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No Live Sports Could Lead To Providers Demanding Refunds

“According to Josh Kosman of The New York Post, Dish Network has already attempted to break the chain, by working to get out of the $80 to $100 million in rights fees owed to ESPN for the month of April.”

Brandon Contes

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Billions of dollars are still being spent on sports, but those shelling it out are without a return as the COVID-19 pandemic continues to force an indefinite suspension of all major leagues.

Networks are paying sports rights fees, cable companies are paying networks and subscribers are paying cable companies. There’s a chain reaction of dollars being spent while the product remains on hold. According to Josh Kosman of The New York Post, Dish Network has already attempted to break the chain, by working to get out of the $80 to $100 million in rights fees owed to ESPN for the month of April. 

Dish likely won’t be the only TV provider looking for a rebate on their rights fees agreements, says a report from analyst Rich Greenfield of LightShed Partners.

“US multichannel video subscribers effectively paid ESPN $650 million in April to watch one original series with literally no live sports on TV or for their talk show hosts to even talk about,” Greenfield said in the report.

“The multibillion dollar question becomes: what is stopping distributors from invoking force majeure? We believe there has to be a tipping point where enough sports have not occurred that distributors will refuse to pay sports network programmers.”

Currently, cable companies are still charging customers for sports channels because most sporting events haven’t been canceled, just postponed. My personal cable subscription with Optimum still includes a monthly regional sports network fee of $10.47, even though RSN’s have not aired a new game in six weeks.

It’s hard to anticipate any rebates being handed out as long as sports leagues aren’t planning on canceling their seasons. Providing customers with a rebate for lost games now, might mean charging them more later, if and when those sporting events are played.  

Similarly, sports teams are hesitant to offer returns on ticket sales until league’s determine how and when seasons will be played. If games are officially canceled or if seasons resume with no fans in attendance, it will be the team’s right to hold onto the money and offer tickets to a later event, essentially acting as an interest free loan.

Dish Network’s attempt to break their rights fees agreement with ESPN comes at a time when Disney has already been hit hard financially by the global pandemic. The Walt Disney Company recently furloughed a significant number of employees from their twelve theme parks, including 43,000 at Florida’s Walt Disney World alone. 

ESPN reduced executive salaries by 20 to 30 percent, also asking their top on-air talent to accept a 15% pay cut during the next 90 days. If TV providers such as Dish do back out of their rights agreements, those potential nine-figure losses could certainly have additional impacts on employee salaries. 

Sports TV News

The NFL Still Considering Multiple Offers For Sunday Ticket

The NFL has had the respective bids of Disney, Apple and Amazon for weeks now. DirecTV has not bid for the package but has stated it is willing to partner with the new rightsholder for a potential deal.

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Sunday Ticket Negotiations

DirecTV currently has the rights to Sunday Ticket. That deal expires at the end of this upcoming football season. The NFL is expected to make a boatload of cash when they decide which media organization gets the next rights to the package. The only question is… who will that be?

Alex Sherman of CNBC reports that the NFL has had the respective bids of Disney, Apple and Amazon for weeks now. DirecTV has decided not bid for the package. However, they are interested in partnering with the new rightsholder for a potential deal. DirecTV knows that Sunday Ticket is a staple in bars and restaurants and is interested in maintaining those relationships.

Outside of the bar/restaurant industry, success has been limited for the satellite provider with the football package. Fewer than two million subscribers signed up for Sunday Ticket each year which made the package a money-loser for the satellite TV provider.

According to the report, the NFL wants more than $2 billion for the rights and a stake in NFL Media, which is being packaged with Sunday Ticket. Also on the table is the NFL’s mobile rights. The league’s previous mobile agreement with Verizon has ended.

An interesting piece of the negotiations is Sunday Ticket price. According to the report, a buyer would have limited flexibility on pricing. The NFL signed contracts with CBS and Fox and within the framework of those deals, language mandates Sunday Ticket have a premium price. That’s to prevent loss of viewers from the networks that feature local market Sunday afternoon games. So essentially, the price is the price for the consumer.

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Sports TV News

F1 Renews With ESPN For U.S. Media Rights

ESPN was reportedly in a three-way bidding battle with Amazon and Comcast. According to the report, F1 told both Amazon and Comcast on Friday that they had decline to accept either one’s offer.

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F1 ESPN

The racing series F1 has decided to stick with ESPN through 2025.

ESPN was reportedly in a three-way bidding battle with Amazon and Comcast. According to the report, F1 told both Amazon and Comcast on Friday that they had decline to accept either one’s offer.

The reported value of the three-year contract is set to pay F1 $75-90M per year for the U.S. media rights. Amazon had offered to pay roughly $100M per year, with the right to sublicense to a linear broadcast network. Comcast’s offer was similar to ESPN’s in terms of value and the structure. They also wanted to put select races on it’s streaming service, Peacock.

Netflix was in on the negotiations, as well. The makers of Drive to Survive, the streaming series that many credit with the sport’s explosion in popularity in recent years, wasn’t close on on their financial offer. Also, it seems F1 executives were not ready to put all of its races on a streaming service just yet.

Currently, F1 receives $5M per year for ESPN to broadcast it’s races. ESPN has grabbed about 1.0 million viewers per race. That makes F1 a more than viable option for the network to invest into again. ESPN will be able to put a small number of races on its ESPN+ streaming service exclusively. The vast majority being on ABC or ESPN.

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Sports TV News

Skip Bayless Says He And Stephen A. Smith ‘Sorted Out’ Their Disagreement

“Brothers fight. We have fought before. I’m assuming we will fight again.”

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Skip Bayless

Stephen A. Smith and Skip Bayless were locked in a war of words last week following the First Take host’s appearance on JJ Redick’s Old Man and the Three podcast.

The origins of their partnership were discussed and Bayless admitted he did not like the way Smith characterized the state of First Take before he arrived on set. Smith insisted that Bayless simply misunderstood what he meant by saying that he was told the show needed him.

Over the weekend, Skip Bayless says he and Stephen A. Smith got together at the Bayless home in California to talk things out in private.

“He was in LA, he came over, we sat by the pool,” he said on the latest episode of The Skip Bayless Show. “It wasn’t the easiest conversation for a while, but we slowly but surely sorted it out. We got through it, and we have been through so much together.”

Bayless reiterated that he considers Smith a brother. They love each other. That doesn’t mean they are always going to remember events the same way or see eye-to-eye all the time.

“Brothers fight. We have fought before. I’m assuming we will fight again.”

Fighting doesn’t mean the relationship is fractured. In fact, Skip Bayless was adamant that he remains closer to Smith than he is to most people in his life.

“I don’t trust easily because of the way I was raised, but I do trust Stephen Anthony Smith. Trust him with my life. Always have and always will. I trust he will always be there for me, and you better believe I will always be there for him.”

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