Weekly Column: When Media Rights Decide Whether the Game Gets Played

In this week’s column, California Sports Lawyer® CEO and Managing Attorney Jeremy M. Evans analyzes how increasingly complex media-rights agreements can determine where games are played, how they are distributed, and whether they happen at all.

If the contracts and relationships do not provide opportunities for that growth, they miss the chance to provide entertainment, competition, and frankly more revenue.

You can read the full column below. (Past columns can be found, here).

As the sports world consolidates with mergers, acquisitions, and the ability to stream and watch games and highlights immediately on social media and other platforms, there is a growing concern that contracts and terms have gotten too complicated. Too complicated to allow for the flexibility of creating new traditions and excitement. Too complicated because they can erase tradition in college sports when teams are separated by contractual terms, obligations, and conference realignment.

The now-canceled Duke–Michigan basketball game is reminiscent of the proposed conference realignment that could have moved six Big 12 schools into the Pac-10 in 2010. Television rights involving the University of Texas were among the complications that helped prevent that realignment. In both situations, media arrangements limited an otherwise valuable sports opportunity. Duke and the ACC believed they could place the game on Amazon with ESPN’s approval, while the Big Ten and Fox maintained that the rights belonged to them under an agreement governing neutral-site games between the conferences.

The divide-and-conquer approach to dealmaking has expanded platform options and, in some circumstances, lowered the cost of watching games, but also increased the need for more platform subscriptions if one wants to watch live sports. These developments have been made possible by improvements in technology, streaming, and the ability to bring that technology to scale. However, owning broadcast rights also increasingly means controlling location, scheduling, distribution, and whether an event can proceed. Rights disputes can eliminate events, revenue, exposure, and opportunities before a court or arbitrator ever determines who was correct.

It has been interesting to watch the beneficiaries of media consolidation. Unfortunately for the Paramount-Warner Bros. Discovery merger, which makes sense from a distribution and competition standpoint, the transaction follows the Disney–21st Century Fox, Comcast–NBCUniversal, Amazon–MGM, AT&T–Time Warner, WarnerMedia–Discovery, CBS–Viacom, and Skydance–Paramount deals. Although Paramount and Warner Bros. Discovery are smaller than some of their largest competitors even when combined, their proposed combination is encountering significant resistance from California’s attorney general. California’s attorney general is applying an outdated view of competition to a media marketplace increasingly dominated by larger and better-capitalized technology companies.

It is also interesting to see how major agencies like CAA have moved beyond representing talent into larger transactions where they increasingly operate as dealmakers, investment advisers, and connectors between sports properties and capital. After all, agency clients benefit from new content and business opportunities, so agencies have an incentive to help bring those deals to completion. Schools, athletes, venues, sponsors, and fans bear the consequences even though they may not be parties to the controlling media agreements.

Future sports-media contracts need clearer provisions addressing neutral-site games, conference territories, competing platforms, approvals, and dispute resolution. Networks, streamers, conferences, and universities need to be more concerned with flexibility so that their fan bases and college athletes can enjoy the entertainment that sports provide. The true value in sports media is a mix between tradition and new opportunities. If the contracts and relationships do not provide opportunities for that growth, they miss the chance to provide entertainment, competition, and frankly more revenue.

About Jeremy M. Evans:

Jeremy M. Evans is the Chief Entrepreneur Officer, Founder & Managing Attorney at California Sports Lawyer®, representing entertainment, media, and sports clients in contractual, intellectual property, and dealmaking matters. An award-winning attorney and industry leader, Evans is based in Los Angeles and Newport Beach, California. He can be reached at Jeremy@CSLlegal.com. www.CSLlegal.com.