Federal judge Richard Leon ruled today that AT&T’s purchase of Time Warner can go through without conditions, and it will have an absolutely seismic effect on the future of live sports rights in America and beyond.
First, you can expect the new conglomerate, which includes DirecTV and Turner Sports, to be a major player in NFL rights in the next cycle. All of the league’s rights are up in 2021 or 2022. David Levy, head of Turner Sports, has already said on the record a year ago he’d be interested in adding an NFL package. The company already has rights to DirecTV NFL Sunday Ticket, in addition to March Madness, NBA, and Champions League. This decision also emboldens Bleacher Report’s new BR Live OTT app.
Secondly, Comcast is going to make a big cash bid for the 21st Century Fox assets that Disney had agreed to buy. These assets include the wildly profitable regional sports networks, which combine to air about half of the local MLB, NBA, and NHL rights. (They also include Star India, which is a major player in cricket rights.)
Now it is expected that we will find out if Fox shareholders would more prefer more cash upfront for the assets, which they’d have to pay capital gains taxes on, or instead rather the assets join Disney in an arms race against Netflix and to a lesser extent Amazon. Or, maybe the baby gets split and various assets wind up with Comcast and others end up with Disney. Who knows. That’s why they play the games.
As I wrote verbatim yesterday, the following sports rights are up in the next five years (in addition to Sunday Ticket and Monday Night Football that are up in 2021 and the Fox/CBS/NBC Sunday games and Fox Thursday Night up in 2022): The MLB, NHL, and Champions League rights are up in 2021. The English Premiership and MLS are up in 2022. The Big Ten’s deal with Fox and ESPN and the SEC’s deal with CBS are up in 2023. In the few years after that, we’ll see the Big 12, Pac-12, College Football Playoff, and finally the NBA rights come up again.
Expect AT&T/Time Warner to be a major player in everything that comes to market. As for what happens with Fox, Comcast/NBC, and Disney/ABC/ESPN, we’ll have to wait and see how the next moves shake out.
There is still the possibility that the Justice Department will appeal Judge Leon’s decision, but for now the wheels will be in motion for the floodgates to open up for a) AT&T/Time Warner to start jockeying for more big live sports rights, b) Comcast to pursue the FOX assets, and c) more consolidation to come in the media industry.