Sports Are Now Worth Too Much to Television Networks

All that’s left when it comes to TV ratings is sports, and that’s rapidly becoming a problem.

As the COVID-19 pandemic raged for the past 15 months, everything is now altered forever. When it comes to television, it appears the pandemic was finally the tipping point for the long-feared and much-discussed cord cutting.

With a dearth of new shows on broadcast and cable, millions flocked to streaming services for their entertainment fix. The pandemic also coincided with traditional broadcasters, like NBC and CBS, dipping their toe into the streaming wars, to battle the established Netflix and Hulu, to say nothing of premium sports streamers like ESPN+.

It’s led to the complete collapse of the television audience, to the point that broadcasters are accusing Nielsen of not properly capturing TV ratings anymore. There has to be an explanation, they believe, for the nightly audience of people watching television crashing by tens of millions since the pandemic started.

In sports, much of the ratings discussion has centered on the decline for pandemic-era events compared to their predecessors. Of course, the Kentucky Derby in September or the NBA Finals in October are not going to draw the same audiences as previous years. There was far too much attention paid to comparing sports to previous years, and not to its current competition.

That lingered into 2021 as we resume a fairly normal sporting calendar. Big events like the NCAA Tournament, The Masters, and Kentucky Derby have returned to their usual places on the calendar and the audiences largely returned. No, it hasn’t been at the same level of 2019 or previous years, but they bounced back dramatically from 2020. More importantly, the ratings for big sporting events – and even some not so big sporting events – are lapping just about everything else on television.

This past Wednesday, All Elite Wrestling was #1 on cable with its Blood & Guts show with a pay-per-view worthy main event. Due to Cinco de Mayo, it only drew about a million viewers, actually down from a couple weeks prior in total viewers. But in the coveted 18-49 demo, TNT actually beat CBS and ABC from 8 to 10 p.m.

We see this week after week across the board, with NBA games routinely beating just about everything else on television, same for ESPN’s Sunday Night baseball. These aren’t playoff games or even games that mean that much at the moment. It’s sports, it’s live, and it’s apparently the only thing drawing an audience these days.

That’s why the value of sports has never been higher despite audiences never being lower. The NFL, the obvious #1 in all of television, just announced it was selling it weakest package – the lame Thursday Night Football series – to Amazon Prime for more than $1 billion per year. Per year!

Recently, the NHL announced a new television deal too, despite seeing its ratings decrease over recent years. No matter, the NHL had multiple suitors and ended up leaving NBC for a joint deal with ESPN and TNT. The league – again, with falling ratings – was able to double its previous deal.

As we move forward, we’re only going to see this trend continue because so few things on television draw any sort of audiences. The broadcast networks have been struggling for years to develop anything into even remotely a hit. NBC, for example, launched a couple of comedies I really enjoyed in the past year like Mr. Mayor and Kenan. While both may be back next year, they won’t be mistaken for Friends or Seinfeld, and will get trounced by sports on a weekly basis.

The problem now moving forward is how this impacts fans, because at the end of the day, we’re the ones who pay for these ridiculous increases.

For the NFL, a hardcore fan will now need to pay for Amazon Prime to keep watching the Thursday night games. The new NHL deal contains a large ESPN+ portion, so fans will need to pony up for that to keep watching. European soccer has been mined by ESPN, CBS, and NBC to prop up their streaming services. I’m still amused by CBS putting Champions League games on Paramount+ when the games air for free on Spanish language stations.

Who knows what comes next as television deals get renegotiated in the next decade, particularly for college football and regional sports networks. There’s more money out there but it needs to pay for itself somehow, and that somehow is the fans.

How much is enough? When does the bubble burst? Do I need cable and streaming services? Do we have to start ending our fandoms for particular sports because it costs too much? How do kids get into sports if everything is expensive and a barrier to entry?

Of course, no one on the C-level at television networks or sports networks care about the future. They say they do, but the bottom line of the here and now is driving everything.

Personally, I don’t think this is sustainable. At some point, the model falls apart when you keep squeezing a smaller group of fans for more and more money. The answer should be in growing the game, yet the focus is on growing the revenue streams.

In the not-too-distant future, there will be no more money to squeeze, and greedy leagues will be left with much smaller fanbases who are fed up.

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