SPORTS Are distributors gaining upper hand?

Are distributors gaining upper hand?

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It’s starting to look like NFL games are not the hammer they once were in carriage negotiations.getty images

The DirecTV-Tegna carriage battle is not generating as many headlines as Charter’s negotiations in early September. But the negotiations around DirecTV and Tegna offer a window into the changing dynamics in sports media and suggest that some of the leverage in these disputes could be moving back to the distributors.

At the end of November, Tegna stations went dark on DirecTV. Tegna owns around 68 local broadcast stations that operate as affiliates of ABC, CBS, Fox and NBC, depending on the market.

For the past several decades, this type of dispute would have been resolved quickly — and almost always to the benefit of the broadcast stations. That’s because distributors like DirecTV knew they would lose too many subscribers if they blacked out NFL and college football games.

In this dispute, though, the loss of NFL games hasn’t phased DirecTV — at least not yet.

The first weekend that Tegna stations went dark, some DirecTV subscribers had no access to late-season NFL and college football championship games.

It is starting to look like NFL games are not the hammer they once were in these negotiations.

I asked DirecTV’s chief content officer, Rob Thun, about this changing leverage soon after the Tegna stations went dark. Thun laid all the blame for the lack of NFL leverage on the strategy of some broadcasters to make the game available on their direct-to-consumer streaming services.

CBS games, for example, stream on Paramount+. NBC’s “Sunday Night Football” streams on Peacock. Fox has made it a point not to stream its NFL games — a decision that could have helped Tegna. But Tegna has only six Fox affiliates, and those are in smaller markets.

Thun sounded confident that DirecTV could withstand college bowl season, especially since ESPN carries most of the bowl games. And he said the NFL playoffs didn’t concern him — again — because the broadcast networks will make those games available to their own streaming services, not to mention the fact that Peacock will carry an NFL playoff game exclusively.

Thun says he is not even daunted by the prospect of not carrying the Super Bowl in February. That’s because DirecTV still carries Nickelodeon, which will carry the game. Plus, fans have the option to stream the game on Paramount+.

If DirecTV is able to get through January — and the NFL playoffs — without Tegna stations, it would be the clearest signal yet that leverage in these negotiations has swung back toward the distributors in a big way.

John Ourand can be reached at jourand@sportsbusinessjournal.com. Follow him on X @Ourand_SBJ and read his weekly newsletter and listen to his weekly podcast. 

 

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