Hugh Scallon’s Post

I couldn't allow the week to end without commenting on the NFL deal to stream Christmas Day games on Netflix. Last year the NFL broadcast on Christmas Day for the first time (outside a Sunday) in a space traditionally held by the NBA. Needless to say its audience blew the NBA away, and being the NFL, it has now exploited rapidly a new revenue stream by carving out a Christmas Day package for Netflix. First of all this shows the power of the NFL - in any other sport its broadcaster contracts would clearly define what other rights it can exploit. Either the NFL carved out Christmas Day when it was doing its major broadcaster deals (in which case why did no one bid then?), or it has the freedom to add additional packages as it sees fit. This comes off the back of the successful NBC/Peacock streaming of a playoff game last season, and its Amazon Thursday night package. From an NFL's perspective, increasing the number of exclusive streaming packages is the way to maintain its upwards rights fee trajectory, especially given ESPN's falling subscriber base which has to inevitable feed through to its ability to pay for rights. The EPL will be taking note. But why Netflix? Following Tyson v Paul Celebrity Boxing (I fear for Mr Paul) and WWE Raw acquisitions, now an NFL experiment. The Netflix juggernaut is slowing and needs some more gas. It got a boost from Covid, then removing sharing options, and then a new Ad tier. But all these innovations can't hide the fact that its early markets trend subscriber growth is slowing (Netflix will stop reporting subscriber numbers next year, always a sign of problems), and content consuming is falling (people have seen everything apart from the new stuff itself limited by the writers strike). And how many more "Drive to Survive" copies can we cope with? In the past Sport has been a driver of new distribution platforms but it was drama for the streaming platforms. Something that caused the likes of Sky Sports and Disney to reduce their dependence on live sport. However, people still watch sport in greater numbers than anything else. It is regular, it attracts a younger more male demographic (Netflix is female skewed), and it is unscripted so can be watched year after year. Prime is a marketing tool, Apple TV supports hardware sales (though this is shifting). But Netflix has is wholly dependent on content sales. Rather than be surprised by Netflix's move into sport, we should be surprised its taken it so long. Who is next? https://lnkd.in/eU93fWmp

From THR: Neither side commented on the cost of the games, but one source estimates to The Hollywood Reporter that this season’s pair cost about $75 million apiece. That would be consistent with what Netflix finance vp Spencer Wang told a MoffettNathanson conference shortly after the deal was revealed. “I would characterize each game as roughly the size of one of our medium-sized original films,” he said, adding that it would have “no impact on our operating margin guidance for this year.” For Netflix executives, it was probably an easy call to make — two midsize movies or two NFL games, which not only have the benefit of a built-in audience of millions but also plenty of advertising breaks to grow that side of the business. For a company that has been laser-focused on engagement and time spent, the deal is only too logical. JPMorgan analyst Doug Anmuth wrote May 15 that the deal “compares favorably” with those cut by Peacock and Amazon for their playoff and Black Friday games, respectively, each of which were estimated at about $100 million. And while Netflix sources continue to insist that it is not in the live #sports business — at least not in the sense of wanting giant long-term rights packages — the company is very much engaged in the live events business, an area where it has been building a regular cadence. The Netflix Cup and Netflix Slam exhibition golf and tennis matches were baby steps, with the recent Tom Brady roast building on that. If Netflix was crawling before, it appears ready to sprint now. Of course, not all analysts are quite as enthusiastic about the prospect. “We don’t think Netflix needs the consumer exposure that sports bring, though such a move would likely bring some incremental subscribers,” Morningstar’s Matthew Dolgin says. “We believe Netflix should avoid going down a path that could put it in a similar position as the legacy #media companies, where it feels compelled to retain sports rights with costs that become an outsize portion of its content budget.” Of course, at the right price, it is hard to ignore. For the NFL, the deal with Netflix is multifaceted. For starters, the league has made global expansion a top strategic priority, with games this season being played in the U.K., Brazil and Germany. Netflix is the largest subscription streaming service in the world, with scale on nearly every continent. “It’s a global opportunity for us where I think we’ll speak to fans in a unique way,” Schroeder says. And perhaps more importantly, it expands the number of rights partners for the National Football League (NFL) , a league where executives are obsessed with how technology is changing consumer habits. “The #technology is changing. The platforms are changing. The economy is changing. We have to be ahead of that strategy at all times so that we are where our fans are, on the platforms they want to be on,” Goodell told THR in a cover story last year. #advertising

