” said senior Ampere analyst Daniel Harraghy. “New buyers have the potential to increase the competitive tension in rights auctions which is desirable for sports bodies, and the rights to leading sports properties are being shared across a growing number of broadcasters. But as this trend continues, it’s key that the industry considers the additional cost barriers that result from such a strategy. Failure to do so has the potential to amplify existing piracy issues, while some services could see additional subscriber churn.”
The fragmentation of sports rights is exactly why Disney should be trying with all its might to bring the ESPN streaming platform it's trying to cook up to market as fast as possible. ESPN is not a universal sports rights holder, but it’s essentially the closest thing American audiences have in the current environment. Offering that array of live sports directly to consumers would help curb subscription fatigue and give sports fans something they’ve been begging for for years.
ESPN+
ESPN+ is a live TV streaming service that gives access to thousands of live sporting events, original shows like Peyton’s Place, the entire library of 30 for 30, E:60, The Last Dance, as well exclusive written analysis from top ESPN insiders. Sports available on ESPN+ include NFL, MLB, NHL, UFC, College Football, F1, Bundesliga, PGA Tour, La Liga, and more.