November 4, 2024

Amazon Said to Team Up With Yankees in Bid for YES Network

The companies involved in the deal declined to comment on Friday.

Media rights to sports franchises are incredibly lucrative, but their value on traditional cable systems has waned as fewer people are willing to pay for traditional TV. A large part of the upside in sports rights now comes from streaming. For Amazon, owning a piece of YES could be a boon to its Prime program (which costs $119 a year), especially if that membership included access to those games. That, in turn, could add more revenue, as Prime members tend to buy more on Amazon than casual online shoppers.

Amazon’s motivation becomes clearer when considering the fact that growth in the number of Amazon Prime members in the United States has slowed recently. It hit 97 million members last year, up from about 90 million in 2017, according to an estimate from Consumer Intelligence Research Partners.

Amazon already streams “Thursday Night Football” on Prime, for which it had paid $50 million for one N.F.L. season. The company renewed that agreement in April for two more years in a deal worth $130 million, a 30 percent increase.

With the rise of streaming, regional sports networks have found themselves in a tricky position. They are effectively the middlemen of sports rights; they get money from cable and satellite companies to carry the networks, but they, in turn, have to pay sports leagues for the rights to broadcast the games. Lately, cable and satellite companies have tried to pay less to carry these networks, given the decline in subscribers — but the sports teams are set to receive contractual rate increases every year.

Unlike broadcast rights, which are controlled by the teams, local streaming rights are controlled by Major League Baseball. YES, and other regional sports networks, has the rights to show games online through the 2019 season, but how those rights will be controlled going forward is unclear. That could dampen the long-term value of regional sports networks. YES, however, could benefit from the fact that it is partly owned by the Yankees. M.L.B. has been trying to extract more lucrative terms from internet and broadcast companies for streaming, like the N.F.L. does, and it could end up granting those rights to the clubs themselves to help stoke new deals.

Article source: https://www.nytimes.com/2019/03/08/business/media/amazon-yankees-yes-network.html?partner=rss&emc=rss

Speak Your Mind