🚀 New Analysis Alert: ESPN Bet’s Rocky Start 🚀 Penn Entertainment’s ambitious venture into the U.S. sports betting market with ESPN Bet has been a rollercoaster. From promising initial market reactions to financial challenges and fierce competition, ESPN Bet’s journey is packed with insights and lessons. 📉 Our latest in-depth analysis covers: • The ambitious launch and initial market performance. • Financial struggles and operational hurdles. • Key market share benchmarks and strategic investments. • Long-term viability and what the future holds for ESPN Bet. Read the full story and discover the challenges and opportunities that lie ahead for ESPN Bet in the U.S. market. 📊

RSNs are Taking a Dive. Regional Sports Networks (RSNs) are facing significant challenges and appear to be in decline, but they are not entirely a thing of the past yet. Here's an overview of the current situation: The Decline 🔌Millions of Americans are abandoning traditional cable packages. 💵RSNs cannot afford to operate. For example, Diamond Sports Group, the largest RSN operator, filed for Chapter 11 bankruptcy in 2023. 🧾Constant contract disputes between broadcasters and cable providers have led to blackouts, frustrating fans. Networks Today 🔵Some RSNs are still operating, such as YES Network (New York), NESN (Boston), and Marquee (Chicago). ⚾12 MLB teams still have RSN rights with Diamond Sports Group. The Future of Sports Broadcasting 💻Direct-to-consumer models: streaming subscriptions. 📢League involvement: Leagues taking more control over broadcasting. 🌐Tech giants: Potential involvement from companies like Netflix, Amazon, or Apple 📣COACHES CORNER 🎙️ “The RSN situation today reminds me of the decay in local newspapers that has been going on for 20 years. Yes, the technology is changing, but the cataclysms come from new, emergent business models.” —Eric Spitz, Chairman of FanUp.ai Questions to Ponder ❓How will the consumer experiences of streaming services compare to those of RSNs? ❓ ❓Which RSNs stand out for their innovation and ingenuity? Does that matter, or will all of them receive the same fate? ❓ ❓Which streamers are likely to dominate the competitive landscape? Is size the only thing that matters? ❓

Jake Paul vs. Mike Tyson on Netflix – My Scorecard Premise: Expected: Gen X vs. Gen Z. A clash of eras, where the true 1980s bad boy would obliterate the brash influencer. Reality: A spectacle-driven event prioritizing entertainment over boxing quality. Highlights: Most Powerful Moment: A subdued yet iconic Mike Tyson, clad in a striking jacket, making his entrance. His presence alone carried a gravitas that reminded viewers of his legendary stature. Commentary Team: Despite Roy Jones Jr., the commentary team struggled to balance celebrity appeal with professional sports analysis. This blurred the lines, especially during the mostly excellent undercard fights, which deserved a higher caliber of insight. Picture an NFL or Premier League match where the commentators fail to articulate which team is winning or explain the strategies at play—it was jarring. Branding Opportunities: Netflix’s foray into live sports should have been an ideal platform for innovative brand integration. Yet, the execution was underwhelming. Standard beer, energy drink, and betting tie-ins felt stagnant, like relics of 1990s marketing. The visual branding lacked ingenuity, missing a golden opportunity to showcase modern, interactive advertising formats that could resonate with a global audience. Visual Production: The camera work felt uninspired and at times clunky, with operators visibly struggling with bulky equipment. The event’s supposed atmosphere—72,000 fans roaring in the arena—was barely conveyed. Aside from a few wide shots, the production felt more like a staged studio event with minimal crowd energy. The outdated portrayal of the "ring girls" further detracted from the event, feeling like an unnecessary regression. Streaming Issues: Netflix’s entry into global live sports streaming was marred by technical challenges, with widespread complaints of buffering and outages. While it’s clear this was a test for future scalability, the lack of preparedness for an event of this magnitude was disappointing. Switching between devices helped mitigate some issues, but it underscored the need for significant improvement. Overall Impression: Despite its flaws, the fight was a global talking point—a win for Netflix and the promoters, especially Jake Paul’s team. The event demonstrated the potential of live sports streaming on #Netflix but highlighted glaring gaps in execution. For future spectacles, there’s room for creativity and technological evolution. Perhaps next time, the Paul brothers will take on an AI-generated version of 1980s Iron Mike—brought to you by a truly innovative brand partner. Scorecard Premise: 7/10 – Spectacle over sport, but entertaining. Commentary: 5/10 – Lacked professional sports analysis. Brand Integration: 4/10 – Missed opportunity for innovation. Visuals: 5/10 – Standard and uninspired. Streaming Performance: 3/10 – Technical issues were a major distraction. Overall Event Impact: 8/10 – Despite flaws, a global conversation starter.

