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Even sports are changing, evolving

Sports may not be the sure bet they once were for viewership, as Gen Zers are not the fans of yesteryear.

Andy Marken

“It's supposed to be hard. If it wasn't hard, everyone would do it. The hard… is what makes it great.” Jimmy Dugan, A League of Their Own, Columbia, 1992

A few years ago, we were in a broadcast newsletter editor’s office and commented on the antique tube radio on the table behind him. He said it wasn’t an antique but a working radio he warmed up for every NY Mets game. 

Why? He wanted to “see/feel” the game just like when he was a kid. “There are so few great—and old—sports radio announcers left who can make you see the game or event in your mind,” he said, “and listening on a radio where the tubes are cooking/popping just adds to that reality.”

That really defines every sports fan—anywhere, any sport. They want to feel every moment of the event as though they were on the field or court being an integral part of the action. 

Sports are probably as old as civilization itself. History shows that people have been participating in sports for over 3,000 years, with new individual and team games developed, while others faded into oblivion or were replaced with newer versions. 

Depending on the popularity of the sport, athletes negotiate multimillion-dollar contracts, teams/franchises collect hundreds of millions annually in ticket sales/branding as well as distribution rights with local, national, and international radio and TV outlets.

Soccer, or as what many refer to as real football, is played in over 200 countries and is comfortably the most popular sport in the world. Football has some of the most renowned leagues in the world, is easy to follow, has a large/passionate fan base, and the FIFA World Cup has billions of folks following the action… everywhere!

Sports have been the primary reason why millions of households still pay their monthly pay-TV bills even though they turn to one of their streaming services when they want to enjoy a new, unique film or show. Face it, the new season of shows that networks have on their calendars are the same as last year’s “new, exciting” shows—reality, cops and robbers, thin plots, and news/interviews—so cutting the cable is easy, painless.

Except for the fact that it has been your connection to your favorite sport and team. Yeah, according to Parks Associates, 55% of pay-TV households keep their service because of live sports.

Lifeline—Since almost the beginning of television, sports have been vital to keeping people connected. They still are, but times are changing. 

 

Millions of fans around the globe go out and buy a newer, bigger TV set so they can watch the FIFA World Cup, ICC World Cup, World Series, Super Bowl, Wimbledon, and the Olympics. In between these championships, folks are glued to their sets, cheering on their favorite teams and sports heroes—Manchester United (soccer), Team India (cricket), Dallas Cowboys (American football), Golden State Warriors (basketball), Chicago Blackhawks (hockey), Serena Williams (tennis).

It’s so important and people are so devoted that the ScreenThink study found that 36% of subscribers to Sky and 34% of subscribers to BT TV pay for the services just to gain access to their sports content.

Live sports are the last bastion of live TV—it is mission-critical for pay-TV companies to retain Tier 1 sports rights in their bundles.

Parks officials noted that the churn rate for pay-TV services is significantly lower than that for OTT services. To keep subscribers, national, regional, and local services have even expanded their coverage relationships with college and secondary schools. To remain attractive to households that aren’t willing to pay for the all-inclusive “sports and stuff” bundle, providers have been experimenting with “skinny bundles.” The bundles come in a variety of flavors such as Foxtel’s Kayo Sports bundle in Australia. 

However, as the availability of sports content has expanded, and new sports OTT services and providers have reduced the demand and need for pay-TV. As a result, pay-TV providers are focusing their investments on Tier 2 sports and premium content. 

Pay-TV providers are evolving their value-added services such as shared viewing and personalized content for superfans. But they haven’t gone unchallenged.

Bidding wars—Streaming video services have increasingly been hungry to have exclusive rights. Having sports available on their service means a built-in audience will follow. 

 

Amazon has made it a priority to capture Tier 1 sports rights in key markets, and Apple TV+ recently became a premier sports service with NFL games in 2023.

However, Nielsen reports that sports ratings are declining, probably because of the proliferation of so many sports being available. Ratings for football have declined more than 10% in recent years, and MLB, NBA, and NHL have also seen slight viewership drop in past seasons. Despite this, live sports rights continue to rise. Major media companies including Disney, Comcast, Paramount, and Fox will probably spend $24.2 billion for rights in 2024, nearly double of what they spent a decade earlier.

