Media Execs Can’t Agree On the Future of Sports

'Sports is a rental business.'

David Zaslav and Bob Iger stand side by side in suits.
David Zaslav (left) and Bob Iger have different streaming strategies. Variety via Getty Images

Live sports have traditionally been one of the biggest money-makers in television. More than 30 percent of television ad revenues come from live sports, even though sports programming accounts for just 8 percent of total viewing time. In recent months, the future of sports in streaming has come up in nearly every earnings call, shareholder meeting, and analyst conference, as investors and consumers are keen to know where the industry is moving. Perhaps unsurprisingly, the biggest names in media leadership all have different opinions—from total acceptance to outright denial.

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Bob Iger: streaming’s biggest fan

Bob Iger, The Walt Disney Company (DIS)’s chief executive, seems to be the biggest advocate for the future of sports in streaming. The transition from traditional television to streaming is inevitable, he said during an earnings call in February. The company has already begun pivoting ESPN, a Disney asset, away from linear television. It launched ESPN+, ESPN’s streaming counterpart, in 2018, and it has “grown nicely for us,” Iger said. The streaming platform is building out its exclusive programming by purchasing the rights to stream more than 100 NHL games and pay-per-view Ultimate Fighting Championship events.

Disney is also preparing to sell the ESPN channel, a main attraction in the cable bundle, alone as a subscription service, the Wall Street Journal reported. While the channel would still be available on television, the standalone option could reroute consumers who traditionally purchased cable packages for the purpose of viewing live sports, further contributing to a cord-cutting trend.

David Zaslav: watching and waiting

Warner Bros. Discovery (WBD) is well-positioned in the sports environment through the next few years because of the rights it owns, CEO David Zaslav said in an earnings call this month. Its cable channels—TNT, TBS and TruTV—will broadcast March Madness through 2032 and NHL games through 2028.

Last year, the company announced it would begin broadcasting U.S. soccer games simultaneously on linear television and HBO Max, but the discussion of sports has been noticeably absent from the streaming platform’s transition to Max. In last month’s presentation of the company’s new streaming strategy, Zaslav said sports would be a part of Max’s future but didn’t give any details. The advertisements for Max don’t show any live sports clips and instead focus on the streaming service as a destination for films and television shows.

Warner Bros. Discovery has experimented with sports on streaming but hasn’t made any final decisions, chief financial officer Gunnar Wiedenfels said yesterday (May 24) at the J.P. Morgan conference. “We don’t need to be on the leading edge of disruption, but we’re monitoring what’s going on,” he said. “There’s an equilibrium (between streaming and television) that will be beneficial.”

Zaslav appears focused on expanding the company’s franchise business. During the company’s earnings calls, he has repeatedly emphasized building on the intellectual property that Warner Bros. Discovery already owns. Earlier this year, the company launched a Harry Potter-themed video game and announced a streaming series retelling the Harry Potter books. While the company can make money from these projects without having to purchase any additional rights, that’s not the case with sports programming. “Sports is a rental business,” he said during this month’s earnings call.

Ted Sarandos: not interested

Netflix (NFLX) has been in the streaming game for the longest, and it is delivering the highest profits, but it does not offer any live sports programming. “We have not been able to figure out how to deliver profits in renting big league sports in our subscription model,” co-CEO Ted Sarandos said during the company’s January earnings call. Netflix is open to the possibility of live sports in the future, but it’s not beneficial to the company today, he said.

The streaming giant has ventured into live coverage recently by broadcasting a comedy festival in 2022 and a Chris Rock special earlier this year. It had technical issues last month with its third live event, the Love Is Blind Season 4 reunion. The practice with live content could prepare Netflix for a future in sports. The company has also carved out a niche in making documentaries about sports, including Formula 1: Drive to Survive, Neymar: The Perfect Chaos and Cheer. 

Lachlan Murdoch: holding off

The FOX (FOXA) Sports cable channel is a huge provider of sports, including games from the NFL, MLB and NASCAR. That’s how it will stay for the time being, according to Fox CEO Lachlan Murdoch.

Traditional television, rather than streaming, is best for sports viewership, Murdoch said at the SVB MoffettNathanson conference on May 17. There is a lot of friction with watching sports on streaming platforms, including identifying where games are showing, purchasing services and managing accounts. It’s not what’s best for consumers, he said. Traditional television bundles are the lowest priced, most convenient and have the best reach, he said.

