Hot-Take #3: The Future of the Bundesliga in the United States Beyond 2020

Right in time for Christmas, there was a happy second time for German Bundesliga in the United States for the 2018/19 season: Cracking the “Daily TOP150 Cable Programs” on linear television. With the table-topping match between Borussia Dortmund and Borussia Moenchengladbach on December, 21 scoring +/- 81,000 viewers on FS1, it was the second time after the season’s inaugural match between FC Bayern Munich and TSG Hoffenheim (+/- 97,000 viewers on 8/24) that the German top-flight soccer competition came somewhat close to the elusive 100k - mark which makes cable (or satellite) programs likely to be eligible for the ‘prestigious’ daily ranking published by ShowBuzzDaily. It should be noted that this list does not account for free-to-air national broadcast channels in the United States such as ABC, CBS, FOX & NBC, which provides usually much broader distribution for any given program.

After writing an extensive piece on the Bundesliga’s ambitions in the United States back in September (see: Hot-Take #1 - DFL und Bundesliga mit mangelnden Erfolg auf dem US-Markt), I kept a close eye on the Bundesliga’s recent weeks in the world’s biggest sports media market given the fact that I spent the last few months in New York.

Taking a step back, several weeks ago, I already made the case that revenues from domestic media rights in European football are going to both converge among the Big-5 (see: Blog #23 - Konvergenz bei den nationalen TV-Erlösen im europäischen Fußball) and reach somewhat of a natural ceiling over the next few years, absent of major changes to how to monetize media rights in their respective domestic markets (see: Blog #33 - Status Quo of Media Rights in European Football: Can we do better than No-Single-Buyer Rule?):

In 2018, the slight but inevitable downward correction for the English Premier League (in February/June: +/- 9.8%) coincided with modest to impressive increases across the board for the Spanish La Liga (in June: +/- 14.9% with 4 out of 8 rights still to be awarded), French Ligue 1 (in May: +/- 58.8%), and Italian Serie A (in June: max. +/- 13.8% including all variable compensation). By implication, international media revenue will not only become the biggest (only?) driver for sustaining the leagues’ impressive revenue growth over the past decade but become the real differentiator in European football - with the EPL and, to a lesser extent, La Liga positioned best when it comes to attracting overseas fans at this point in time. Unsurprisingly, there is also a newly-found interest by the German Bundesliga in the United States, the world’s biggest sports media market ... after pretty much neglecting the market until recently.

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Looking at the invested resources on behalf of the league and individual teams when it comes to any internationalization efforts, there has been an overwhelming (but somewhat incomprehensible) focus on Asia: For example, the league and individual teams had already opened a combined seven local dependances in the Asia-Pacific region before finally opening the first local league office in the United States in October 2017. Up to that point, FC Bayern Munich seemed to have been the only one who thought “America-First” outside their domestic market and the Bavarian club had actually some early success, truly building a North American fan base since opening its office on Madison Avenue in New York in late 2016. (see: Twitterpost)

Feeling the need to find untapped revenue sources - given a rather saturated domestic (media) market - in order to somehow close or at least not widen the revenue gap to its European peers, priorities for Bundesliga have obviously shifted and figuring out the new media rights strategy for North America has been immediately made the top priority inside the league’s US office. The initial enthusiasm from a few years about the activities in the Asian markets have clearly cooled down as most of the brokered partnerships (e.g. youth development programs) have not resulted in any short-term financial windfall but seem to be long-term plays at best (think: crack-down by Chinese government on capital outflow for FDIs in sports industry). North America, instead, is where the (immediate) money is and the newly-opened DFL Office should also serve as hub to jump-start any operations of other Bundesliga teams, absent of other alternatives (think: Lagardère’s US offices serving as temporary U.S. base for Borussia Dortmund) that finally want to tap into the world’s biggest sports market.

