COMMENTARY

TV Networks, Distributors Seek Sports Wager Deals As Content Costs Rise

• by Wayne Friedman , Staff Writer, 9 hours ago

TV networks are gambling on the future. Taking bets off (or on) the table. Or going all in.

TV networks seeking future revenue-generating businesses are making more deals with gambling/gaming companies. This is happening as many states make wagering legal. These efforts have an obvious connection: Networks carry a lot of sports.

But it can be complex. Not every TV distributor is headed in this exact direction.

Dish Network and its virtual pay TV service, Sling TV, have dropped Comcast/NBCUniversal regional networks because of a current contract negotiation. Two years ago, Dish did something more final: Abandoning long-term efforts to carry Sinclair’s nearly two dozen regional sports networks, given its high price.

It’s not just Dish. Virtual pay TV provider YouTube TV and Hulu + Live TV also declined to take on Sinclair RSNs, due to cost. The theory here: Taking on these expenses would mean forcing all consumers to pay more -- not just sports fans.

So how does Dish Network explain it just made a deal with online Draft Kings' sports wagering/gaming service to be incorporated onto its platform?

Well, firstly, it sees this as a money marker. In addition, though Dish abandoned Sinclair’ sports business, it still has many deals with broadcast and cables networks, like ESPN, that air sports content.

Still, many worry about whether big broadcast networks, or sports specific TV networks can continue to pay the high price for carrying sports content. For example, NFL price hikes for a new round of TV network contract deals were said to have a starting negotiation hike model of 100%, according to reports.

It gets muddy -- especially with broadcast networks/TV stations. While they have other broader entertainment programming on their schedules -- sports content contributes to its higher overall retrans/carriage revenues.

For many, taking on DraftKings, or making a partnership and naming-rights deal as Sinclair did with casino operator Bally’s to rebrand its regional sports networks, are considered revenue hedges against future costs or business downturns.

But also consider that both moves might just be damage control. Sinclair is looking to find associated businesses to help its RSNs, and Dish Network/Sling hope to save costs amid steadily declining traditional pay TV subscribers.

Is all this enough to still play ball?