Despite the increased cost and questionable return, Disney Star (India) will retain carriage rights through 2027 for an “undisclosed significant uplift.” Unfortunately, Disney+ Hotstar told shareholders to expect a decline in subscriptions in 2024 because they didn’t win the rights (pay lots of money) for the IPL (India Premier League) professional cricket streaming rights, and Paramount+ will get the games and subscriber uplift. Disney+ has projected a loss of perhaps 20 million subscribers.

But since Disney Star is keeping the pay-TV rights (we know, it’s complicated), it’s probably a profitable move.

On the other hand, the investment in sports streaming by Apple, Amazon, and YouTube puts them in a strong position as cable bundle subscriptions weaken and their exclusive shows, along with sports and their other business activities, look even more inviting to consumers. 

Sports are so popular—and difficult to locate on your various streaming services—that streaming search app JustWatch recently introduced a new free service, JustWatch Sports, for Europe and the Americas, with plans for availability in 100 countries by the end of the year.

JustWatch Sports will cover a growing list of live sports days, times, and locations, in addition to highlighting shows, so fans can find out when and where to watch their favorite team or sporting event. And surprise, all that convenience comes without a service fee. Yep, it’s free!

A looming concern for sports leagues, franchises, clubs, and even players is that the up-and-coming generation isn’t as hungry for sports as their parents. Only 53% of Gen Zers identify as sports fans, compared to 69% of millennials. The shift is partially due to gaming and social media.

According to Morning Consult, Gen Zers find esports more popular than MLB, NASCAR, NFL, NHL, NBA, or other sports, with only 35% identifying as fans. While millennials couldn’t get enough of live sports, the up-and-coming consumers—20.3% of the US population—just aren’t that interested. The trend worries the sports industry, which grew to more than $90 billion, thanks to skyrocketing media rights and sponsorship revenues. 

The gap is even worse when you separate out males—normally the largest fanatic segment—with 58% of male Gen Zers identifying as sports fans, compared to 75% of all adult men. 

The challenge, according to industry executives, is to make the sporting events more compatible with the younger crowds’ short attention span/variety way of life including gamification, daily fantasy, free-to-play games, and, ultimately, betting. The federal law prohibiting states from authorizing sports betting was unconstitutional back in 2018, which opened the door to making it legal, and active, in all but nine states.  

Although the size of the betting “market” varies widely by organizations estimating the market size, the US Census Bureau estimates that legalized sports gambling in the US will generate more than $2 billion this year and increase to more than $10 billion by 2028. Others put it larger—much larger. It’s still a huge number, and it can produce new revenue for sports-rights holders and broadcast/streaming services. 

That’s one of the key reasons why one of Disney’s activist investors, Third Point, “suggested” the company spin off sports-media juggernaut ESPN and use the “spare money” to buy out Hulu’s minority shareholder, Comcast. If Disney makes the move and retains a contractual link, the company could then delve more deeply—and aggressively—into sports betting, while maintaining an arm’s length distance, thus maintaining its family-oriented interest and image without a direct relationship.

​Betting—To make sporting events more interesting for some people, they have to have “some skin in the game” or something to win/lose. Mobile betting for some spice things up.

 

While it’s true that sports betting provides some folks with a decent supplemental income, it can also be very addictive, especially for the younger crowd who rely on their smartphone for just about everything. 

Globally, gambling is estimated to be a $400 billion business with 30–40% of the total coming from sports betting. While online sports betting is certainly less risky than playing the odds in Las Vegas—or worse yet, buying a lottery ticket or two—it’s still a long way from a “sure thing” or something we’ve bothered “playing.” 

But that’s us.

Sports are a lot more than just the competition on the field or on the court at any given day. Ultimately, it’s all about the money. Money for the individual participants, the team/franchise owners, the pay-TV/streaming services, and the advertisers. 

 

Source – “A League of Their Own,” Columbia

 

There are millions, probably billions, of folks around the world who agree with Helen Haley in A League of Their Own, when she said, “This will be better than a movie!”

We just don’t happen to be one of them.

The only reason we watch the Super Bowl is to see the really great commercials and the stuff some companies waste millions on.