The 100,000-Viewer-Mark remains out of reach for any Bundesliga Match on U.S. Television To no one’s surprise, simply putting more emphasis on North America has not resulted in immediate success: Both in terms of TV ratings as well as the general discussion about the “growing sports” of soccer in the United States, there was not much to talk about when it came to the German top-flight soccer competition: I gave up tracking the weekly television ratings for Bundesliga matches on FS1 or FS2 at the end of October given the fact that no ratings are publicly available if the broadcast windows in question do not crack the “Daily TOP150 Cable Programs” published by ShowBuzzDaily - something which the Bundesliga did not achieve once between the first and last matchday of this season’s first half. It should be noted that the match between Borussia Dortmund and RB Leipzig on the first matchday (+/- 395,000 viewers on 8/25) has been by far the most-watched Bundesliga game of this season and will most likely remain at this spot throughout the rest of the campaign due to the fact that it was carried on Fox’s main free-to-air broadcast channel, which is the equivalent of a game being broadcasted by the public broadcasting services ARD or ZDF in Germany instead of being buried on Sport 1, or any other lesser-known sports channel for this matter. There is no other Bundesliga game expected to show up on “Big FOX” through the end of the season. The only other game viewership of record during the season’s first half has been a mid-week fixture between FC Bayern Munich and FC Augsburg on FS1 (+/- 64,000 viewers), which was sourced by World Soccer Talk through alternative channels given that the matchup was still far from making the “Daily TOP150 Cable Programs” (> 82,000 viewers) on said Tuesday (9/25)

However, purely looking at the potential distribution of Bundesliga games across FS1 (+/- 83.29m TV households) and FS2 (+/- 57.47m TV households), Germany’s top-flight football league is actually better positioned than most of its European peers including La Liga (think: plummeting distribution of beIN SPORTS amidst carriage dispute with Comcast, AT&T & Co. to effectively +/- 10m TV households), Ligue 1 (see: LaLiga), and Serie A (think: limited windowing on linear TV across ESPN2 but mostly living on ESPN’s OTT streaming service ESPN+ with +/- 1m subscribers in total). I looked deeper into the issues of the partnership between Fox Sports and the Bundesliga (think: lack of promotion, low priority to broadcaster’s overall top- and bottom-line compared to other sports properties) as well as the overall importance of the rights holder’s subscriber base of its television channels (= max. viewership potential) for any given sports property in my piece back in September, but the chart below (“Availability of Channels with Sports Programming in US Television”) should provide a rough understanding of the underlying mechanics.

EPL and Liga MX remain the most (only?) relevant club-football properties in the United States

Coming quickly back the second point I made above, the soccer as “growth sports” in the United States:

With the Major League Soccer going into its playoffs, there was a lot of buzz around Atlanta United recently: The just two-years-old franchise was already valued as the league’s most valuable team (+/- $330m) before it beat the Portland Timbers handily in the MLS Cup Final 2018 in front of a record-setting crowd of +/- 73,019 attendants in its home-stadium (Mercedes Benz Stadium) and +/- 1.56m television viewers of FOX’s game coverage (+71% vs. MLS Cup Final 2017) across the United States. (see: Twitterpost)

However, the MLS still struggles to find serious mainstream attention in its domestic market except for those last two to three weeks of the playoffs in November or December and the usual hype around its season’s start in early March, a time which is particularly light on any meaningful US sports with the NBA and NHL being deep into their daily grind of an 82-game regular season schedule and MLB as well as NFL in their respective offseasons. Instead, the English Premier League (EPL) and Mexican Liga MX continue to dominate the North American soccer landscape. The latter, in particular, is often underestimated by the mainstream media but the fact that Hispanics accounted for +/- 68% of total soccer viewership in the United States last year and Spanish-language networks usually draw about two- to three-times the television rating of the English-language broadcast for the same game (think: UEFA Champions League) provides evidence for the significance of Hispanics, whose share among the US population is only going to increase moving forward, for the future of soccer in the United States in general and the economic might of Liga MX in particular: For comparison, the recent Liga MX Gran Final Championship 2018 between Club América and Cruz Azul combined for +/- 4.8m viewers across both legs (+/- 2.3m on 12/13 & +/- 2.5m on 12/16) on Spanish-language broadcaster Univision.

