With the New York Yankees and Chicago Cubs considering developing their own or purchasing a larger ownership stake in a broadcast network, what should professional sports franchises look for when negotiating and launching a new product for consumers?
Here are the three things negotiators and developers should look for in constructing a deal.
1. Distribution Partner(s)
A distribution partner is a marriage of brands, content, and financing. If one aspect of the deal goes wrong, the entire production could be compromised. As an example, the Los Angeles Dodgers have struggled to distribute their broadcasts to its fans because their distribution partner (Spectrum) had a tough time licensing its rights to other platforms and distributors. The deal has struggled to distribute because it was based on non-contractual parties distributing content. Where a non-contractual party has the leverage to hurt a competitor, it is likely to do so and competitors indeed done just that with the Dodgers/Spectrum.
It should come as no surprise that professional sports teams like the Yankees and Cubs have sought to avoid relying on distributors that are not parties to its own contract(s) or becoming a distributor themselves. Therefore, finding the right distribution partner is all the more important to reaching viewers.
2. Innovative Capabilities
Streaming is a part of everyday life now. However, traditional television is still popular in many homes. Internet television, mobile viewing, and social media are also likely distribution partners today.
Camera view angels, audience engagement, augmented and virtual reality and graphics, and future capabilities not yet discovered or used can help build or harm a distribution deal. Often the copyright owners, creators, and professional sports teams want to hold more rights so that it can sell to more buyers (distributors). However, where the copyright owner controls/owns the distribution network, it can be innovative in its changing course while still controlling its product.
3. Content Control
If a copyright owner also controls/owns distribution, it can choose its commentators, production partners, and how/where the content is delivered. No wonder the Yankees, Cubs, Endeavor, and other content providers are more clearly pursuing distribution control as they are content creation and control. More responsibility comes with more control, but with the availability of non-traditional distribution (streaming, social media, etc.), content has become easier to distribute so owners/creators have become more willing forgo traditional partners for more control.
