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Welcome back to The Varsity, where today I am focused on Atlanta. That’s where the
hometown nine will launch BravesVision, a “multimedia platform” that will produce, sell, market, and distribute the team’s games this season. The Braves hope to have a linear presence—the club is negotiating with distributors like Comcast, Charter, and DirecTV, and will almost certainly be relegated to an expensive digital tier. The team also hopes to engage YouTube TV and Hulu+Live TV, two virtual distributors that largely don’t carry R.S.N.s. This little experiment will go a long way in
determining the viability of individual franchises monetizing their own rights as commissioner Rob Manfred and MLB executives contemplate a league-wide mega-bundle in the years ahead.
It’s no secret that MLB wants to gain control of its teams’ local streaming rights by 2028 so it can create a programming package that it can sell to streamers when all of its rights are up. And yet the Braves are trying to maintain the same kind of flexibility as the Dodgers, Yankees, Cubs,
and Red Sox. Amid this dialectic, something’s got to give. It will be interesting to see which side capitulates, or comes to the table, first…
In today’s issue, the great Julia Alexander answers all your questions about what ESPN’s $550 million deal to distribute MLB.TV means for baseball fans. As always, Julia’s excellent work is available only to our Inner Circle fans, so click
here to upgrade.
Mentioned in this issue: Mike Tyson, Bernie Sanders, David Ellison, Gina Carano, David Ellison, Rob Manfred, Jake Paul, Rick Cordella, Jimmy Pitaro, Gabe Spitzer, Elizabeth Warren, Josh D’Amaro,
Ronda Rousey, and more…
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Stat of the Week: 47 Percent
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Most consumers associate free ad-supported streaming television (FAST) platforms with sloppy
reality TV and C-tier horror movies, but they’ve seen strong growth in recent years, and sports are an increasingly big part of that, according to analyst Alan Wolk. In fact, his latest report shows that 47 percent of all FAST audiences watched sports on these services in the U.S. last year. This year, though, with World Cup coverage coming to Tubi and more niche-sports offerings (pickleball, cornhole, billiards, fishing, etcetera) arriving on various platforms, FASTs
increasingly appear like a smart option for executives to reach new audiences that are wary of adding another subscription to the mix.
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- The legend of Legendary February: By now, you’ve seen the massive viewership numbers coming out of the Winter Olympics, which averaged 23.5 million viewers per day across linear and streaming. The gold-medal hockey game convinced some 18.6 million viewers to get up early on a Sunday morning. Remarkably, NBC has finished first in primetime for an amazing 143 consecutive nights on which it carried Olympics coverage (dating back to 2010 in Vancouver), and USA Network vaulted
to the top of the ratings for sports and entertainment channels across all of linear TV.
And yet, NBC’s press release didn’t fully capture how well Peacock performed over the past fortnight. During the Games, Peacock logged seven of its top 10 reach days—and six of its top 12 usage days of all time. Meanwhile, NBCU logged 16.7 billion streaming minutes on its platforms. It’s a reminder that big events like the Olympics are essential if Peacock wants to remain a viable
streaming platform. —John Ourand - Winning by subtracting: If there was one aspect of Peacock’s Legendary February that frustrated viewers (myself included), it was the ad load. I chatted with Dylan Byers on The Grill Room about this last week, but the cluttered ad experience was a result of NBCU needing to squeeze in creative from more than 100 new partners. Sure, Peacock’s platform makes it easier to deploy
targeted ads, but they often made it difficult to focus on the action.
At the very least, NBC Sports head Rick Cordella and his team decided to dispense with in-game commercials during the gold-medal hockey game between Canada and the United States. (As Puck’s resident Canadian, I refuse to discuss the outcome here.) It might have been a savvy concession, given how important these Games—and “Legendary February” in general—are for a streamer that needs to do everything it
can to keep fans subscribed while hopefully, finally, turning a profit. —Julia Alexander
- Netflix’s next MMA-vent: Netflix’s upcoming fight between Gina Carano and Ronda Rousey—two of the highest-profile female MMA fighters and two of the most polarizing figures in UFC history—is arguably the most anticipated showdown since Mike Tyson vs. Jake
Paul. Indeed, Netflix’s sports V.P., Gabe Spitzer, probably couldn’t conceive of more ideal programming for his “eventized sports” strategy. But why is this fight happening on Netflix instead of Paramount+, which inked a $7.7 billion rights deal with the UFC last August?
In the end, it seems that Paramount simply wasn’t interested in paying as much as Netflix and Paul (whose production company will stage the fight) for a one-off between two women
who haven’t fought in a pro match practically since the Obama administration—the kind of semi-unserious spectacle that risks attracting flyby, low-value, non-core customers who are likely to churn after signing up. Netflix, on the other hand, can sell the match to their advertising partners as a global live event, which is less about a commitment to the best sports and more about capitalizing on the most attention. It’s another example of what
streaming-only companies need when it comes to sports versus their multi-distribution behemoth competitors. —Julia Alexander
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The network is betting its $550 million link-up with MLB.TV will
attract a host of new users to its ESPN Unlimited app—and point in the direction of its future as a bundler.
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Major League Baseball’s regular season is an unwieldy monster: 30 teams play a total of 2,430 games
over eight-ish months, which makes it almost impossible for even the most obsessive fans to keep up with the action. And when the season starts on March 25, things are going to get even more complicated, following commissioner Rob Manfred’s three-year, $550 million rights deal that will route all new subscribers to MLB.TV—the league’s 24-year-old destination for all out-of-market games—through ESPN.
