A contract dispute between Disney and Google led to YouTube TV dropping ESPN and other Disney-owned channels.
The conflict highlights a larger power struggle between traditional media companies and tech giants over sports broadcasting rights.
Approximately 10 million YouTube TV subscribers are affected by the channel blackout.
The standoff between ESPN – corporate overlord Disney – and YouTube TV – corporate overlord Google – has little to do with subscriber counts. Or viewership numbers. Or money, even. (It’s always about money, of course, but let’s zoom out for a moment.)
Those data points and cash flows are all minor components of the situation the companies find themselves in, which began Oct. 30 when YouTube announced it would stop airing Disney-owned stations, including ABC and ESPN in the sports world, and options such as FX, National Geographic and Disney Channel in the larger entertainment space.
The bigger picture is that the blackout is a harbinger of the future of how we watch sports and the rivalries that define where we consume the content. Because caught in the middle of the boardroom back-and-forth are the fans.
Hopefully you already knew that these massive corporations – the leagues are included in this – have no interest in serving the public. Line graphs going to the upper-right-hand corner of screens are in style, and the people making them will do anything to push them in that direction, even if it means not airing a “Monday Night Football” game or a Saturday of college football.
Tech giants poised to further disrupt sports broadcasting
The approximately 10 million YouTube TV customers – by far the biggest losers in this drama – already pay $82.99 per month for the service that essentially replaced cable. Good luck filling a sports-centric “quad-box” without ESPN, ESPN2 or SEC Network. Disputes between carriers and networks such as ESPN still happen, but that there is a warring between a company with the streaming might of YouTube is another point to consider. YouTube TV currently controls the NFL’s Sunday Ticket package for an additional monthly cost.
Where do people go to watch the highlights of games they missed, which may have aired on ESPN? YouTube. Where are the younger demographics, craved by these companies, allocating their screen time? YouTube.
The company is only beginning to flex its muscles when it comes to obtaining live rights via those billion-dollar agreements with leagues that usually last more than a decade. And that’s exactly what a company like Disney – heavily invested in the NFL, NBA, SEC football and the NHL – fears. Their competition isn’t other networks. It’s the tech giants, with Amazon included in that group.
NFL commissioner Roger Goodell has already said the league will attempt to renegotiate its 11-year deal worth more than $100 billion ahead of next season. The NBA agreed with three entities for around $76 billion for a broadcast deal that started this season. Amazon secured major rights within those deals. YouTube wanting to be next makes sense. Only so many companies are willing, or capable, of paying the rights fees. Google’s current market capitalization exceeds $3.3 trillion – it will be well-positioned to get involved at its leisure.
Leagues, fans caught in middle, but only the former has sway
Leagues are caught in the middle and have already tried to play both sides. The NFL, for example, aired the Week 1 game between the Kansas City Chiefs and Los Angeles Chargers on YouTube. But don’t fool yourself into thinking that the league is OK with a diminished rating for a Dallas Cowboys game, as will certainly be the case after their Nov. 3 game against the Arizona Cardinals missed YouTube TV viewers.
That’s just one example of the incestuous nature of this entire thing. ESPN’s “The Pat McAfee Show” pulled in 435,000 viewers on YouTube. It’s worth noting that YouTube TV is not the same as looking up videos or watching a live stream on YouTube, but it’s all part of the company’s sports strategy.
The tinfoil hat crew will say that the stalemate, from ESPN’s point-of-view, is about driving people to download and pay for the ESPN direct-to-consumer app (going at $30 a month or $300 per year). There’s no way the sign-ups during this past week – not that we’d ever see that data – would justify the standoff.
Mickey Mouse has enlisted its top lieutenants, from Scott Van Pelt to Adam Schefter and Mike Greenberg, to sound the alarm and sway public opinion with relatively inauthentic social-media posts. Maybe the issue will get through to one consumer or two. In the C-Suites where it matters? They’re wasting their character count.
Of all polities, the United States Senate has even called out the strain the continued segmentation has placed on consumers. Need we look for another sign of how out of control this has gotten?
Eventually, the games will come back on. A deal will be made. The only real effect will be more money coming out of fans’ pockets. Thank goodness for autopay.