Professional sports have always been made for television, and with cable on its way out, we could be in for a new life in sports.
The “Big 4” professional sports leagues in the US have seen a surge in popularity of the last century. That’s largely due to being perfect for television.
The being said, major companies like CBS and Disney Corp. hitting a huge downturn in the market (as reported by the handle @SportsTVRatings), is it possible we are in for a huge change and cable being on the way out. What would that mean for sports?
woulda, coulda, shoulda but NFL would've been better off getting TV deals done before the last Super Bowl. CBS stock at ~$40 mid-January, now~$12. #GoodLuckRomo https://t.co/dUJstJgi1i
— Sports TV Ratings (@SportsTVRatings) March 20, 2020
In the current landscape, streaming companies have a decided advantage. They hold the leverage because the sports leagues would need them more than they need the sports leagues, or so that’s what some in the industry would think.
After conducting a poll (albeit a small sample size), this may not be the case after all.
When cable companies go out of business, would you drop your streaming provider if the didn’t have. #sports?
— Michael Pallas (@mtpallas) March 20, 2020
League advantages
If this poll is actually indicative of the view of people, and it’s a 4:1 advantage toward leaving streaming companies without sports, then the leagues still have the leverage. It will be status quo.
The leagues, like the NFL, can demand similar deals to cable companies and maintain their current business model. Not much will change, and the sports world will be just as we know it.
Streaming company leverage
Note: This is absent a reserve fund from the leagues to handle such occurrences.
If this poll isn’t anyway indicative of the nation at large, the streaming companies hold all the leverage, and we’re in for something different than we have ever seen before.
Each of the big four sports leagues is governed by a collective bargaining agreement, and all of them have a revenue split between the players and the owners. The revenue split includes television contracts.
Right now, cable companies need sports to stay afloat. That may not be the case for the streaming companies — like Netflix — and if it’s not we’re in for a huge change in sports and large scale free agency like we’ve never seen before.
If the streaming companies hold the leverage, the leagues can’t demand the exorbitant contracts they did from Disney Corp., Fox, CBS, and NBC. That means a precipitous drop in income and also player salaries.
There’s also a chance the leagues would face another dilemma: paying the players who are under contract at the time of the collapse. If they keep paying players the way they are, and streaming sports doesn’t generate the funds, they may have to buy out the huge contracts in order to stay operational as they are.
If that’s the case, we would have the largest free agency in sports history.
Time will tell which side we end up on, but the next decade or two in cable television will be one to keep a close look on for sports fans.
