The exorbitant spending required to obtain these rights means that these companies have less money to spend on other kinds of content, such as original series. One industry consultancy, LightShed Partners, has gone so far as to question whether networks should abandon general entertainment altogether in favor of sports.
It also means that rights holders need to generate more revenue from their packages, which they can accomplish by introducing more inventory or raising prices.
In practice, media rights holders pass these higher costs on to customers, either through larding the games with more ads or sponsorships, or raising the price of a cable or streaming service subscription. In other words, the high price of sports rights ends up costing consumers—either by degrading the viewing experience or in access fees.
While media rights holders do not share in ticket sales, the outrageous price of tickets—to the World Cup, as well as events like the NBA Finals—represent a similar line of logic.
FIFA has been criticized for using dynamic pricing to sell tickets, ensuring that each unit is priced to its absolute maximum. Tickets to the NBA Finals games here in New York are setting new records, pricing out nearly all but the wealthiest of fans. Taken together, the economics of both reflect an ecosystem whose every element has been ruthlessly financialized.
Of course, such are the laws of supply and demand. The live sports industry will continue to charge these premiums until the market no longer supports them, and there are nascent signs of consumer revolt. Rupert Murdoch is lobbying to undo the antitrust exemption protecting the NFL, 33 states are suing Live Nation and Ticketmaster, and the sticker shock of World Cup and NBA Finals tickets are souring consumer sentiment.
Whether these efforts bear fruit remains to be seen. In my experience, when it comes to advertising, once new inventory has been introduced it is rarely walked back. Fittingly, the most American contribution to the World Cup this year might just be that unwelcome realization.
Talking Heds
Samsung Gets Original (EXCLUSIVE): On Friday, Samsung TV Plus debuted its first original scripted series, created exclusively for the FAST platform by YouTube creator extraordinaire Dhar Mann. The series, called Unlikely Romances, is not the point—its best quality is that it is easily forgotten. The real news is that Samsung, which manufactures and sells TVs, is getting into the business of original scripted content, a gambit designed to help it capitalize on its distribution advantage, i.e. the fact that every TV it sells comes preinstalled with Samsung TV Plus as its home channel. As a FAST platform, STVP has historically stuck to licensed and catalog material, which is cheaper than original programming. But, in the newly cost-conscious streaming ecosystem, YouTube creators are a cheat code, as they can produce original content for a fraction of the price. Is it quality? Debatable. Will there be more of it? Almost certainly.
Mark on Vox: I joined The Addition podcast with Charlotte Henry last week to discuss some of my latest reporting on the ongoing breakup of the Vox Media portfolio. Even if you have been following along with the saga, I shared some details in this conversation that never made it into my (or others’) reporting, so it is a fun listen for that reason alone. Here is the YouTube link, but of course you can listen to it/watch it wherever you listen to/watch podcasts nowadays, which at this point is basically anywhere.
