Blockchain Pumps Up The Value Of Media Rights For NFL, NBA, And All Sports
Sports leagues and Conferences have traditionally relied on bulk deals with centralized media platforms like ESPN, Fox
Blockchain technology has the potential to revolutionize the way sports rights are administered by the NFL, NBA, MLB and all sports media owners. By leveraging the security and decentralization features of blockchain, micro transactions can be made more efficiently, engage fans in the most personalized way, and enable new revenue streams in an increasingly direct to consumer (DTC) world.
With the rise of streaming technology and the increasing demand for more personalized experiences, leagues have already been incorporating a more DTC approach in their strategy. The NBA and MLB have launched DTC offerings and the NFL last year rolled out NFL+, a collection of games that can be streamed live. In each case, these DTC offerings are subject to the overarching media deals with the media “platforms” that often involve exclusive rights to broadcast games.
For example, after the NBA sells the exclusive media rights to a slate of its games to ESPN and TNT, it offers the remaining games DTC in bulk packages. However, as we enter the next phase of the evolution of sports media, blockchain technology will shift the way we value and sell media.
NBA Commissioner Adam Silver has gone on record saying that every moment of every NBA game has potentially a different value. For example, a meaningless game in the standings has less value that two contenders playing for first place in the Conference or Division. On a more micro level, a close game is more valuable than a blowout and the last minute of an important, close or playoff game has even more value. The implications of all this are that portions of games can be sold through micro transactions minute by minute using dynamic pricing. This newly discovered opportunity will cause leagues to rethink their media rights strategies much as they did when cable emerged as an additional and/or alternative option to free to air television.
Relevant to this development, the NBA has been struggling with a dilemma: its young audience of fans that are coveted by advertisers often consume clips and highlights on social media rather than watching the broadcasts live. Since the size of the audience determines the size of the rights fees paid by broadcasters, it would behoove the NBA (or other leagues) to sell certain programming in bulk to media platforms but withhold the ability to go direct to consumer on games that are not covered by the agreement and reserve the right to sell individual games or at the very least, portions of games. These micro-transactions, powered by blockchain might be more appealing to this younger audience that has an appetite for consuming short form, personalized content.
The nature and scope of those micro transactions will be the subject of intense negotiations with those media platforms because they will claim that their audience will be cannibalized. However, this is the same argument that was made when live streaming was introduced and I am confident these negotiations will be resolved through some form of compromise.
Assuming the league has retained these rights, fans could set an alert to automate the purchase if it’s a ‘close game’ or stop viewing/paying if it’s a blowout. Imagine being able to buy only the NFL games that have your fantasy players in the game on Sunday, rather than having to purchase Sunday Ticket.
This same blockchain strategy could be used by leagues to enhance fan engagement and monetization in their broadcasts by creating new viewing experiences for a new generation of sports fans. One example is creating interactive broadcasts consisting of real time calls to actions like “live minting” where QR codes appear on the screen at key moments and fans can answer trivia questions to win prizes or make purchases through NFTs. This could encourage fans to watch live and be eligible to earn things or buy “mintable moments” when they witness an amazing play. Imagine receiving an NFT POAP (proof of attendance) for witnessing Stephen Curry make the game winner with .6 on the clock. That’s something worth handing down to your kids.
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