SVG Sit-Down: BHV’s Chris Bevilacqua on the Potential Impact of Coronavirus on Sports-Media Rights Landscape
‘The sports industry has prioritized public health over their own commercial self-interest’
With the COVID-19 pandemic bringing the sports world to a halt, questions about the long-term impact on the sports-media industry are still to be answered. To provide insight into what the coming months and years may hold for the business, SVG is sitting down with several top sports-media executives and veterans to share their thoughts on the current situation.
Over the past 30 years, Chris Bevilacqua has established himself as a leader in the sports and media business. As co-founder of Bevilacqua Helfant Ventures (BHV), he has consulted on a slew of record-breaking sports-media rights deals. In addition, he was architect of the Pac-12 Conference media strategy and helped to launch Pac-12 Networks. He also pioneered other college-specific channels, including CSTV (the first-ever 24-hour cable network dedicated to college sports) and the MountainWest Sports Network. Prior to these efforts, Bevilacqua was chairman and CEO of Creative Artists Agency (CAA) Sports Media Ventures, serving as a media-rights advisor for several sports and entertainment entities.
Chris Bevilacqua: “All these loyal, passionate audiences who are being deprived of their passion over a fairly lengthy period will have some pent-up excitement.”
SVG sat down with Bevilacqua late last week to discuss the short- and long-term impact of coronavirus on the industry, how he sees future rights deals playing out, and what the future holds for college sports and regional sports networks.
How do you see the coronavirus pandemic affecting the sports-media business over the next six-12 months?
The immediate impact is obviously not good. Many industries are just shut down, including sports. But the good thing is, I think everybody in the sports industry has prioritized public health over their own commercial self-interest. This industry’s doing everything it can do to protect fans, athletes, and employees and worrying about the commercial fallout afterwards.
That said, obviously, if you’re not staging events and games, you’re not collecting revenue from ticket sales, sponsorship, and media [rights], and that’s a substantial lost commercial opportunity. I think we’re going to have a period of choppy waters — not for weeks but for months — where we don’t know exactly how and when this is going to settle out. And there are a lot of things commercially that are going to be degraded between now and whenever that is. The question then becomes, when things are back up and running, can the economy come back? Do people have a job, and are they willing to go buy a ticket or merchandise like they had in the past?
I don’t have a crystal ball, but I am a glass–half-full kind of guy. What I do know as it relates to the sports industry is that the partners on all sides have very solid relationships. In most cases, the owners of the major properties and their commercial partners have been partners for a long time, and, when everything settles out, they’ll sit down as partners and work out what’s in the best interest of everyone going forward.
In your experience, do major rights deals typically have an “out” clause for rightsholders if games aren’t played?
It’s not really one-size-fits-all. These are things that are typically very customized in terms of acts of God, natural disasters, and force majeure. Obviously, you have to address these sorts of unforeseeable events in any kind of a contractual commitment, especially when they are the size and scope of these big properties. And then, everybody has their own set of insurance policies as well, which will play a big role for both sides. In some cases, there’s very specific language for loss of games or seasons, and sometimes there isn’t. I think there will be a variety of factors coming together depending on the agreement, and it’s certainly not going to be the same for everyone.
We have seen the value of live sports coverage skyrocket over the past three decades. Do you believe this situation will cause the sports-rights media bubble to pop?
No, I really don’t think so. I think this is going to be a short-term issue — albeit a very painful short-term issue. But, when you start talking about the new cycle of rights, I think you’re going to see the values continue to grow. First one up is the NFL, and they’re gearing up [for negotiations] right now. Whatever happens, there will be a pretty good barometer of what’s to come. An event like this is not going to change the demand for the NFL product over the next 10 years. I truly don’t think it will have any meaningful commercial effect on valuable sports rights.
I think it is a unique, unforeseen event that won’t change any of the major trends in media. Now, it may accelerate some of those trends. Obviously, there’s already a transition going on from traditional media to digital, mobile, and OTT consumption of live sports. I think that will continue unabated. I think high-reach platforms like broadcast TV will still be incredibly important. And, even though cable TV is shrinking in terms of its reach, it is still very meaningful. So I don’t see that changing dramatically in the next few years through this next cycle of rights.
Do you believe this situation will have an impact on the rise of legalized sports betting in the near term?
I think the market forces are going to accelerate sports gambling. There is going to be a big hole in local, state, and federal government budgets. And, with the interest in sports betting spreading around the country, it only further incentivizes the regulators in all these markets to legalize it in order to get more tax revenue. I think you would see a quicker mass adoption of sports betting and legalization because there’s now a bigger economic incentive for states to get on board.
I think that all these loyal, passionate audiences who are now being deprived of their passion over a fairly lengthy period will have some pent-up excitement once sports comes back. And I think that plays very nicely into sports betting, especially if sports comes back and you’re not allowed to go sit in a stadium and watch for some period of time because we’re still quarantining to some level. So the only way you can interact with your passion may be from home in front of a TV or a device — and that can only be an accelerant for sports betting.
How much of an impact will the cancellation of events have on the college-sports sector specifically?
I think colleges have a real problem. They already were facing challenges related to the litigation around name/image/likeness [of athletes], increased costs, the widening disparity among the Power Five conferences in terms of revenue, and so on. And this puts even further pressure on them. Colleges in general aren’t commercially driven enterprises; they’re higher-education companies that get a lot of support from federal and state governments. I think you’re certainly going to see some serious disruption to that, given all the other factors already putting pressure on the colleges. This will only further highlight some of those issues.
What about for the RSN business?
The RSNs are going to be another one of those that fall into the category of “let’s wait and see what happens,” because I’m really not sure. One thing I do know is that these are long-term agreements and there are established relationships there. In the case of the [Sinclair Broadcast Group] RSNs, it is pretty much the same operating team that had been running those networks under Fox, and they know those teams well. I think they have been partners a long time and they’ll figure it out. Sinclair’s got a lot riding on the line to make this work, so I think it will all get sorted out one way or another.
This interview has been edited for length and clarity.