Until streaming becomes what is best for consumers, Fox will continue its sports coverage on broadcast television, he said.

Brian Roberts: following the herd of consumers

Consumers are expecting the shift of sports to streaming platforms, and Comcast (CMCSA) can get on board, CEO Brian Roberts suggested at the MoffettNathanson conference this month.

NBC Sports, a Comcast property, has a host of sports rights, including Big Ten football through 2030, Sunday night NFL games through 2033 and the Olympics through 2032. It simulcasts all of these offerings on its streaming platform, Peacock, with additional games appearing only on the streamer. Comcast looks at its cable channels and Peacock as one business, said Michael Cavanagh, Comcast president, during last month’s earnings call. 

Peacock will be the first streaming platform to exclusively host an NFL playoff game in January of next year. It also exclusively shows Sunday morning MLB games, Premier League matches and the Tour de France beginning in 2024.

“There’s a longer runway” with sports, said David Watson, Comcast Cable’s head, at the J.P. Morgan conference on May 23. Comcast is launching a new streaming service, Now TV, which will host live sports, he announced at the event.

Sundar Pichai: driving growth on YouTube through sports

YouTube hasn’t historically been in sports rights negotiations. That is no longer the case.

The online video platform purchased the rights to the NFL Sunday Ticket and will begin showing games exclusively this year. The offering “will help to drive subscriptions, bring new viewers to YouTube’s paid and ad-supported experiences and create new opportunities for creators,” according to Sundar Pichai, CEO of Google (GOOGL), which owns YouTube.

Neal Mohan, YouTube’s new CEO, agrees that sports are a means for growth. YouTube is developing ways for viewers to engage with each other through comments, chats and polls, he wrote in a blog post in March. Later this year, YouTube will launch the ability to view multiple games at once. The Sunday Ticket package is available on YouTube TV or as a stand-alone option.

YouTube also owns the rights to a series of esports events.

Bob Bakish: cautiously optimistic

Paramount (PARA) Global operates CBS Sports as well as Paramount+, a streaming service. Sports “has been great for us on both,” said Bob Bakish, CEO, during this month’s earnings call. 

The company simulcasts NFL, Union of European Football Associations (UEFA) and National Women’s Soccer League games on traditional television and Paramount+. Consumers that purchase the premium streaming tier also have access to Big Ten and SEC games.

“The NFL clearly works on streaming. UEFA clearly works on streaming,” Bakish said at a Morgan Stanley conference in March. “We’re seeing it driving subscriber acquisition. We’re seeing growing engagement trends. And related to that, obviously, it benefits churn. So we like sports.”

But at the same time, “it doesn’t really add subscribers,” he said.

While Paramount+ shares many sports events with its cable peer, it has fewer exclusive rights than its competitors, suggesting Bakish is hesitant on investing in expensive sports rights for a streaming-only broadcast. Paramount+ does own the rights to Premier League in Mexico and some Central American countries through 2025.

Andy Jassy: busy with other things

Amazon (AMZN) headed a huge shift in the sports streaming industry last year by showing Thursday Night Football exclusively on Prime Video. The agreement runs through 2033.

Despite Amazon’s commitment to showing TNF for the next decade, CEO Andy Jassy has been largely quiet on where he sees the future of sports. Amazon does have an “opportunity to thoughtfully integrate advertising into…live sports,” he said during the company’s April earnings call. During conferences and presentations, analysts typically ask him questions about other legs of Amazon’s business, like Amazon Web Services, Prime, advertising and shipping.

Albert Cheng, Amazon’s vice president of Prime Video, hasn’t spoken much about the future of sports either. The company is reportedly working on a stand-alone app for viewing sports, according to the Information.

Eddy Cue: predicting the future

Like Amazon, Apple (AAPL)’s business doesn’t revolve around its streaming product. Still, Apple TV+ has gobbled up a series of sports rights, including Major League Soccer and Major League Baseball’s Friday night games.

“We wanted to go where the puck was going, not where the puck was,” Eddy Cue, Apple’s senior vice president of services, said at the CNBC CEO Council Summit on May 23. “That’s what (Wayne Gretzky) does. He skates to where the puck was going, not to where the puck is. And that’s the same thing we wanted to do with sports.”

Because Apple is so big, Cue only greenlights projects the company can do well and that consumers really care about, he said. Sports streaming is one of those things.

Media Execs Can’t Agree On the Future of Sports