Not EMARKETER giving me the mic to talk 👀 in their latest piece, I chat about how brands can make the best of a gameday glitch. From Netflix’s Love Is Blind “live reunion” meltdown to the infamous Mike Tyson vs. Jake Paul broadcast glitch, we’ve all seen how quickly things can go sideways. And with Netflix’s NFL Christmas Gameday (featuring Beyoncé at halftime!) just around the corner, brands need a strategy to shine—even if the stream doesn’t. Here’s how to turn chaos into your moment: ✨ Prepare Like It’s the Super Bowl Have pre-approved content templates, tone guides, and creative assets ready to go. Align legal and creative teams early to avoid game-day delays. 💡 Social Listening is Your MVP Monitor TikTok comments, Threads, and YouTube streams alongside hashtags to anticipate trending conversations. Build a keyword list for top themes (hello, Beyoncé and holiday vibes). 🔥 Embrace the Unpolished A witty, raw response can outperform a million-dollar polished ad. Empower community managers to take bold, calculated risks—real-time banter wins hearts. 🎯 Turn Glitches Into Gold Use downtime to entertain with mini-series updates or “how it should’ve gone” parodies. Engage audiences with polls, memes, and lighthearted holiday content to keep them hooked. The brands that win aren’t just fast—they’re bold, strategic, and human. When chaos is expected, the opportunity is to lead, not just react. thank you Emmy Liederman for including me. - 👋🏾 I'm Jazmin, founder of que lo que? —the agency where scrolling, eavesdropping, & social listening are our thing. | visit queloque.co 🌟

Yesterday, after hearing a discussion on Talk Sport, my partner Luke (an avid sports fan!) asked me if the EPL going in-house would mean we need yet another subscription to watch his favorite sports. Currently we have Sky Sports, TNT & Amazon Prime. Is Premflix next? I told him it's a great question and a topic our industry will discuss at length!😅 We know that moving to DTC is no small feat—it demands serious infrastructure, technology, and staff. But hey, it could bring in plenty of revenue and be a strong bargaining chip in rights negotiations. So, we’ll have to wait and see. Regardless though of whether Premflix becomes a reality, most consumers won't find it easy to cut down on their sports streaming expenses. After all, sports fans, much like our household, tend to enjoy a variety of sports, including football, golf, F1, and more. In an era where sports fans are juggling multiple subscriptions, the conversation about streamlining access and costs is more relevant than ever. Will we see a future where one subscription covers all, or will the landscape become even more fragmented? We'll be watching closely. I dread to think what Luke would pay for an 'All-Sports-All-Access-Gold-Plus' subscription! 😂

The NBA officially rejected Warner Bros. Discovery's $1.8 billion per year offer to continue its longtime relationship with the league, and is instead entering a deal with Amazon. For the tech giant, the deal helps fill a hole in its already-giant advertising business, while serving as a nice addition for Prime members who are sports fans but who might occasionally dabble with the thought of dropping the service. The risks on the other hand, whether monetary or related to internal politics, appear relatively minimal for a company valued at $2 trillion. If you’re Amazon CEO Andy Jassy, you probably do this deal 10 times out of 10, even at the steep cost. As Fortune's Jason Del Rey writes, this deal is "more about playing defense with Prime membership numbers, not offense." Read more of Del Rey's analysis here: https://lnkd.in/eQPJ39CA

It's the sports streaming joint venture that's got everyone talking - and not in a good way. "Spulu" (or "Hulu for Sports" as some call it) is facing a mountain of questions and concerns from lawmakers, sports leagues, and competitors alike. And if you ask me, this consolidated streaming Goliath is poised to be a major headache for consumers and the industry as a whole. 🚨 Key Takeaways: - Two high-powered Congressmen are demanding answers from The Walt Disney Company, Fox Corporation, and Warner Bros. Discovery on the pricing, intent, and anti-competitive impacts of "Spulu" - The venture is already facing a DOJ antitrust inquiry and a lawsuit from fuboTV Network - not a great look for something that's supposed to be the sports fan's dream - With major sports rights like the National Football League (NFL), Olympics, and college sports missing, "Spulu" is shaping up to be more of a sports media nightmare than a dream come true At the end of the day, this alliance reeks of corporate overreach and a blatant power grab. As the lawmakers put it - without more transparency, we're concerned this will result in "higher prices for consumers and less fair licensing terms for sports leagues and video distributors." Sounds to me like the sports media landscape is about to get a whole lot messier. Buckle up, folks. The future of sports streaming is looking increasingly uncertain.