I love a good collab. You usually find those in fashion like Citadel branded Air Force Ones, Christian Cowan x Teletubbies, Aimé Leon Dore x New Balances (which I own, subtle flex), etc. Sometimes, collaborations happen at the corporate level which is referred to as synergy in business speak. Notable partnerships include Microsoft’s investment in OpenAI, Apple's partnering with Goldman on the Apple Card (RIP), and now Disney is cooking something up for sports because streaming is just not making any money.
Gameday
This Sunday is the Super Bowl and 200M people are expected to tune in. While the game is the main show, we’ll also be watching the national anthem, the coin toss, the half-time show, and of course, the commercials. Although the streamers have been trying to sneak ads in more and more over the past year, the only place where we still get to experience the original tv-ad model is sports.
We’ve already taken a look at sports valuations before and saw that the NFL is by far the biggest of the bunch. What’s more fascinating is how the NFL continues to grow. Here are some stats on the 2023 season so far:
The NFL's regular-season games averaged 17.9 million viewers, which is a 7% increase from 2022 and is tied for the second-highest average viewership since 1995.
The playoffs set all-time viewership records, with the Wild Card, Divisional, and Conference Championship rounds averaging 38.5 million viewers. The Wild Card round averaged 31.2 million, the Divisional Round averaged 40 million, and the Championship Sunday averaged 56.1 million.
17 games averaged at least 25 million viewers, which is nearly double the nine games that averaged at least 25 million in 2022. Fox's coverage of the Kansas City Chiefs' Super Bowl LVII victory over the Philadelphia Eagles last year attracted 115.1 million viewers.
While some may claim Taylor Swift’s visits attracted more viewers, the Kanas City Chiefs’ win over Baltimore Ravens averaged 55.47 million on CBS, and San Francisco 49ers’ victory against Detroit Lions averaged 56.69 million on Fox.
Bonus: the AFC championship was streamed on Peacock, which reportedly costs $110 billion for media rights from the NFL.
With every game comes the ads, making, not just the NFL, but all live sports the final frontier for traditional ad-based television. It reminds me of when Harry Crane became the Head of TV in Mad Men, a position he had to create because they had no TV department (a deep cut, I know), marking the beginning of the end for the old ways. Now here we are, holding on to live television, while new departments are created. It’s why Netflix now has Raw and sports, and why Disney is making friends.
Together we can destroy them
Disney has had a big week. Not only did they obliterate earnings, announcing a $1.5 billion investment in Epic to create a ‘persistent universe’ tied to Fortnite(a whole story in itself), but they also announced a joint sports streaming service that will bring together Disney, Fox, and Warner Bros Discovery:
The yet-to-be-named service would offer an all-in-one package of programming that would include television channels, such as ESPN, TNT and FS1, as well as sports content that is streamed. Subscribers would also have the option of subscribing to it as part of a streaming bundle from Disney+, Hulu or Max. "This means the full suite of ESPN channels will be available to consumers alongside the sports programming of other leaders," Disney CEO Bob Iger said in a statement. - Disney, Fox, Warner Bros Discovery to create joint sports streaming platform, Reuters
The companies realize that we’ve been playing roulette with each service looking for sports. Every Sunday, I flip between all the services looking for games because 3 pm football is on Peacock, 8 pm football is on Fox Sports, and basketball is on Max. It’s not fun. This is how I imagine the deal: a centralized app where they can share the high costs of infrastructure and focus on gaining the audience, instead of building their separate networks for their own audiences, a much more expensive route. What’s funny is it’s basically internet TV, but instead of flipping through channels, you’re moving around nice tiles. Also, don’t forget the ads.
Thank you
Back in the day, we used to gather all at once to watch our favorite shows. I still remember clearing out Sunday nights for Game of Thrones and then discussing with all the friends the Monday after — what a time that was. But now that we can watch anything at any time, it seems sports is the only live event that can bring people together around a TV. I doubt that will ever change, and the streamers are realizing that. It’s interesting to see companies actually paying attention to profits instead of burning enormous amounts of capital. I guess it’s the consequences of higher interest rates. I know it looks bad in the short term, considering the rolling number of layoffs, but it does lead to healthier businesses and an overall healthy economy, which will pay off in the long run — hopefully. As always, if you have any questions, want more explanations, or strongly disagree, comment below, follow me on Twitter (X), follow me on Threads, follow me on TikTok, or shoot me an email.
Disclaimer: These views are my own, and do not necessarily reflect the views of any organization with which I am affiliated with.