NY Sports Fans No Longer Need Cable, MSG Now Available on DIRECTV NOW

DIRECTV NOW has added MSG Networks (MSG, MSG+) to its programming lineup, becoming the 2nd live TV streaming service to make the RSNs available nationwide. While news of the distribution deal broke back in September, the channels just became available to subscribers through the networks’ live streaming and video on demand platform, “MSG GO”. It should be noted that DIRECTV NOW subscribers within the greater New York metro area (and all of NY State), have access to all MSGN content (i.e. no blackouts).

Howie Long-ShortMSGN, spun off from MSG back in 2015, reported Q1 ’18 revenue grew 3% YOY (to $157 million). It’s not surprising to see the company simply plugging along, as 90% of MSGN revenue comes from affiliate fees; fees negotiated to span extended periods of time. Earlier this month, the company announced plans for a $150 million share buyback plan. DIRECTV NOW is an AT&T (T) subsidiary.

Fan Marino: The addition of MSG Networks (MSGN) gives DIRECTV NOW subscribers access to Knicks, Rangers, Islanders, Devils, Sabres, Liberty (WNBA) and Red Bulls (MLS) games. The OTT service also carries the YES network, home of the Yankees and Nets. NY sports fans (except for Mets fans) no longer need cable. Of course, once ESPN renegotiates the contracts for the 22 RSNs it acquired from FOXA and adds MLB games to ESPN+; Mets fans can join in on the cord cutting fun.

DIRECTV NOW Just Added MSG & MSG+

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NFL, Verizon Strike $2.5 Billion Deal, In-Market Games Now Available on All Carriers 

The NFL has signed a 5-year deal with Verizon (VZ), valued at $500 million/year, that enables the telecom giant to stream in-market and nationally televised league games (and access to on-demand content) to any mobile device, Oath owned web property (i.e. Yahoo (AABA), Yahoo Sports, AOL, Go90) or connected TV nationwide; regardless of carrier, beginning in January. The new deal provides VZ with the ability to sell select in-game ad spots, but does not include the exclusivity it enjoys under the terms of the expiring contract (4 years, $250 million/year). DirecTV (T) owns the rights to stream out-of-market games through the 2022 season.

Howie Long-Short: Verizon acquired Yahoo! earlier this year for $4.5 billion, combining its media and technology assets with AOL’s (which it acquired for $4.4 billion in 2015) to form Oath; a company with 50+ brands (which also include the Huffington Post, TechCrunch and others) and a reach of over 200 million monthly unique users in the U.S. VZ sees the NFL as valuable content it can spread across Oath platforms (more valuable than the exclusivity), with Brian Angiolet, Global Chief Media and Content Officer calling football “the marquee sport” to drive an audience. He’s right and that by a mile. The NFL is averaging 15.1 million viewers/game this season; the ’17 NBA playoffs on ESPN/ABC (1st Round – Conference Finals) averaged just 4.26 million.

Fan Marino: Verizon customers have had the ability to stream NFL games on smartphones since 2010, but the remainder of the league’s fans have been blacked-out while on-the-go. Revoking Verizon’s exclusivity will result in broader availability and ultimately increased viewership for the league; but it’s the fans who win biggest with this deal. Fanatics will never again miss a minute of game action, while the casual cord-cutting fan can continue to follow the league and his/her home team.

Verizon to pay NFL $500 million a year to stream games

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MWC Debating if TV Revenue and National Exposure Outweigh Late Kickoffs and Empty Stadiums

The Mountain West Conference has television contracts with ESPN (DIS) and CBS Sports (CBS) that are set to expire following the 2019-2020 academic year. In preparation for the next round of media rights negotiations, athletic directors around the conference have begun to debate if television revenue ($100 million over 7 years) and national exposure outweigh the drawbacks of late kickoff times and empty stadiums. At least one A.D. (Tom Burman, Wyoming) does not think the benefits outweigh the costs saying, “the money is not so great ($1.1 million/year per school) that we are willing to just play game times whenever TV calls”. The conference is currently performing studies to determine how television scheduling impacts game day revenue sources (beyond just ticket sales).

Howie Long-Short: Mountain West football games are valuable to the broadcast networks because they air in valuable late-night time slots. There is no value to a Mountain West game that’s scheduled opposite P5 games. Filling the stadium is nice, but even Boise AD Curt Apsey acknowledged “it would be very difficult for us to give up the TV money and make it up in ticket sales”. Mountain West games will be on television for the foreseeable future. CFB is an arms race and there is no chance that the Mountain West (or any other conference) is leaving television revenue on the table.

Fan Marino: The Pac-12 Conference has similar issues, albeit with far more lucrative television contracts ($28 million/school in ’16). ESPN slots their weekly Pac-12 game at 10:30p or 10:45p EST on Saturday evenings. When you combine those late start times with the games that air on the Pac-12 Network, which DirecTV (T) does not carry; it’s likely that east coast Heisman voters are unable to watch most of the conference’s games. That’s too bad. Arizona QB Khalil Tate (and Bryce Love) deserves to be in NYC. Here’s to hoping they manage to catch a game or two before the ballots are submitted.

Mountain West weighs TV money versus controlling game times

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A Streaming Service for the Sports Fan

Sports fans that are considering cutting the cord may want to look at the channel lineup for FuboTV; a sports-centric, OTT, live TV streaming service that offers fans the “most sports for the least money”. Originally introduced as a skinny bundle for soccer fans, the service now carries a variety of sports on 37 (of 65) channels (both regional and national) including; FS1, FS2 and NBCSN. The $40/mo. niche bundle is looking to stand out in a crowded streaming TV market that includes; Hulu (TWX), YouTube TV (GOOGL), DirecTV Now (T), Playstation Vue (SNE) and Sling TV (DISH). Amazon (AMZN) and Verizon (VZ) will also be introducing streaming bundles soon.