Dominated by the EPL (NBC) and Liga MX (team-by-team broadcasting partners), the German Bundesliga (Fox Sports), Italian Serie A (ESPN), Spanish La Liga (beIN SPORTS) and French Ligue 1 (beIN SPORTS)as well as the domestic MLS (ESPN, Fox Sports, Univision) are often relegated to niche status - although for different and often complex reasons on a league-by-league basis.

Next to the EPL, which should not be expected to move anywhere else than Comcast-owned NBC once their current media rights deal (+/- $1.0bn in total over 6 years) expires after the 2021/22 campaign given that its parent company just acquired European pay-TV operator Sky PLC, which has incredibly deep ties (both financially and editorially) with the English top-flight football competition (latest evidence: EPL moves back from DAZN to Sky Deutschland in Germany starting next season), for a whopping +/- $39.0bn (equity value, +/- 15x EBITDA) in cash, the UEFA Champions League (UCL) is the second somewhat relevant European football property among the North American mainstream sports audience. But even the UCL has taken somewhat of step backwards during the current season with the English-language broadcast rights moving from Fox Sports to AT&T-owned Turner Sports, which is going to pay +/- $65m annually over the next three seasons: Since the newly acquired rights to the 340 games per season across the UCL and UEFA Europa League (UEL) are mainly leveraged to drive subscriptions for its new streaming service B/R Live, there is only limited windowing on its linear television channel TNT (47 games per season: 46x UCL plus UEL Final), especially compared to previous rights holder Fox Sports who broadcasted a total 147 live games across FOX, FS1, and FS2 as of last season. Secondary sports increasingly moving behind the paywall is an inevitable consequence of the required dual revenue-model of advertising and subscription revenue to have any chance to successfully refinance skyrocketing rights fees for live sports. On the other hand, the resulting limited visibility for sports in certain markets in which they had to fight for any attention by consumers and sponsors to begin with certainly does not help to grow any sports. Television ratings for the UCL on TNT are down significantly compared to last season.

The Importance of Broadcasting Partners of European Football Leagues in competitive U.S. Sports Market dominated by ESPN

Given the lack of overall success and past track record, the Bundesliga having recorded just the second “Daily TOP150 Cable Programs” - listing since the start of the season on either FS1 or FS2 seemed newsworthy to me. Nonetheless, there are some caveats to this achievement once someone considers the fact that usually at least +/- 100,000 viewers are required to make the 150 most-watched programs on every given day on U.S. linear cable television:

The Bundesliga certainly benefited from a lower barrier to crack Friday's “Daily TOP150 Cable Programs” from two weeks ago, coming in on the 149th place (+/- 81,000), as the required viewership was notably lower than usual (+/- 61,000 viewers on 21/12). One potential explanation: It was greatly suppressed by multiple hours-long CFB Bowl Games that did not have the biggest names in it (think: not drawing an overwhelming share of overall television viewership) but diminished the number of total cable programs competing for the 150 most-watched broadcast windows. Additionally, Fridays are generally light on television viewing in the first place with the cut-off value for the week before (+/- 90,000 viewers on 12/14) and two weeks ago (+/- 76,000 viewers on 12/7) also hovering below the usual 100k - mark.

• 1️⃣ NBA REGULAR SEASON 🏀: NEW ORLEANS/LA LAKERS [ESPN, 10pm] ➡️ 1,867,000

• 2️⃣ NBA REGULAR SEASON 🏀: MILWAUKEE/BOSTON [ESPN, 8pm] ➡️ 1,643,000

• 3️⃣ COLLEGE FOOTBALL BOWL GAME 🏈: WESTERN MICHIGAN/BYU [ESPN, 4pm] ➡️ 1,372,000

• 4️⃣ COLLEGE FOOTBALL BOWL GAME 🏈: FLORIDA INTERNATIONAL/TOLEDO [ESPN, 7pm] ➡️ 838,000

• 5️⃣ COLLEGE BASKETBALL REGULAR SEASON 🏈: OREGON/BAYLOR [ESPN2, 7pm] ➡️ 290,000

• 6️⃣ NHL REGULAR SEASON 🏒: BUFFALO/WASHINGTON [NBCSN, 7pm] ➡️ 278,000

• 7️⃣ ENGLISH PREMIER LEAGUE ⚽️: LIVERPOOL/WOLVES [NBCSN, 3pm] ➡️ 222,000

(Top live sports programs on cable/satellite television channels on December, 21)

