BIG TECH is turning its attention to a strange new battleground: live sports.
A report from the New York Times detailed how Apple, Amazon, and even Google are engaging in a bidding competition for the media rights of live sports events such as the NFL, the MLB, F1, and collegiate leagues.
But it is the NBA, said the report, that will provide the “first major test” of the big tech battle.
“Most sports and media executives predict that the league will stick with traditional broadcasters for most of its games, while carving out some small portion of rights for a tech company,” wrote reporters Tripp Mickle, Kevin Draper, and Benjamin Mullin.
This will be advantageous for the NBA, said an analyst to the NYT. The league will maintain its longstanding partnerships with broadcast networks, but give them the capacity to “dip their toe in with new media.”
Existing agreements with ESPN and Turner Sports (the latter of which jointly manages NBA Digital, including the league’s popular NBA League Pass) run through the 2024-2025 season, wrote the reporters.
But the big prize that everyone is gunning for are the rights to the NFL Sunday Ticket, which shows out-of-market Sunday games of the American football league.
A dozen sources told the Times that Apple is a frontrunner in the bidding war, with Apple chief executive officer Tim Cook meeting with league official and team owners of the Dallas Cowboys and the New England Patriots.
But Google is not to be left behind, tendering an offer for YouTube to run the games starting 2023.
Why are Apple, Amazon bidding over live sports?
The reason for the bidding war is simple: to grow their streaming platforms.
Their services — Apple TV+ and Amazon Prime Video — are currently lagging behind the frontrunner in the streaming wars, Netflix. But with Netflix’s admission that it had lost one million subscribers in the last quarter, platforms are likely scrambling to see how they can keep fueling their growth.
While streaming subscription services have traditionally specialized in network TV fare (with the occasional blockbuster movie thrown in), live sports seems to be emerging as a key platform to grow subscriptions. “Sports are the most powerful draw in media,” said the Times.
For the sports leagues, this will be a huge windfall, as the prices of broadcast rights climb higher and higher. But they must also balance their existing ties to broadcasters, who have held these rights for decades.
“[T]raditional television still offers the biggest audiences,” the report said.
However, old media executives may be feeling a little nervous as these tech companies — backed by sizable war chests — enter an industry that’s typically been the playground for TV execs.
“It’s hard when you’re competing with entities that aren’t playing by the same financial rules,” said Bob Iger to the Times. Iger is the former CEO and chairman of the Walt Disney Company, which controls ESPN.
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