Howie Long-Short: FuboTV has raised $75.6 million to date, with several publicly traded companies investing in the streaming provider. 21st Century Fox (FOXA), Sky (SKYAY) and Scripps Networks Interactive (SSP) all participated the $55 million Series C round that closed in June; so there are no shortage of ways to play the OTT streaming service.

Fan Marino: FuboTV has 100,000 soccer-loving subscribers, but is counting on their next 100,000 subscribers to be fans of traditional American sports. The carriage deals they’ve signed to date have given them some valuable programming (like the World Series), but you can’t convince the American sports fan to cut the cord without ESPN’s network of channels. ESPN (DIS) holds the rights to the College Football Playoffs (and NBA) through 2025 and MNF through 2021. If your key differentiator as an OTT streaming service is your sports programming, you must carry those games. The success of the service, at least as it is currently marketed, depends on it.

The next 100,000 subscribers: FuboTV’s skinny bundle moves beyond live soccer

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YOUTUBE SIGNS ON AS PRESENTING SPONSOR OF WORLD SERIES; WILL PROMOTE CABLE-LIKE LIVE STREAMING SERVICE

Youtube (GOOGL) will be the presenting sponsor for the 2017 World Series; using commercials during the fall classic to promote YouTube TV, the company’s live cable-like streaming service. The ads will run on Fox (FOXA) during games, gain exposure across MLB’s digital platforms and be visible to fans within the stadiums in which games are played. YouTube TV, now available in 49 of the Top 50 markets for $35/month; targets sports fans with 40 channels (including ESPN (DIS) & Fox, the most watched sports channels on television). Financial terms of the deal were not released.

Howie Long-Short: The race to turn cord cutters into skinny bundle subscribers is picking up. Direct TV Now (AT&T’s (T) service) is trying to onboard subscribers by offering Netflix (NLFX) for just $5/month, while Hulu has made itself available through the X-box (MSFT) video game console. The goal of this campaign is to raise the sports fan’s awareness of the 6-month-old service, so having access to 40 million (2016 WS audience) engaged baseball fans gives YouTube the right audience. If the company can effectively convey that viewers will save +/-$100/mo. and still have access to “must see” sporting events, subscription numbers should spike. I would provide free access to YouTube TV during games, so that prospects can simultaneously compare video quality.

Fan Marino: The 2016 World Series was the most watched series in 25 years, so YouTube probably shouldn’t expect a repeat viewership numbers. As for YouTube TV, they have programming deals with ABC, CBS, and NBC (in addition to ESPN & FOX). In fact, you’ll get 80% of live sports programming with the bundle. Fans won’t get is the NCAA tournament though, as TNT and TBS aren’t included. No big deal, March Madness on Demand is free and carries all of the games.

YouTube Seeks Web-TV Boost Via World Series Sponsorship

DIRECT TV OFFERING NFL SUNDAY TICKET SUBSCRIBERS REFUNDS FOLLOWING ANTHEM CONTROVERSY

AT&T (T) subsidiary DirectTV is offering NFL Sunday Ticket subscribers offended by recent on-field player protests, the option to cancel the service and receive a full refund ($280). Sunday Ticket policy expressly states that refunds are not issued once the season begins, but the satellite provider has decided to make exceptions for customers who cite players kneeling during the national anthem as the reason for their cancellation. DirectTV does not intend on releasing the number of customers who choose to cancel the service.

Howie Long-Short: Sunday Ticket is DirectTV’s competitive advantage, so customers who cancel the NFL package may be inclined to cancel the satellite service entirely. With that said, I strongly doubt there are enough people, with strong enough convictions, to walk away from the NFL; to negatively affect revenues.

Fan Marino: I need to correct both Fox Business and President Trump for incorrect statements made. Fox Business referred to the players kneeling and locking arms as a “national anthem protest”.  The players aren’t protesting the national anthem, they’re protesting racial inequality and police brutality. As for Trump, he tweeted on Tuesday morning that “the booing at the NFL football game last night, when the entire Dallas team dropped to its knees, was the loudest I had ever heard. Great anger.” Fake News. He’s been to Jets games with Sanchez or Geno starting at QB.

DirecTV allows some NFL refunds after anthem controversy

TRADITIONAL TV TO LOSE ANOTHER 10.8 MILLION SUBSCRIBERS BY 2021

Kagan, a media research group within S&P Global Market Intelligence, is predicting that traditional pay TV companies (i.e. CMCSA, T) will lose another 10.8 million subscribers by 2021, while virtual services like Sling TV (DISH) and Playstation Vue (SNE), grow collectively to 11 million users. It has been estimated that 18 million households (14% of U.S.) will rely solely on over the top, self aggregated, online content, by that time. The news isn’t all bad though for traditional providers, as households with multichannel subscriptions are expected to remain the solid majority for at least the next 5 years.

playstation-vue-vs-sling-tv

Kagan Releases Multichannel projections through 2021

Howie Long-Short opines: 10.8 million more cord cutters, fully offset by 11 million OTT subs, in 5 years? This would probably be good news, at least for the cable companies that can charge streamers $100 for high-speed broadband.

Adam Dow-Jones comments: Has the furor over cord cutting gone to far I wonder? Not while these numbers continue to be abysmal. Mr. Dow-Jones smells some value in media though as market overprices these declines.

Fan Marino says: I’m literally just ESPN and ESPN2 away from making the move to FuboTV. Look at the channel lineup, what else do you need?