Column: Looking ahead to sports in 2018
'Beyond the Lines'
The age-old question – where does the time go – can never be adequately answered. But if you’re reading this, you made it through 2017 and hopefully you’re looking forward to 2018. So let’s dust off the crystal ball and see what’s ahead in the world of sports business.
NFL ratings continued to plummet in 2017 – by last count down by 8.4 percent over 2016, which declined from the previous season. While those numbers would give most leagues apoplexy, NFL programming is still the number one watched show on every network. In a world with more TV choices than ever, lower ratings aren’t taken as seriously as they might have been a decade ago. Don’t be surprised if NFL ratings continue to decline in 2018.
With the U.S. absent from the 2018 World Cup, expect interest in the event to diminish from four years ago when the U.S. team made it to the round of 16. The fact the tournament will be held in Russia – multiple time zones removed from the U.S. – will also discourage viewership. Fox won a bidding war with ESPN/ABC, agreeing to pay $400 million for the broadcast rights to both the 2018 and 2022 tournaments. Fox projects a $20 million loss based on advertising commitments to date.
The merger agreement between AT&T and Time Warner was extended to June after the government sued to block the deal. If it goes through, the merger would create a media and telecommunications behemoth of historical proportions. Time Warner produces original content while AT&T distributes media, phone and internet services. Hence, this is a vertical merger that is unlikely to limit consumer choices. Here’s predicting the deal will ultimately be approved, albeit only after the government imposes a number of stringent conditions on the new company.
The recent trend in “cord cutting” will continue, but what is lost in the headlines is that only 10 percent of consumers are streamers-only. A majority of consumers are cord “stackers” - they subscribe to both pay TV and streaming services.
Bob Iger, CEO of the Walt Disney Companies, is the smartest man in sports media. Disney’s recently announced purchase of most of 21st Century Fox for $52.4 billion – plus $13.7 billion in debt - is a huge bet on the future of pay TV. The deal, which requires the approval of the Justice Department, will also enhance Disney’s previously announced creation of two new streaming channels.
Finally, MLS continues to expand at a voracious rate. The league recently announced two more expansion franchises for a fee of $150 million each, plus a commitment to build soccer only stadiums for an additional $250 million. More expansion is on the horizon for a league that has yet to make a profit. Is this a great investment or a Ponzi scheme? More on that topic in a future column.
There you have it, my prediction for the biggest sports business stories of 2018. Check back next year to see how I did. Until then, have a safe, healthy and productive year. And thanks for reading!
Jordan Kobritz is a former attorney, CPA, Minor League Baseball team owner and current investor in MiLB teams. He is a Professor in and Chair of the Sport Management Department at SUNY Cortland and maintains the blog: http://sportsbeyondthelines.com The opinions contained in this column are the author’s. Jordan can be reached at firstname.lastname@example.org.