Looking at the competition that the Bundesliga faced for the viewers’ eyeballs on December 21, two things clearly stand out: First, the small share of live game broadcasts (8 out of 150 programs) due to the aforementioned lengthy NCAA football bowl games and light game schedule otherwise. Still, at least the second half of the Bundesliga match went head-to-head with EPL-frontrunner Liverpool FC playing against 7th-placed (or ‘best-of-the-rest’) Wolverhampton Wanderers on NBCSN (+/- 222,000).

Second, the continuing dominance of ESPN on cable television when it comes to live sports on that particular day or in general: Despite all the doomsday scenarios regarding the self-proclaimed “Worldwide Leader in Sports” amidst skyrocketing rights fees, increased competition from digital media companies on the sports rights market, and changing consumption habits, there is a reason why Disney’s flagship sports channel continues to be able to command more than three times as much for each subscriber (+/- $7.86 per month) from cable or satellite television distributors (so-called “Multi-Video Programming Distributors” such as Comcast, AT&T, Altice & Spectrum) as the next ‘most-valuable’ pay-TV channel on national television (TNT, +/- $2.09 per month) in the United States.

More: With three weeks left in the TV ratings year of 2018, ESPN averaged by far the highest total day viewership (+/- 720,000 viewers) among all sports-carrying channels and, even before the College Football Bowl season, ESPN has aired 17 of the 20 most-viewed cable TV programs in 2018, including all of the top six broadcasts.

What those television distributors get in terms of viewership, which in turn can be then be monetized on the advertising market, for what they are paying on a channel-by-channel basis (think: Cost-per-Mille) is a question for another day, but NBC Sports Network, carrying NHL, EPL, and NASCAR among other sports properties, seems to be the best bargain for MVPDs at this point in time. (see: Twitterpost)

Regardless of the limited competition by other live sports events on a random Friday in December and the fundamental issues of the partnership between the Bundesliga and Fox Sports, let's celebrate the small successes as the league overall continues to lack momentum in the biggest sports media market and look ahead into the future: The looming end of Bundesliga’s broadcasting partnership with Fox Sports. I summarized my thoughts in a recent thread on Twitter, on which I will elaborate a little bit more below.

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1️⃣

In wake of offloading most of its entertainment assets (e.g. 20th Century Fox Film and TV studios, Fox Television Group, Asian satellite TV group STAR, 30% - stake in streaming service Hulu) plus its 22 regional sports networks (RSNs) as well as the 39% - stake in British pay-TV operator Sky PLC for +/- $71.3bn (cash + stock), the future of Bundesliga’s current broadcasting partner, commonly dubbed as “New FOX,” will be a slimmed-down (i.e. Fox News, Fox Business, and Fox Sports channels as well as it self-owned and -operated local affiliates) and greatly different version of 21st Century Fox: With scripted content and other non-time-critical content (e.g. documentaries) increasingly moving in the video-on-demand space, “New FOX” seems to have determined that news and premium live sports are the only two genres left that are able to reliably serve as appointment television in the linear ecosystem. At least, Netflix’s co-founder and CEO Reed Hasting seems to agree with Rupert Murdoch’s game plan for the network’s future with this (somewhat self-serving) statement: “New Fox appears to have a great strategy, which is to focus on large simultaneous-viewing sports and news. Other linear networks are likely to follow this model over time,” via CNBC (2018). In other words: Give up, just focus on news and sports. And that seems exactly what “New FOX” is going to do moving forward. Just during the time after having decided to sell most of its entertainment assets in December 2017, and by implication opting against going head-to-head with Netflix in the entertainment space moving forward, “New FOX” shelled out billion-dollar long-term deals for live sports programming of the NFL Thursday Night Football (+/- $3.3bn over five years, started in 2018), Premier Boxing Champions (+/- $200m over 4 years, started in 2018), WWE SmackDown (+/- $1.0bn over 5 years, starting in 2019), and MLB (+/- $5.1bn over 7 years, starting in 2022) as well as smaller but still significant deals including for the Liga MX, which continues to tender its broadcasting rights on a team-by-team basis: Regular season games of Club de Fútbol Monterrey (started in July 2018), Club Tijuana (starting in July 2018), and Santos Laguna (starting in July 2019), for example, have joined the Fox Sports lineup recently.

