Off-Shoring, Broadcast Regionalization is Hurting U.S. Sports Leagues
Domestic media rights - for all four of the major U.S. pro sports leagues - are almost certain to increase in value during the next round of negotiations (all will ink new deals between ’22 and ’25). The future becomes less certain for the following rights cycle with cord cutting continuing to accelerate and with the cable bundle on the verge of a collapse. Common sense suggests that the NFL, the NBA, the NHL and MLB could hedge against a potential decline in broadcast revenues - and ensure their respective pies continue to grow - by developing passionate fan bases overseas, but a pair of prominent U.S. based Spanish-speaking broadcasters tell JohnWallStreet that none of the four have been willing to invest the resources necessary to reap the potential long-term rewards. “[The big four] have all been content to simply put their products out there and to hope that fan growth occurs organically.”
Howie Long-Short: Understanding the rules of the game is the first step to becoming a fan, so one would think that the four pro sports leagues would insist their games are carried in each foreign market’s native tongue - but that’s not the case. Even though only +/- 5% of the world speaks English as a first language (360 million people), most of the big four sporting events shown abroad are broadcast in the dialect. It’s not as if international fans can study the sports’ bylaws on their own time, either; the NBA, NHL and MLB rulebooks do not exist in any other languages and the NFL rulebook can only be found in English and Spanish (and that’s a recent development).
Familiarity with the rules aside, the NFL, the NBA, the NHL and MLB are fighting an uphill battle in most overseas markets where soccer is the sport of choice and receives top billing - both in terms of reach and quality - on television. As a result, even when games from the U.S. leagues air in the local language, the drop-off is often obvious to the viewer (in some cases announcers are doing straight voice-overs, in others there won't be a pre-game show or half-time show). As one of the Spanish broadcasters we spoke to stated, “the big four isn’t going to convince new fans to invest in their games when their broadcast partners are putting forth a subpar product” (see: Sergio Dipp's disastrous debut as a Spanish game analyst during the 2019 NFL season opener).
It’s hard to blame the leagues’ broadcast partners for cutting corners on content that isn’t generating returns - it's simply an economic decision for them, but the off-shoring of broadcast production and the subsequent elimination of broadcast specialists (i.e. announcers focused on a single sport) hurts prospective fans and ultimately the U.S. based leagues. “[While it remains an industry standard for sports other than soccer abroad], you simply cannot cover a sport properly from a different country. Announcers need to be able to talk to and interview people locally to really have a pulse on the league.” The regionalization of broadcasts has also hampered distribution (think: for Fox and ESPN - Mexico handles production for Northern Latin America, Argentina oversees production for Southern Latin America). Because neither of those regional outfits makes the effort to be pan-regional, “games out of Mexico are getting buried on marginal channels with limited distribution in Argentina and vice versa.”
The NFL, the NBA, the NHL and MLB could push back and implement quality control procedures on international broadcasts as they do with those that air here to ensure their broadcast partners are working to their satisfaction, but the talent we spoke to believes the four U.S. pro sports leagues would be better off disintermediating and producing their own high-quality broadcasts, in various languages, that could then be sold directly to consumer. Remember, unlike in the U.S. where the television contracts are so large that it would be nearly impossible for a league to come out ahead with a DTC strategy (like: NFL Game Pass or NBA League Pass) - NBA/China aside - “the big four aren’t generating significant broadcast revenues overseas.” In other words, the risk-reward is worth exploring.
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