Big Tech is muscling broadcasters out of live sports streaming

Traditional broadcasters might be starting to sweat. Live sports streaming has always been a cash cow, but the game is changing, and there are new players on the field.

For years, Sky and BT ruled the arena of sports media rights but, over the past decade, Big Tech has been muscling its way into the picture.

Deep-pocketed giants like Amazon, YouTube and Apple are scooping up sports rights. Amazon’s extensive portfolio now includes the NBA, NFL, the Premier League and, as of this season, The Champions League. Apple holds rights to Major League Baseball, while Google’s YouTube secured the NFL Sunday Ticket in 2022.

In May, the NBA signed a “landmark” 11-year, $76bn media deal with Amazon Prime Video, Disney and NBCUniversal, set to kick off in 2025. Even Netflix, which was slow to warm up to sports, has now bagged WWE and Christmas day NFL content.

A new report by Houlihan Lokey reveals that live sports content spending by streaming platforms surged to $8.5bn in 2023, a 64 per cent leap from the previous year. Tech companies are betting that sports will boost subscriber growth and lock viewers into their ecosystems. 

Gareth Balch, chief executive of sports marketing agency Two Circles, which works with marquee rights holders like the English Premier League, UEFA, and Formula 1, said the buyers are changing as fans change the way they consume media.

“Fans are using cable much less than they used to and they’re switching to streaming,” he explained, “and that shift means there’s different buyers for sports rights, and their buyer motivations are different than the previous guys. It means that there’s a need for a new proposition from sports to be able to sell their rights in a way that makes more money.”

Balch added that rights holders are in search of fan growth, and today’s fans demand “frictionless, personalised” experiences. Sports is gently leaning towards a so-called sportainment experience, blending the lines between sport and digital entertainment.

Tech companies have the potential to excel at this. With their troves of data, they could offer personalised experiences, such as recommending merchandise based on viewing habits and shopping patterns.

Sports teams are IP. They’re finite, just like music catalogues; they’re not going to get diluted.

This puts traditional broadcasters in a precarious position. Without the technological capabilities or well-stocked coffers of the likes of Amazon and Apple, do they risk losing out to Big Tech?

“I think it’s going to become increasingly challenging, for sure,” said John Lambros, head of digital media and entertainment at Houlihan Lokey.

Still, rights holders are treading carefully. Sports are a lifeblood for broadcasters, and they will defend their territory. “Apple and Google have a whole line of other businesses that they do that aren’t necessarily about sport, and so [rights holders] need to be convinced that they are going to put sport at the same priority level as a Sky or a Comcast – and that is going to take time to get comfortable.”

And some sports, such as rugby, may also need to be free to air, simply because the market isn’t big enough.

Lambros added that, while tech has the upper hand financially, it needs to innovate on the viewer experience if it wants to stay ahead of broadcasters and capture growing audiences watching sport on platforms like Youtube and Tiktok.

Streamers must leverage their tech capabilities to provide experiences traditional broadcasters can’t match. In Asia, he said, tech-driven stadium experiences are married to the digital experience with experiences like real-time stats and interactive betting – something that has not fully hit the US or Europe yet.

With the global sports market valued at $460bn (£347bn) and projected to soar beyond $860bn (£648bn) in the next decade, it’s also catching the eye of private equity. “Sports teams are IP. They’re finite, just like music catalogues; they’re not going to get diluted,” said Lambros. “So there’s an interest from tech. There’s an interest from private equity.”

While the future of sports rights may end up finding a balance between broadcasters and tech, it’s clear that the days of passively watching a match on a cable channel are fading fast, and the streaming giants are out to win.