What ESPN’s NHL deal means for Disney’s other rights negotiations
There is a lot to take in from the NHL’s bumper new rights deal with ESPN, but perhaps the most interesting strategic nugget from ESPN president Jimmy Pitaro was the description of the contract as a “template” for future rights deals.
“As we move forward here, every deal that we are contemplating, every discussion that we have, has an ESPN+ and digital component. That has been the case for several years now, that is not a new thing, but it is important to highlight,” he said.
“As we move forward you can expect to see more [DTC elements in broadcast deals]. This deal is really a template of things to come and how we will be evaluating things as we move forward here, looking through both the linear lens and the direct to consumer lens.”
When you look at it, the NHL deal really is in two parts. The linear element is very top-heavy, with a focus on the league’s showpiece games that still make sense for traditional broadcast, such as the Stanley Cup finals, the playoffs and opening night. The digital side, bulked out by the out-of-market package, is understandably more focused on the avid fan.
If this is, as Pitaro said, a template for ESPN’s future rights acquisitions then it is not too difficult to see how it would apply to both MLB and the NFL.
Prior reports on ESPN’s MLB demands suggest that Disney wants to reduce its regular season linear coverage and focus on the postseason, particularly if the playoffs are expanded as they were in 2020. While seeking to reduce its fee, any new MLB deal would also likely include an increased streaming package for EPSN+.
For the NFL, as has been widely reported, ESPN would like to enter the Super Bowl rotation and be able to make use of the ABC commercial network. If the NHL deal were to be an exact template for the NFL contract, the Sunday Ticket out-of-market package going to ESPN+ would very nicely tick that box.
“Streaming is at the heart of [the NHL] deal and this is a reflection of its role as a critical part of our future,” Pitaro said.
Given the other major league contracts are under discussion, that future could begin to take shape imminently.
Why Rangers are the envy of the Premier League’s ‘big six’
Premier League chief executive Richard Masters indicated at the Financial Times Business of Football Summit last month that English soccer’s top flight would be going to market with its domestic rights this summer.
It is worth remembering that at this stage in the last cycle that seven of the Premier League’s nine packages had already been snapped up, and whilst the pandemic has undoubtedly been a factor in this delay, backroom talks have also put the brakes on getting the tender documents out.
According to the Daily Mail, after the Project Big Picture (PBP) debacle Liverpool and Manchester United executives have been kept off the working group charged with delivering the Premier League's strategic review. Initial recommendations from that committee are due to be delivered to clubs this month and it will be interesting to see if any of the proposals tabled during PBP make their way into the mix.
Last time out the so-called ‘big six’ got concessions on the distribution of overseas rights money. Given this is still an area targeted for growth by the Premier League, it could again be where there is some give. Even if Masters is unable to pull a PP Sports-size rights deal out of the bag in China, the US market looks prime for a market bump with a host of new major streaming products needing premium sports content and murmurs of interest from ESPN.
A further increase in the cut of overseas revenues might be enough to placate the big boys but one of the more interesting PBP proposals was allowing those clubs to sell a handful of games themselves DTC. This would be a major break from convention, but it is an idea gaining traction elsewhere.
Menno Geelen, the commercial director at Ajax, recently said the Dutch giants would be prepared to take less money domestically in order to gain control of their overseas rights.
Speaking to NRC Handelsblad, Geelen was critical of deals like the IMG-agreed Eredivisie contract in China with niche streaming platform K-Ball. He said: "Potentially you have a reach of more than a billion people in China, and the Eredivisie is selling the rights to an app with 200,000 downloads. That means you are giving away the entire market. And as an individual club, you are not allowed to sell any live content or match images to the Chinese market."
If Geelen and others need inspiration from clubs taking matters into their own hands, then look no further than recently crowned Scottish champions Rangers. Sensing an opportunity in the subcontinent, Rangers agreed a landmark broadcast partnership with Star Sports in October after acquiring the Indian rights to Scottish soccer’s top flight for the 2020/21 season.
Essentially acting as the Scottish Professional Football League’s (SPFL) sales agent in India, the Premiership giants agreed a deal with the Disney-owned pay-TV network that includes the club’s live matches and more than 15 other Premiership fixtures over the course of the season.
Rangers’ move is probably the envy of a few clubs in the Premier League, as the Scottish side has essentially built the SPFL’s regional growth strategy around itself. Along with a heavy dose of Rangers matches, the club are providing Star Sports ‘unique access’ and behind-the-scenes content, including rights to the preseason friendly with Indian Super League side Bengaluru FC at Ibrox this summer.
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