E-commerce behemoth Amazon.com Inc. (AMZN) and social media giant Facebook Inc. (FB) pose a “major disruptive force” to live sports rights in the next few years, according to analysts at GBH Research, who see traditional industry players threatened by the newcomers’ widespread consumer reach and mounds of cash on hand. (See also: Amazon to Offer Pay-Per-View Packages.)
Daniel Ives, GBH’s head of technology research, wrote a note Tuesday indicating that the upcoming year and a half will be crucial as tech titans enter the professional sports programming space. As players such and Amazon and Facebook continue to ink deals with leagues for exclusive rights to stream games, traditional providers should continue to consolidate. The Walt Disney Co.’s (DIS) planned direct-to-consumer streaming platform ESPN Plus, set to launch in the spring, also puts the pressure on for tech firms to quickly gain share in live sports.
“To this point, we believe the next 12 to 18 months is a pivotal window for platforms like Facebook and Amazon, among others, to aggressively secure the rights to various professional sports programming, especially as the Disney/ESPN launch of ESPN Plus over the coming year will be at the epicenter to [Disney CEO Robert] Iger’s master streaming initiatives and ‘raise the stakes’ for securing future sports content in our opinion,” wrote Ives.
Spending Billions to Ante Up
In efforts to become a major contender for NFL, MLB and NHL media rights, Facebook is willing to shell out $1 billion in 2018, according to The Wall Street Journal. Ives expects Amazon to spend north of $5 billion this year. The two companies have been doubling down on original content through their respective video streaming platforms, Facebook Watch and Prime Video.
Facebook recently landed a deal with the MLB to stream 25 games this season in a move that Ives says signals the “early strategic steps of building out a massive wave of sports content spending over the coming few years.” The analyst noted that Amazon has already streamed NFL Thursday Night Football and that the Seattle-based giant could bid for the U.K.’s Premier League soccer rights against Sky plc and BT Group (BT).
Ives added that Alphabet Inc. (GOOG) and Apple Inc. (AAPL) remain “wild cards” in the race, while Snap Inc. (SNAP) and Twitter Inc. (TWTR) are “tangentially in the mix.” (See also: Youtube’s MLB Deal: Google’s Big Play in Streaming.)