Instead of live NBA games and “SportsCenter” recapping a night’s worth of action, ESPN has kept a couple of studio shows going and is leaning on its stable of documentaries — “I Hate Christian Laettner” was Wednesday night’s prime-time offering — as well as replaying old games.
ESPN is trying. Talent has used Skype from home during studio shows; one radio show was broadcast from a host’s basement; TV segments have used baby filters to spice things up; ESPN8: The Ocho returned for a day.
The dearth of any live sports has forced everyone in sports media — from network executives to upstart companies to beat reporters — to confront how to deliver content without games.
Fox Sports 1 aired an esports NASCAR race Sunday. Regional sports networks have fallen back on re-airing classic games. The Athletic unveiled an interactive piece that allowed readers to simulate the Houston Astros’ code-breaking scheme. Sports departments around the country, including at The Washington Post, have shrunk their print sections dramatically and lent reporters to the news desk.
It has been barely more than a week, and no doubt there will be plenty of necessity-driven creativity in the coming weeks. (April’s NFL draft will be a gift from the content gods.) Still, nothing can replace the games that drive a multibillion-dollar industry. No matter how innovative programming gets, the question coursing through much of sports media is how big the financial hit will be and how to survive until the games return.
In the short term, the networks’ first area of concern is advertising revenue. According to analyst firm Kantar Media, the NBA playoffs account for $600 million in advertising for Disney-owned ABC and ESPN and WarnerMedia-owned Turner. March Madness, broadcast by Turner and CBS, brought in $910 million in ad revenue last year.
While the NCAA basketball tournament has been canceled with little hope to recover those dollars, the French Open (NBC), Kentucky Derby (NBC) and Masters (CBS) have been moved to later in the year, and there is hope that at least some NBA games will still be played. If the inventory is saved, in theory, so too is some of the money that comes with it.
“As long as they play the games, as far as the big contracts, this works out in the end,” said Patrick Crakes, a former Fox Sports executive. “You’re not whole, but you’re not ruined. The airline business is probably in a lot worse shape than the sports media business.”
Beyond advertising, the existential threat of the sports stoppage is how it impacts the flow of billions of dollars among leagues, networks and cable distributors. Networks pay the leagues for content and collect carriage fees from the cable distributors, who recoup money from the viewing public.
“If this is a three-month break, most folks get through it, but I don’t even want to think about if this goes six months or nine months,” said George Pyne, former chief operating officer of NASCAR and current head of investment firm Bruin Sports Capital. “You’re looking at insurance implications and the fine print of these contracts.”
According to two people familiar with the NBA’s television contracts, there isn’t much latitude for a distributor such as Comcast to say to a national network such as ESPN or Turner that it is reducing carriage fees because the NBA playoffs were scrapped. Another potential acute pressure point is how consumers will respond both to the immediate situation and to a potential economic slowdown by dropping their cable subscriptions.
“This absolutely will accelerate cord-cutting,” said John Skipper, former ESPN president and current chairman of streaming service DAZN.
Jeff Krolik, who oversees roughly 20 regional sports networks for Sinclair Broadcast Group, suggested there is optimism for the cable bundle as his networks flood the airwaves with classic games.
“People are going to spend more time at home in the next few weeks, and people are going to watch a lot of television,” he said. (Sinclair paid $10.6 billion for the regional networks last year.)
Pyne, too, said cable networks are in less immediate peril than direct-to-consumer sports offerings.
“I don’t think anyone is cutting their cable because of the coronavirus,” he said. “But people who are trying to invest in content to build subscribers, to build a critical mass of users, do you lose subscribers if there’s no content?”
One of those companies is DAZN, which airs high-profile boxing matches in the United States and a smattering of other properties such as the NBA and the English Premier League in countries such as Canada, Germany and Japan.
“If you’re looking at the big picture, we’re not expensive,” Skipper said. “We’re $20 a month in the U.S. and $10 a month outside. People are going to look to save more money rather than less. [Direct to consumer] is coming, it’s going to keep getting bigger, and a short two-, three-month time period isn’t going to change that.”
He added, “People can pause their subscriptions with us … and we may see some pauses.”
Another of those subscription companies is the Athletic, a site that has made a splash by hiring writers to cover just about every pro and major college team in the country. The company extended its usual 30-day free trial to 90 days for new customers (it charges $10 per month or $60 annually), while reporters have done live chats and tweeted out favorite stories, which have been unlocked from behind the paywall.
“I believe the subscription business will prove to be resilient,” said co-founder and COO Adam Hansmann. “You build direct relationships with your customers, and it persists over time. We have found our readers remain very engaged, and we’re asking them what they want to read.”
He added that the company completed a recent fundraising round and is well-capitalized to weather economic unrest.
But there has already been some belt-tightening: The Athletic has temporarily suspended the contributions of freelance contributors. Sinclair has also released freelancers involved in game production at its regional networks.
Other sportswriters are concerned, too. At the Maven, a national network of team-focused websites under the Sports Illustrated umbrella, some contract writers received their most recent monthly paychecks about a week late. Given that having no games probably leads to a decline in visitors and advertising dollars in an uncertain economy, writers expressed concern about getting paid in the months ahead.
In an email, Maven CEO James Heckman called the concern “pretty silly.“ “We are a $150 million business, continue to forecast a profitable year and our traffic continues to scale up,” he wrote.
Meanwhile, the classic games will roll, the lists will continue, and fans will try to fill the sports void with cherry pit-spitting and marble runs — all of it in service of bridging the gap to a return of the games and hopefully the same coverage around them.
“When sports comes back, which it will,” Hansmann said, “it’s going to be magical.”