Media Rights Fees For Lower Rated Sports Are Soaring

Media Media Rights Fees For Lower Rated Sports Are Soaring Brad Adgate Contributor Opinions expressed by Forbes Contributors are their own. Brad Adgate is an Independent Media Consultant Following New! Follow this author to stay notified about their latest stories. Got it! Sep 5, 2022, 07:25am EDT | New! Click on the conversation bubble to join the conversation Got it! Share to Facebook Share to Twitter Share to Linkedin Starting next year Disney will pay a reported $75 to $90 million to televise Formula One Racing.

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[+] hefty increase from the $5 million they had been paying. (Photo by Mark Thompson/Getty Images) Getty Images With live sports dominating TV viewing trends and a number of networks vying for the rights to televise games, the rights fees for lower rated sporting events have been escalating . Besides the 10-year $2.

5 billion agreement Major League Soccer struck with Apple TV+, several other agreements have been reached over the Summer including Formula One racing, The UEFA EFA Champions League and colleges Big Ten Conference with notable media rights increases. Besides potentially strong ratings, there are several other reasons for the increase in media rights fees. The first is to keep these events from going to such deep pocket video streamers as Apple TV+ and Amazon AMZN Prime.

Another reason is the rights fees of such popular sporting events are locked up for years. These include the NFL (expires in 2033), Olympics (expires in 2032), Men’s “March Madness” (expires in 2032), MLB (expires in 2028) and NHL (expires in 2028). Another common thread has been that live sporting events are airing more and more on broadcast television.

Formula One Racing: In late June Sports Business Journal reported that Formula One Racing has extended their U. S. media agreement with Disney.

Under the new three-year deal, Disney will pay between $75 million to $90 million annually. This is a sizable increase from the $5 million annual agreement Disney had made with F1 racing back in 2019 which runs out this year. With the new agreement, most F1 races will air on either ESPN or ABC.

A few races will also be streamed on ESPN+. The new deal expires in 2025. It was reported F1 Racing had rejected bids from Comcast CMCSA and Amazon, with Amazon even offering more money than Disney.

Comcast’s offer was said to be in line with Disney’s, with part of the proposal having a handful of races streamed on Peacock. It is expected in 2023 that, in a first, there will be three races held in the U. S.

(Austin, Las Vegas and Miami) with an additional three to be held in time zone friendly locations (Mexico City, Montreal and Brazil). F1 ratings have been improving in the U. S.

This year, through the first five races on ESPN, viewing has increased year-over-year by 49%. In July, ABC aired the Formula One race in Miami which averaged a record 2. 4 million viewers.

Also, helping to increase interest in F1 has been Formula 1: Drive to Survive which provides viewers a behind-the-scenes look at the sport. The docudrama has been streaming on Netflix NFLX over the past four seasons. MORE FOR YOU How To Become A Translator CNN’s John Berman: Arizona ‘Sham Audit’ Proves Donald Trump ‘Even Bigger Loser Than The First Time’ ‘Cut Him Off, Cut Him Off Now!’ Newsmax Anchor Ends Interview When Guest Criticizes Donald Trump UEFA Champions League: Another recent negotiation reporting a sizable increase in U.

S. media rights fees was soccer’s UEFA Championship League with Paramount. In August, Paramount renewed their U.

S. English language agreement with a six-year deal valued at $1. 5 billion.

The Hollywood Reporter says the price is 2. 5 times higher than the current pact between Paramount and UEFA. With two years remaining on the current contract, Paramount will be the U.

S. home for the UEFA Champions League through 2030. With the U.

S. being one of the host nations to the 2026 FIFA World Cup, it is expected soccer’s popularity will continue to grow. The UEFA is still negotiating its U.

S. Spanish language media rights agreement. Reportedly Paramount outbid other prominent media companies including Comcast which was bidding on both English and Spanish language packages.

Amazon was reportedly in the final round of negotiations with Paramount. Amazon has the U. K.

rights to stream UEFA Champions League. Founded in 1955, the annual UEFA Champions League tournament begins in late June and involves the leading soccer clubs across Europe. The tournament has a round-robin stage with qualifying clubs advancing to a double legged knockout round followed by a single elimination championship match.

Real Madrid is the current champion. Big Ten Men’s Conference: Of late there has been a lot of movement with colleges and athletic conferences. For example, last year Texas and Oklahoma, two of the most prestigious Big 12 football schools, announced they were leaving to join the Southeastern Conference (SEC).

A few months later The Big 12 announced they would be adding Cincinnati, Brigham Young, Houston and Central Florida to its conference. College movements have continued into 2022 when in July UCLA and University of Southern California announced they were leaving the Pac-12 to join the Big Ten in 2024. The addition of the two Los Angeles based schools made the 16-school Big 10 a nationwide conference with east coast schools Rutgers and Maryland joining in 2014.

The Big Ten will have a local school presence in the four largest TV markets; New York (Rutgers), Los Angeles (UCLA and USC SC ), Chicago (Northwestern) and Philadelphia (Penn State). The surprise announcement came prior to the Big Ten’s record media rights agreement. In August the conference reached a seven-year, $8 billion agreement (averaging over $1 billion per year).

The new rights contract starts on July 1, 2023 and runs through 2029-30 with Fox/FS1, CBS, NBC/Peacock and The Big Ten Network as media partners. The new agreement shuts out ESPN which had been televising Big Ten contests for the past forty years. While football is the most popular sport, the agreement includes basketball (men’s and women’s) as well as Olympic sports.

Looking at the new agreement for college football, The Athletic says Fox will televise games starting at 12 noon on Saturdays. Beginning in 2024 CBS (after its SEC contract ends) will televise games with kick-offs at 3:30 p. m.

NBC will then air “Big Ten Saturday Night”. This will provide college football fans with three Big Ten football games every Saturday across three broadcast networks. In addition, Peacock will exclusively stream eight football games each season.

The networks will alternate televising the Big Ten championship game with Fox televising in odd every numbered year and CBS/NBC alternating in even numbered years. Last year the championship game averaged 11. 3 million viewers.

According to Nielsen, in 2021, regular season matches generated an average audience of over 4. 1 million viewers across Fox/FS1 and ABC/ESPN. What’s Next: Upcoming media rights negotiations include NASCAR AR , who’s ten-year $8.

2 billion annual agreement with Fox and NBC expires in 2024. The next really big negotiation however, will be with the NBA whose current media agreement expires after the 2024-25 season. Currently Disney and Turner Sports own the media rights, ponying up $24 billion over the nine-year agreement ($2.

6 billion per annum). It’s been reported the new agreement could at least double or possibly triple the current media rights agreement. In addition, while the NBA would like to retain their relationship with their current media partners, there is a strong possibility of more media partners with a separate streaming agreement more than likely.

Last week, the College Football Playoffs announced they will expand the tournament to include twelve teams. The move will happen no later than 2026 when the current media rights agreement expires. ESPN has had the exclusive rights paying an annual fee of $470 million.

While ESPN s expected to bid on a contract renewal, it is possible the CFP will be televised (and streamed) across several networks with a sizable increase in cost. The soaring increases in media rights for live sports is also an offshoot of the poor ratings that scripted dramas and comedies have been undergoing. While live televised sports face the same fragmented landscape, the audience erosion has not been as prevalent.

As a result, media companies besides outbidding their competitors look at live sports as the last bastion of appointment viewing. Follow me on Twitter or LinkedIn . Brad Adgate Editorial Standards Print Reprints & Permissions.