The implication for the Bundesliga: Airtime on Fox Sports’ national airways, not only for live broadcasts but especially for any promotional or shoulder programming that would be necessary to build-up the Bundesliga, could become a scarce resource for Germany’s top-flight soccer competition soon. Failing to draw any meaningful viewership figures certainly does not support the case for the Bundesliga when programming decisions are made.

On the other hand, there are also factors that could take the current partnership beyond its current expiration date during the summer of 2020: First, “New FOX” has committed +/- $400m to the Men’s (2018 & 2022) and Women’s (2017 & 2021) FIFA World Cups through 2022 and extended that agreement with the FIFA through 2026 under unknown and somewhat but certainly costly terms. The nine-figure investment has not gotten off to a good start given the failed qualification of the USMNT for last year’s Men’s World Cup, with Fox probably booking a financial loss on last year’s tournament. Against the background of the lowered commitment to soccer in general in favor of more high-profile live sports in the eye of the U.S. sports fan, “New FOX” could run into problems to retain much of its on-air talent and commentators given the lack of regular spots and practice in-between those marquee one-off events. The company carried 32x MLS games from March through September during last year’s MLS season (7x FOX and 25x FS1) and will continue to do so at least through 2022. However, the Bundesliga provided valuable inventory during the weekend’s early-morning hours, as do other European football leagues for U.S. broadcasting channel in general. The most likely alternative for those broadcasting windows without the Bundesliga seems blatantly uninspired: re-runs of Fox Sports’ rather unsuccessful (but inexpensive) stable of daily live studio shows (think: “Skip and Shannon: Undisputed” or “The Herd with Colin Cowherd”). That would assume that “New FOX” is not going hard after a one-to-one replacement for the Bundesliga and with the EPL, whose deal with NBC does not expire before 2022, being unlikely to switch broadcasters anytime soon, the Spanish La Liga could become an obvious target once its own troubled partnership with beIN SPORTS is over after the 2019/20 season.

Note:

Live studio shows during weekdays on FS1 or FS2 such as “Skip and Shannon: Undisputed” or “The Herd with Colin Cowherd” still draw +/- 150,000 - 200,000 viewers for multiple hours each. Given the low costs of such studio shows (e.g. salaries, production costs) compared to rather expensive rights fees for live sports, there is actually an argument to be made to replace a low-watched Bundesliga with similarly-drawing re-runs without any marginal costs, if there is no shot at more attractive live content for those early-morning windows such as the La Liga. The Spanish league constantly drew much higher ratings than the Bundesliga before beIN SPORTS was dropped by several MVPDs in recent months.

Retaining proven on-air talent such as Ian Joy, Stuart Holden, Keith Costigan, Warren Barton, or Rob Stone beyond 2020 could become difficult without the Bundesliga, the only real club-football league on Fox Sports to begin with, the recent loss of the UEFA Champions League to Turner Sports, and only the marquee, but cyclical FIFA World Cups on the horizon. Additionally, simply re-assigning commentators to the growing lineup of Liga MX games is easier said than done given they are naturally less-educated on Mexican football and the required skill sets can differ greatly, often speaking to completely different audiences.

