Right when major sports rights owners such as the NFL and some of the BIG-5 European football leagues were ready to go to market with their broadcasting rights for their next (domestic) rights period, COVID-19 literally crashed the party and put the world (of sports) upside down. 😬
Whereas the 🇩🇪 German Bundesliga wants to adhere mostly to its previously communicated timeline, it is likely that the 🇪🇸 Spanish La Liga, 🇮🇹 Italian Serie A, and 🇺🇸 National Football League put their tender process on hold for now—benefitting from not having actually communicated a concrete timeline for when going to market with their broadcasting rights kicking in in summer of 2021 at the earliest.
Regardless of the long-term impact of COVID-19 on the sports media landscape, which might be game-changing and finally open the door for private equity firms, who consider even the biggest and most money-making sports properties as little sophisticated anyways and with a lot of potential for (financial) optimization, there has been the question whether a market correction had been inevitable and necessary nonetheless: being a rights-holding broadcaster has become a 📉 low-margin business, 🔒 accessibility to and 💲 affordability of premium live sports programming for casual sports fans have become increasingly difficult as broadcasters are forced to compensate for skyrocketing rights fees, and other digital (subscription) products are winning the battle for the consumer's mind and wallet share. In the meantime, rights holders are busy fighting 🏴☠️ piracy instead of putting resources into improving their product and value proposition compared to fundamentally better, more complete products such as Netflix and Spotify.
But do current conditions actually allow for more attractive products and price points as rights holders are facing the burden of immediately refinancing sky-high guaranteed rights fees 🚀 and less profitable "OTT Economics" 📱 compared to the traditional pay-TV model?
The English Premier League already faced a downward correction in their domestic market, despite the long-awaited market entry by "Big Tech." As the German, Italian, and Spanish league are heading into their respective tender process, another (significant) increase in domestic media rights revenue seems unlikely.
A lot of 🤝 innovation in the commercial models between rights owners and holders also seem to be on the horizon: Revenue sharing, new rights packaging, less exclusivity, and joint venture instead of fully guaranteed media revenues.
After all, resetting the "Sports/Media - Industrial Complex" could be beneficial in the long-run for all parties involved: ⚽️ rights owners, 📺 rights holders, and 🙌🏼 fans.
