In his capacity as a Columnist for California Sports Lawyer®, Founder and Managing Attorney Jeremy Evans has written a column about cable carriers and streaming and content companies dealmaking to reach more customers.
You can read the full column below.
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Cable carriers need streaming to reach growing audiences that are cord-cutting, while streaming platforms require more subscribers. The result is akin to the deal brokered between Disney and Charter Communications. Paramount and Comcast Xfinity have now brokered a similar deal.
It seems that the match made in Heaven between cable carriers and streamers took a while to reach an understanding. In the beginning of the shift to streaming, the carriage companies and streamers often fought over customers. Now it seems that the sides are embracing the need for each to survive.
There is still a large number of people utilizing cable to consume television and film, especially for live sports, news, and for the elder generation. It seems that the number of cord-cutters will continue to rise steadily until it either normalizes or technology and delivery of streaming rises to a level that feels comfortable for all people to see it replace cable. It is also true that it is taking some time for existing sports and rights packages to expire before the streaming companies can swoop in and offer a better deal.
Advertising and viewership continue to the be driving factor in live sports value and pricing. It was reported for the 2024 Rose Bowl Semi-final game between the Alabama Crimson Tide and the Michigan Wolverines that over 27 million people (with a peak of 32 million in the fourth quarter before Michigan’s overtime victory) tuned into the match. Streamers have had to adjust their advertising offerings to make sure that when certain sports rights and related packages are offered on streaming platforms there is a place to advertise.
Sports rights pricing is the quintessential issue as to why Netflix has stayed away from purchasing outright major sports broadcast rights to stream. Netflix has instead lived on the fringes looking to profitable sports documentaries and cost-controlled endeavors, which have been highly successful for both their bottom line and sports league partners (e.g., F1 and Drive to Survive). However, Netflix did introduce its ad-tier in November 2023 so there is a glimmer of hope for Netflix lovers and the first mover in streaming to take on live sports rights. Fortunately for Netflix, it has not had to move quickly into live sports rights as other platforms because Netflix was a first mover into streaming giving the platform an edge in gaining subscribers, building a library, and in a lack of appetite to take on further debt as it had to do so in its beginning stages of the streaming platform launch.
It would seem that going forward there will be more streaming deals to be had with carriers. The Los Angeles Dodgers and Spectrum being the most glaring example, at least in California, for people not being able to watch games without being cable subscribers. The Dodgers are the outlier however in terms of success with cable delivery mainly because Spectrum has many cable customers and Dodgers fans loyalty in attendance (leading MLB last ten years) and in out-of-market viewing via MLBtv. The most logical deal would be between MLBtv and Spectrum, but then again the deep pockets of Amazon and others could be a fit. Despite these deals being brokered between Disney and Charter, and Paramount and Comcast Xfinity, is that it comes of the heels of major concessions by the streamers and content providers looking for distribution. Streamers have had to give up more than they were willing in terms of offering varied paid platform packages and the like.
The truth is, neither side can afford to exist apart. Cable and streamers need each other. And at least for now, the people do too.
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About Jeremy M. Evans:
Jeremy M. Evans is the Chief Entrepreneur Officer, Founder & Managing Attorney at California Sports Lawyer®, representing entertainment, media, and sports clients in contractual, intellectual property, and dealmaking matters. Evans is an award-winning attorney and industry leader based in Los Angeles and Newport Beach, California. He can be reached at Jeremy@CSLlegal.com. www.CSLlegal.com.
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