Already, there’s plenty of confusion about how the
transition will play out, even among sports media professionals. But ESPN chief Jimmy Pitaro is fully committed to making things work. After all, the deal constitutes a massive bet that programming all of MLB’s out-of-market games on ESPN Unlimited is the key to the network’s streaming future. In a perfect world, it could one day address the biggest issues of the post-R.S.N. era—namely, disaggregation and fragmentation, which have become the bane of sports fans
everywhere—while potentially earning the network millions of new, loyal subscribers in the process.
But even if the migration doesn’t totally work out, it’s a bet Pitaro had to make. As streaming platforms consolidate down to a few major players, ESPN’s future depends on being the first choice for sports. He said as much on CNBC last week, when he reminded everyone that “ESPN is in the bundling business. … We want to give the sports fan options, and so we’re very interested in
having more.” The question is whether MLB’s younger fans—whom the league has spent extra time courting—will seek out games on the new platform, or get their fix through one of many available loopholes.
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When the season starts, current MLB.TV subscribers won’t notice a change. They’ll still
be able to access games through the league’s app while paying $150 for the season. New customers, however, will have to sign up for MLB.TV through ESPN Unlimited, while existing ESPN Unlimited customers—including cable customers who can authenticate their Unlimited subscription for free—will be charged $135 for the season. The hitch is that new customers won’t need to continue subscribing to ESPN Unlimited to retain access to games—they’ll be able to access the central hub
through ESPN Unlimited, but without all the other, non-baseball content. Obviously, it’s a confusing process (I thoroughly enjoyed Jacob Feldman’s breakdown) with some potential risk for Pitaro & Co.
Despite this strange loophole, there are some strong signs that fans who remain in the ESPN Unlimited
ecosystem will stick around. League-specific services like MLB.TV, NBA League Pass, or MLS Season Pass aren’t perfect, but they’ve had encouraging trajectories in recent years. Sign-ups for league-specific services grew by 18 percent in Q3, which coincided with the start of the NFL, NHL, and NBA seasons. According to Antenna, MLB.TV accounted for just under 60 percent of all sports-centric streaming signups in Q2. These subscribers are some of the most loyal and engaged viewers in the entire
streaming universe, with relatively normalized churn, according to Antenna.
Meanwhile, MLB viewership was up overall last season across broadcast and cable. Fox averaged around 2 million viewers per game, a year-over-year increase of just under 10 percent; ESPN notched a 21 percent increase, with 1.8 million viewers per game; and TNT Sports saw a 29 percent increase for its non-exclusive games, averaging 462,000 viewers. The league has also had success with young viewers—the cohort
Manfred is most excited about. Last season, viewership in the under-17 demo grew by double-digit percentages on Fox, ESPN, and TBS, while MLB Network logged a near 60 percent increase. However, young viewers are also the most likely to “churn and return,” with eight in 10 Gen Z subscribers saying they canceled a service after signing up for a specific title (not necessarily sports specific) within the past year due to either price or lack of use, according to a new report from Civic
Science.
Manfred and his team need to keep up the momentum with this group, and reduce the friction involved with finding, watching, and paying for games. The bittersweet news is that while many R.S.N.s have collapsed—all nine MLB teams have terminated their contracts as of this preseason in the Main Street Sports debacle—the league has moved about half of its team’s feeds under its umbrella. And ESPN executives are surely hopeful that ESPN Unlimited could become home for all of
those local feeds by the 2027 season. (Of course, having all of those games under one company banner could be flagged for potential monopolistic behavior; Senators Elizabeth Warren and Bernie Sanders have already raised concerns about ESPN’s deal with the NFL and MLB over potential consumer harm.)
However, if consumers decide that accessing MLB.TV through ESPN becomes too costly or too annoying, Manfred and his team may have to deal with an increase in
piracy (or piracy-adjacent) behavior—something that’s already afflicting the sport. Web searches for V.P.N. services that are able to bypass MLB.TV’s regional restrictions have spiked each year in March since 2021, according to data from Google Trends, and one survey found 64 percent of Millennials admitted to watching games via pirated streams.
But assuming ESPN’s partnership with MLB.TV does work out, it could create an opportunity for Pitaro & Co. to hoover up other leagues’
direct-to-consumer offerings. And that’s especially true if ESPN is eventually spun off from Disney—something Pitaro vehemently denied in his CNBC appearance, but a subject of renewed interest among analysts following the $30 billion valuation revealed in Disney’s most recent earnings report, and Josh D’Amaro’s appointment as C.E.O. In other words, there’s a hope that MLB.TV could be the prototype for what ESPN’s direct-to-consumer product becomes a decade from now.
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Thanks, Julia. See you all on Thursday.
John
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Puck sports correspondent John Ourand and a rotating cast of industry insiders take you inside the executive suites
and owners boxes where the decisions that shape the entire sports business are made. You’ll hear interviews with players, network execs, and everyone in between. The Varsity is an extension of John’s private email for Puck by the same name. New episodes publish every Wednesday and Sunday.
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Ace media reporter Dylan Byers brings readers into the C-suite as he chronicles the biggest stories in the industry:
the future of cable news in the streaming era, the transformation of legacy publishers, the tech giants remaking the market, and all the egos involved.
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