Will broadcast save the sport or kill it?

Sports and TV have flourished together. Our future of entertainment will be shaped if broadcasting and sports can replicate that largely happy partnership.

My colleagues recently reported that Amazon, Apple and Google’s YouTube may be willing to pay billions of dollars for popular sports like the National Football League and the National Basketball Association to move their games from TV to streaming services technological.

For decades, television companies – including CBS and ESPN in the United States and Sky in Britain – have paid sports leagues a pile of money to be the only place people can watch games. Television money has made sports rich and influential in entertainment and culture. Sports broadcasting made TV rich and powerful as well.

Today’s newsletter examines three questions that would be important if tech companies follow the old-school TV playbook and go more into online sports streaming.

1) Why do tech companies want sports?

This is an obvious answer: Companies want to attract subscribers to their video streaming services, and many people love sports.

There are two unknowns for Silicon Valley bosses. First, no one has yet proven that a group of people will sign up and stick with a streaming service to watch six months of top-flight baseball or European soccer matches. (To be fair, so far, few popular sports are available to watch online only.)

A related unknown is whether the big tech companies will find it logical to pay sports leagues silly sums like old TV has.

The math may not work out so well for the streaming companies. Disney collects billions of dollars a year from cable companies to include TV channels like ESPN in their programming lineups and more from advertising. That’s a lot of money to pay for NBA games, squash or whatever.

Streaming subscription fees do not have the same step. The largest streaming company, Netflix, has about the same annual revenue as a relatively small television company, Paramount Global, which owns the CBS and Comedy Central television networks and the Paramount+ streaming service. Broadcasting is great in many ways, but it may not be profitable enough to support the sports industrial complex.

A counter: Apple, Google and Amazon have endless dollars and can afford to lose money to see if sports attract a bunch of new subscribers. But they also won’t hesitate to walk away from online sports streaming contracts if they no longer suit corporate goals.

2) Why do sports leagues want broadcasting?

Major sports leagues have two sometimes conflicting missions. They want as much money as possible and they want a large number of viewers for games. Tech companies may offer the former, but not necessarily the latter.

Right now, sports on TV have far more viewers than online sports. It’s weird, actually. Kevin Draper, a sports reporter for The New York Times, told me that when the same NFL game is simulcast on the Fox television network and the Amazon Prime streaming service, the viewership on Fox is many times greater. During the Super Bowl, about 90 percent of viewers watch on boring old TV and not online.

This is a dilemma for sports managers. They are excited that Apple, Amazon and Google can pay them to stream sports. They are also concerned that streaming services could reduce the viewership of sports, which could make their leagues, teams and players worth much less.

Chances are, sports leagues will get big bucks from tech companies — assuming the money is there. Or they will hedge their bets and keep the more popular stuff on TV and sell lower profile games to the broadcast companies.

3) What does this mean for us?

Maybe higher streaming bills.

Anyone who pays for TV — whether you watch sports or not — is footing the bill when ESPN or CBS pay for the rights to broadcast college football or March Madness basketball games. These sports costs have only increased over time.

This has made the sport a double-edged sword in entertainment. Games are the most popular television programs by far, and they’re a big reason Americans continue to pay for cable or satellite TV. But the rising cost of sports is also persuading people to ditch the TV service.

Apple, YouTube and Amazon can afford to spend billions of dollars on sports without raising subscription prices for their streaming services. But hahahahaha. If programming costs much more, streaming subscription prices likely will too.

I don’t know what will happen next. I can envision a scenario in which streaming services have a long marriage of mutual benefit with sports, as conventional TV did for decades. This can be great for fans, team owners and players as well.

I can also imagine a sports and broadcasting death spiral. If people get tired of the huge broadcast bills for sports, then the leagues have less money and less fans.

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