Sign up to receive 5 free days of our daily summary for tech news.

Special Offer: Try out The Information today for only $10/month for your first 3 months. 

Big Media’s Sports Rights Gamble

Major entertainment companies have made some enormous bets on live sports as a guaranteed audience draw in coming years. Just how big? Around $50 billion for some of the biggest companies.

That number—nearly six times what Netflix has committed to pay for content in coming years—is broadly how much ESPN’s majority owner Walt Disney and 21st Century Fox, owner of ESPN rival Fox Sports 1 and the Fox broadcast network, have each promised to pay sports leagues like the National Football League and Major League Baseball to air games over a period that stretches for a decade or more, according to footnotes in their annual financial statements.  

These long-term commitments have grown in size in recent years (see chart), as the cost of sports rights has gone up. It’s no secret that sports leagues have been able to charge higher prices for their rights; fragmentation of audiences among entertainment programming has made sports one of the few kinds of programming that continues to draw large live audiences. That’s of great value to advertisers and helps support TV networks demanding higher fees from pay-TV operators.

But what these huge numbers highlight is just how much of a long-term risk the media companies are taking on. For both Fox and Disney, about half of the obligations are due more than five years out—in some cases significantly more than 10 years from now.

What Is The Information?

Notes bb3aa5069205d702dda37fc71dc6f1c59df2310c4379304e9f1199f052af4884

Exclusive Articles

We broke it first. Receive original reporting you won't read anywhere else from the largest newsroom in tech.

Notebook b5103017ee163370a1667c9ce59ab0ef023875a17888105d26c185cadf31bb69

Daily news analysis

Every weeknight, we'll send you our reporters’ views on the day’s top tech news—distilled into one email.

Conference calls c9e664e8b96ee347d3e92b8309938f268422b9db98cfabca5c826fbb75054b23

Conference calls

Get access to our reporters and other top executives with monthly deep-dive calls into topics like startups and autonomous vehicles.

Events 499acedd16cffc41445edd76bfd302b2836c2a27419890f17130a6b10e2aa3df

Special Events

For no extra fee, get access to more than a dozen events yearly, from intimate dinners to larger gatherings with marquee speakers.

What else is included in my subscription?

Become a contributor

Share your views and find other subscribers by completing your profile. You’ll be listed in our contributor directory.

Slack community

Discuss topics and current events with our subscriber-only Slack group and share news about your company with other subscribers.

Annual Subscriber only benefits:

Org Charts

Access the only collection of tech company org charts. Our expanding database includes companies like Amazon, Snap, and Uber.

Crypto Newsletter

Our experts investigate the latest in the crypto world to keep you in-the-know about the movements of digital currencies.

Stay up to date on Silicon Valley

Sign up for Jessica Lessin’s (The Information’s CEO & Founder) free Saturday newsletter and also receive a complimentary week of our daily afternoon tech commentary email.

Already a subscriber? Log in here

Recent Articles

Amazon Entertainment

Inside Amazon’s Struggles to Make its Mark in Hollywood

By Beejoli Shah and Tom Dotan

Enterprise Amazon Cloud

Big Customers Pressure AWS to Step Up Open Source Support

By Kevin McLaughlin and Amir Efrati

Asia Apple Markets

A Recession May Be on the Way. How Will Tech Fare?

By The Information Staff

The sports commitments account for a whopping 90 to 95 percent of overall long-term programming obligations for Fox and Disney.