When 21st Century Fox and Comcast agreed to spend $1 billion for the U.S. broadcast rights for the 2018 and 2022 World Cups in 2011, it probably seemed like a helluva good deal to the media conglomerates which are increasingly dependent on sports programming to attract mass audiences.
Unfortunately, as soccer fans know all too well, the Team USA won't be in the tournament for the first time in 30 years after being eliminated by the tiny Caribbean nation of Trinidad and Tobago. However, given the decline in viewership across multiple sports, there's no guarantee that U.S. fans would have tuned into the World Cup even if Team USA had participated.
Team USA's disappointing performance is bad news for Rupert Murdoch's media empire since lower ratings mean lower ad revenue and profits. The company's Fox Sports had planned to make the World Cup the most significant production in its history, according to The Wall Street Journal. Philadelphia-based Comcast won't be hurt as badly since the games will be broadcast on its Telemundo Spanish-language network, which will attract U.S.-based fans from around the world.
Back in 2011, the conventional wisdom held that in an increasingly fractured media environment where everything from cute cat videos to scripted dramas is vying for the viewers' attention, sports will continue to attract viewers to watch their favorite teams live. The year turned out to be a watershed moment in the history of sports broadcasting
21st Century Fox and Comcast spent more than double the $425 million that Walt Disney's ESPN and the Spanish language network Univision paid for the 2010 and 2014 World Cups. According to an October 2011 New York Times story, ESPN and Univision were favored to win the latest broadcast rights deal. One month earlier, Disney's ESPN agreed in September to a Monday Night Football deal valued at $15.2 billion through 2021. Two months later, Fox, CBS, and Comcast signed a $27 billion deal with the NFL for the right to broadcast games through 2022, an increase of more than 60% over their previous contract.
But as the latest kerfuffle involving President Donald Trump and the NFL shows that sports are having the same difficulties as other genres of programming in attracting audiences. Viewership during the last NBA regular season fell 6% compared with the 2015-2016 season. Several Major League Baseball teams such as the Detroit Tigers, Boston Red Sox, and the Pittsburgh Pirates saw double-digit ratings decline this season.
NHL ratings on NBC plunged 20% during the 2016-2017 season, the lowest broadcast ratings in the league's history. Viewership has also plunged for NASCAR and professional golf.
Even though the business of sports is yielding diminishing returns, I see no signs that media companies are experiencing buyers' remorse. 21st Century Fox may take a financial hit of $10 million to $20 million for the World Cup, chump change for a multinational media conglomerate. If anything, with new entrants such as Amazon, Google, and Twitter reportedly poised to enter the fray, the odds are that prices for broadcasting rights will continue to skyrocket.
Like it or not, sports is a game that media companies need to play to win.
Corrects third paragraph to say Comcast owns Telemundo, not Univision.