As we have seen, there are arguments for and against extending the current broadcasting partnership beyond next year on both sides, but matters could become even more complex when looking at the grand scheme of things.

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2️⃣

First and foremost, it should be noted that the business relationship between the Bundesliga and 21st Century Fox goes far beyond the United States: Both entities signed a landmark multi-territory five-year deal in 2014 that kicked in with the 2015/16 season and initially covered +/- 80 territories in addition to the United States, including every country in North and Latin America, a majority of countries in Asia (e.g. Indonesia, Thailand, and Japan) as well as selected European territories (e.g. Italy, Netherlands, and Belgium). And although the Bundesliga has taken a more proactive approach to its internationalization efforts ever since its rebranded its in-house marketing and sales unit into “Bundesliga INTERNATIONAL GmbH” in 2017 - clearly expressing the league’s growth focus going forward - and seems to prefer direct relationships with local broadcasters instead of relying on intermediaries such as rights agencies (e.g. MP & Silva, IMG) or multinational pay-TV operators (e.g. 21st Century Fox, beIN SPORTS), Fox Sports continues to hold or sublicense international rights in +/- 40 territories to this date. By implication, the pay-TV operator continues to be the most important strategic (and financial) international partner of the Bundesliga and accounts for large chunks of the league’s total international media rights revenue (+/- €220m in total per season).

Note:

I would not rule out the Bundesliga not only preferring direct relationships with third-party local broadcasters but really going direct-to-consumer with its own OTT streaming service in a few selected (smaller) markets pretty soon. The majority of international media rights, however, should remain with local broadcasting partners, especially in the most important overseas markets with viable options for external distribution, since any monetization of a self-operated OTT service should be challenging at the beginning. The technical development of such an in-house solution for a streaming service is ongoing for some time now.

I am not saying that both parties cannot compartmentalize their business needs across different markets, instead, I wanted to emphasize how deep the ties between 21st Century Fox and Bundesliga have developed over the past few years - despite some obvious hiccups and missteps along the ride. The most likely scenario: A mutually agreed-upon break-up in the United States to everybody’s benefit while maintaining or even extending the broadcasting partnership in selected territories in which Fox Sports provides valuable large-scale distribution and the Bundesliga, or European football in general, is more established among the local audience (think: Latin America). (see: Twitterpost)

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3️⃣

Finally, there is the question of the league’s future broadcasting rights holder in the United States, as I do not expect the Bundesliga going direct-to-consumer in the world’s biggest media market anytime soon due to aforementioned challenges to monetize such as product in markets in which the sports property has options for comprehensive distribution through third-party rights holders in exchange for eight-figure rights fee per year while lacking any following beyond a few hardcore fans.

At the same time, and despite some high-profile and expensive rights acquisitions over the past few months, newly-launched streaming service DAZN continues to be in dire need for complementary content next to marquee, but highly cyclical boxing (think: Golden Boy Promotion, Matchroom Boxing) and MMA (think: Bellator) events. Theoretically, the cyclical nature of marque one-off combat events, which were primarily monetized through the “Pay-per-View” - model in the past, make the pure-sport live and on-demand streaming service a poster child for being susceptible to high churn of its free-trial customers. Therefore, more regularly-scheduled live inventory in addition to original content (think: documentaries) and content-unrelated initiatives (think: customer retention management) will be vital for the platform’s long-term success. With one or two sub-licensing agreements with current sports rights holders (think: NBC, ESPN, FOX, Turner Sports) probably announced soon to provide a short-term fix for the current lack of content, DAZN seems to be a logical landing spot for the Bundesliga (as well as La Liga) starting with the 2020/21 season, with initial discussions probably kicking off pretty soon.

Ironically, DAZN has been characterized by an extremely broad and deep content library in its other active markets (think: Germany, Canada, Italy & Japan), making the top-heavy rights portfolio in the United States somewhat of an uncharted territory for the two-and-a-half-years-old B2C segment of the DAZN Group, formerly known as Perform Group.

