In recent years, the world of sports broadcasting and advertising has undergone a significant transformation, marked by shifting viewership patterns, and a surge in streaming services competing with traditional media companies for rights to broadcast content. The ripple effects of these changes are now shaping the future of sports rights deals, creating new challenges and opportunities for advertisers.
From rising costs and fragmented rights deals to the growing popularity of women’s sports, the next year will give brands that advertise in sports a lot to consider.
With all of the changes expected this year and beyond in the sports media landscape, your media buying, and placement strategy needs to account for shifts in advertising so that you get the best return on spend.
Here, we explore the key trends shaping the future of sports advertising, new developments, and why your media buying advertising strategy has never been more important.
Fragmentation continues to intensify as negotiations for sports rights continue to heat up
The surge in demand for sports content, coupled with the entry of streaming giants like Amazon, YouTube, and Apple into sports rights negotiations, has created an intricate landscape. Leagues such as the NBA, NFL, MLB, and NHL are grappling with balancing linear and streaming rights, contemplating whether to partner with established streaming services or create their own platforms.
The NBA is the next tectonic plate to shift the sports rights landscape with virtually every major network and streamer maneuvering to get a major part of the action. The 2025 NBA rights are set to expire, and while Warner Brothers Discovery (Turner) is planning on keeping their rights and presumably expanding coverage on Max, the NBA is rumored to negotiate streaming deals with up to five media partners.
To understand how we got here, the NFL negotiations a couple of years ago exemplified a key trend: media companies commanding top dollar for sports advertising. This rise in ad revenue has translated into leagues securing more lucrative contracts during renegotiations. However, it has also made it more expensive for broadcasters, both traditional and streaming, to stay in the game.
The rise of streaming platforms like Amazon and YouTube in securing rights for Thursday Night Football and the Sunday Ticket, respectively, foreshadows a likely shift in the NBA rights landscape. The likely scenario is increased fragmentation, with different players securing rights, and a substantial rise in the overall cost.
The other wrinkle to fractured sports viewership is local team deals and regional sports networks (RSNs.)
The bankruptcy of (RSNs) owned by Sinclair and Diamond Sports has intensified discussions about the distribution of local team rights. As leagues like the NBA consider options, questions arise about whether to hand over rights to streaming services or create proprietary streaming platforms. This uncertainty is occurring concurrently with the renegotiation of league-wide deals, promising a vastly different sports broadcasting landscape in the near future.
Comprehensive sports platforms challenge the status quo
Sports fans, and to a larger extent, TV viewers, have grown tired of the back-and-forth between streaming apps, linear cable, and local channels to find the programming they are looking for. As cord-cutting has continued the slow decline of cable and streaming brands battle with high churn rates, some of the biggest networks are trying to solve for a comprehensive sports-driven platform that is attractive to sports fans.
Three leading American sports television companies (ESPN, Fox, Warner Bros. Discovery) have introduced a joint sports streaming service that would include their network of channels that broadcast sports events. The upcoming sports package will showcase games from major leagues such as NFL, NBA, MLB, and NHL. While there are still details to work out and many sizable challenges to face in its debut, the skinny sports bundle provides optimism not only for sports fans but for the future of the TV media landscape.
Major League Baseball also introduced a 2025 target for a streaming package that would include half the league. The package would satisfy baseball fans who enjoy in-market and out-of-market games without running into local “blackouts.”
The success of the streaming package hinges on a couple of things. Once again, the resolution of the Diamond Sports Group bankruptcy case has a huge impact on baseball and RSNs. Some teams’ digital rights are tied to this bankruptcy, and the outcome will impact the availability of those rights. Also, Amazon bought a stake in Diamond to become a streaming partner as part of the bankruptcy reorganization. So, it remains a fluid, complicated situation.
Second, it is uncertain whether large-market teams like the Red Sox or the Yankees would immediately participate in the streaming package due to the high value of their TV rights. Without some of the bigger players in an initial offering, it may be hard to get this streaming product off the ground.
There are more questions than answers about these comprehensive sports bundles, but it is worth monitoring to see if they gain steam and produce growth. It can potentially open up new opportunities for advertisers with more captive audiences.
Women’s sports are on fire with growing viewership numbers
Speaking of opportunities for advertisers, women’s sports are continuing to attract more eyeballs. Women’s soccer and the WNBA are examples of leagues experiencing increased popularity, opening up new advertising opportunities.
The success of women’s soccer has been mostly bolstered by the visibility of World Cups where the US National teams have had a lot of success. That international success has translated into league attendance records for the National Women’s Soccer League (NWSL). The 2023 NWSL Championship experienced double-digit growth YoY to the previous title match and the league signed a $240 million media rights deal with CBS, ESPN, Amazon, and Scripps.
It was a banner year for the WNBA, as they delivered record-breaking viewership, attendance, and digital engagement in its 2023 season. The league’s statistical achievements for 2023 are too long to list here, but they boast highlights such as 36 million total unique viewers across all national networks, debuted appointment viewing with Thursday nights on Amazon Prime Video, WNBA Friday Night Spotlight with new broadcast partner ION, and generated 373 million video views this season on social media. The WNBA on ABC even averaged 627,000 viewers, making it the most-viewed regular season on ABC in 11 years.
If your brand is looking to capture an energetic, growing captive audience, look no further than women’s sports.
Having a media strategy in place has never been more important
The appeal for advertisers in sports lies in three key aspects – massive audiences, live viewership, and high engagement. Live sports offer a unique opportunity for advertisers to reach a captivated audience, making it an attractive investment. In fact, as more TV viewers have seemingly infinite options at their fingertips, sports (and mainly football) are one of the last mainstays that attract a large captive audience.
As the sports advertising landscape becomes more complex, advertisers have a two-pronged challenge. Not only does the creative of an ad have to be compelling enough to hold attention in a world where messages are competing for space everywhere, but they must also strategically decide where to allocate the ad budget for maximum impact.
A well informed strategy that takes into account campaign goals, audience insights, performance data, and creative plays a crucial role in guiding advertisers on where to place their ads, ensuring they don’t waste resources on ineffective placements. This expertise becomes even more vital as the advertising landscape is expected to become increasingly fragmented in the next five years, requiring a deep understanding of emerging trends and consumer behavior.
The nuanced decisions, such as choosing between pregame, postgame, or in-game slots, and selecting the right networks, demand a level of expertise that comes from experience and analysis of what a client is looking to achieve as well as what has worked for other brands. That experience ensures that advertisers not only reach their target audience but also achieve high returns by strategically placing their ads in the most impactful spaces.
The next six to 12 months are poised to substantially change the sports advertising landscape, particularly for the NBA, MLB, and NHL. Adapting to these changes requires a nuanced approach, considering the impact of streaming, the fate of local team deals, and the ongoing negotiations for sports rights.
In this dynamic environment, advertisers must remain agile, embracing the opportunities presented by all sports, recognizing the power of live events, and strategically navigating the evolving landscape. The future of sports advertising promises a substantially different, yet exciting, terrain for brands willing to invest wisely and capitalize on the ever-changing dynamics of the industry.