Tom Butts is Editor-in-Chief of TV Technology.
When the Miami Marlins officially opened their new stadium last week, the approximately 37,000 fans were able to experience the latest in state-of-the-art technology, from humongous hi-def screens with sophisticated audio systems to interactive attractions and more. The game itself is just one of the many features of today's multifunctional sports stadiums. But those fans were really just a backdrop to the real goal of any sports franchise today: television rights. The stadium itself—which was designed with television in mind—is one gigantic stage to showcase elite athletes playing America's game for the television screen.
When it comes to sports television these days, broadcasters are just part of a much larger and more complex web of regional cable sports networks and other media outlets. Baseball, in fact, has pretty much been dropped from many local broadcast stations, with regional sports networks and the MLB Network providing the bulk of the coverage. The trend of big-time sports moving from broadcast to cable and other pay-TV options is one of the defining issues of our industry and, in some ways, is a microcosm of how consumers will access their entertainment in the future.
But while many consumers are deciding that they can do without the monthly cable bill, opting for streaming services such as Netflix and Hulu Plus, sports is a completely different animal. Unlike their favorite sitcom or reality show, where viewers can choose when to watch, sports on television is a live event, best watched on the big screen—a natural for television as we've always known it. As long as there are professional sports teams, consumers will always demand the best in viewing options; it's hard to fathom much of an audience for viewing the Super Bowl or the Stanley Cup Finals on an iPad.
The recent sale of the Los Angeles Dodgers for a record-setting $2.15 billion is a perfect illustration of what's at stake. Owning a major sports franchise in the country's second-largest media market may not be equivalent to having a license to print money just yet, but the potentially lucrative media deals might make it seem that way.
"If you realize it's not a baseball deal first but rather a television and entertainment deal that also comes with a real-estate opportunity, then you can begin to scratch your way back toward justifying the price," David Carter, director of the Sports Business Institute at the University of Southern California, told the Wall Street Journal. Currently Fox owns the rights to telecast Dodgers games through 2013, but the sale could prompt the launch of a separate sports network, √† la the Yankees' YES or the Mets' SNY cable networks.
Cable viewers in Southern California are understandably wary about what such developments will mean to their monthly bills. It's no secret that some customers are cutting the cord as a form of protest over rising cable bills prompted by the rising sports rights fees demanded by ESPN and regional sports networks. The recent news that News Corp. is planning a national sports network to rival ESPN and the fledgling NBC Sports network just adds fuel to customers' ire over future fees. The American Cable Association, an organization of small and mid-market cable firms protested the Dodgers' sale, warning that a new long-term TV rights deal could be worth "between $200 million and $300 million annually—compared to $38 million this year—with an overall price tag of $4 billion. In either case, consumers of cable and satellite TV can expect to see their monthly bills continue to move higher."
Meanwhile, viewers—for now at least—can continue to access big-time sporting events such as the Super Bowl, World Series and the Olympics over free broadcast TV. But whether or not our industry will continue to provide such an outlet will depend on how sports franchises and their demands for increasing rights fees are balanced between the realities of the marketplace and the fans' dreams of a national championship.
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Tom has covered the broadcast technology market for the past 25 years, including three years handling member communications for the National Association of Broadcasters followed by a year as editor of Video Technology News and DTV Business executive newsletters for Phillips Publishing. In 1999 he launched digitalbroadcasting.com for internet B2B portal Verticalnet. He is also a charter member of the CTA's Academy of Digital TV Pioneers. Since 2001, he has been editor-in-chief of TV Tech (www.tvtech.com), the leading source of news and information on broadcast and related media technology and is a frequent contributor and moderator to the brand’s Tech Leadership events.