DAZN should be the odds-on favourite to be the future home of the Bundesliga in the United States (and for some of Fox Sports’ current on-air talent, leaving a big hole in the lineup of “New FOX” for the upcoming FIFA World Cups), which should come even less surprising considering the fact that the streaming service is all but certain to become the league’s domestic live broadcasting partner next to Sky Deutschland in Germany once the 2021/22 season kicks off. I laid out the case for the inevitability of this scenario multiple times in the past, both on Facebook (see: Discovery’s Pivot to Multi-Territory, Long-Term Rights Partnerships) and on OFFTHEFIELDBUSINESS.de (see: Blog #33 - Status Quo of Media Rights in European Football: Can we do better than No-Single-Buyer Rule?). Turner Sports’ B/R Live, spending already big-time on exclusive English-language rights to the UEFA Champions League, and ESPN’s stand-alone streaming service (ESPN+), which has seemingly tried to establish itself as the “Home of Soccer in the United States” (e.g. Serie A, Chinese Football League, English Football League, FA Cup, Dutch Eredivisie, United Soccer League, and MLS Pass) should also be somewhat interested in the German and Italian top-flight football leagues. Given that both streaming services are already much further along when it comes to building its (long-tail) content library thanks to months-long headstarts in the North American market compared to DAZN, the London-headquartered company should feel a much greater sense of urgency in this regard though. At the same time, NBC’s pure-sports streaming service called “NBC Sports Gold” has added a number of other lesser-known sports (think: skiing, motocross) over the past few months, a niche which DAZN also tried to occupy in other markets. In other words, the clock is ticking for DAZN, with the unavailability of live sports rights in the United States, from niche to premium sports properties, at the time of the company’s market entry having been a serious challenge. A trend in favor of DAZN, and any other streaming service for this matter: The increased aggressiveness of original rights holders when it comes to carving out additional digital rights packages to (near-)live highlights or even full-length broadcasts. (see: Twitterpost)

The question will be how sustainable this newly-discovered revenue source for leagues will be. At least some backlash on behalf of current rights holders should be expected pretty soon (think: undermining existing audience, ability to monetize costly-acquired live rights).

"The NFL should remain out of reach for DAZN comes 2021/22 but expect John Skipper to be at the table with the Big Boys."

With Bundesliga/DAZN seemingly being a match made in heaven, I also want to quickly tackle the elephant in the room: the NFL. With all five linear television rights packages (think: TNF, Sunday’s NFC & AFC packages, SNF, MNF) back on the market until 2022, executives in the offices of prospective bidders are probably right in the middle of running their spreadsheets and preparing their pitch to the NFL for negotiations that should kick off at some point next year … with DAZN being among them. Ultimately, however, I do not see DAZN getting its hands at live games of the market’s biggest sports property anytime soon for several reasons, which, as a result, greatly elevates the importance of the Bundesliga (and La Liga) to DAZN going forward: First, regardless of how deep everybody thinks DAZN’s (and by proxy Leonard Blavatnik’s) pockets are, the fact is that the streaming service already has committed a high nine-figure sum over the next few years in the United States alone. It should only be right to assume that large chunks of the budget allocated for rights fees in the U.S. have already been spent: The big splash, that was necessary given the complete newness of DAZN’s brand in the United States, has been made, but nobody should expect the spending spree on rights acquisition to continue at the same rate moving forward. Instead, it is all about being at the table for DAZN when it comes to the NFL, with benefits for every party involved:

For the NFL, the league would benefit greatly from having more (viable) bidders than chairs (read: rights packages) which would prevent any automatic bids, probably the worse situation for any original rights holder to be in. For DAZN, being at least in consideration for a premium property such as the NFL just two years after launching in the U.S. (think: ESPN’s “Monday Night Football” - package in 2021) would inevitably provide a great amount of legitimacy and credibility to the DAZN brand that can then be leveraged for other, lower-tier live broadcasting rights such as the MLS, which are back on the market after the 2022 season.

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