Pay-TV in Tough Spot With Sports Fees, Relying on Esports

(Image credit: Peter Suciu)

LONDON—Sports fans aren’t the only ones missing the live action put on hold because of the coronavirus pandemic, pay-TV providers and content rights holders are facing difficult times as they are forced to continue paying for the license rights to sports even while they are off the air, and subsequently charge their viewers for them.

Pay-TV providers who have rights to broadcast NBA, NHL, MLB and NCAA games (all currently cancelled or suspended) still have to pay the fees associated with carrying the games. As a result, service providers are still charging end users for things like regional sports networks even though the most popular content they provide is currently not available.

“Content rights holders and pay-TV providers must sort out license fee issues due to cancelled sporting events as soon as possible to insulate against customer enmity and defections,” said Tammy Parker, senior analyst at GlobalData.

Some providers have said they are considering offering refunds for the charged sports fees, but no decision has been made by any as of publication.

Instead, many are turning to esports to offer sports-related content to viewers. Networks like ESPN have been airing live esports matches—occasionally featuring professional athletes—to fill the gap in live sports. NASCAR even held full-on virtual races with its stock of professional drivers, including some retired fan favorites, while its season was suspended.

“Esports in the U.S. is finally having its day in the sun,” said Parker. “Communication service providers should take this opportunity to build on their existing initiatives to sponsor events and teams, which are becoming more well-known to mainstream audiences.”

However, live sports—in some capacity—are on the verge of returning. As more options become available, it is unclear how this new emergence of esports will be impacted.