www.jpmorganmarkets.comNorthAmericaEquityResearch18July2019MediaAlexia'sSportsRightsAlmanac-2019MediaAlexiaS.QuadraniAC(1-212)622-1896alexia.quadrani@jpmorgan.comBloombergJPMAQUADRANIDavidKarnovsky,CFAAC(1-212)622-1206david.karnovsky@jpmorgan.comBloombergJPMAKARNOVSKYZiluPan(1-212)622-6522zilu.pan@jpmorgan.comAnnaLizzul(1-212)622-6139anna.lizzul@jpmorgan.comJ.P.MorganSecuritiesLLCSeepage126foranalystcertificationandimportantdisclosures.J.P.Morgandoesandseekstodobusinesswithcompaniescoveredinitsresearchreports.Asaresult,investorsshouldbeawarethatthefirmmayhaveaconflictofinterestthatcouldaffecttheobjectivityofthisreport.Investorsshouldconsiderthisreportasonlyasinglefactorinmakingtheirinvestmentdecision.Inarapidlyshiftingmedialandscapeinwhichthewayprogrammingisconsumedischangingeveryday,livesportsstandoutasoneofthelastformsof“appointmentviewing”leftontelevision.Thisuniquepositionmakessportsrightsaprizefortraditionalnetworks.Theassociatedliveandengagedmassaudiencesareahugedrawforadvertiserslookingforreach,andintheargumentofthesuperiorityoftraditionalversusdigitalads,sportsremainabovethefray.Networks,too,takefulladvantageoftheadvertisingappeal,bundlingsportsinventorywithadspaceonlesswatchedprogramming.The“must-have”andlivenatureofthecontentalsoprovidesmediacompanieswithsignificantleverageinnegotiatingagreementswithdistributorseagertokeepsubsfromcuttingthecord.We’vealsoseeninthepastfewyearsESPN,Turner,andDiscovery,inadditiontoindependentplatformssuchasDAZNutilizeexclusivesportsrightstolaunchdirect-to-consumerservices.Thebulkofmajorsportsdealswerestruckinthefirsthalfofthisdecade,largelylockingupmediarightsthroughtheearly2020s.Lookingahead,traditionalnetworkswillnotonlycompetewitheachotherfortheseproperties,butpotentiallywithscaledorupstartdigitalcompanieslookingtoutilizethecontenttoenhancetheirownplatforms.We,therefore,finditusefultoreexaminetheserightsdealscontinually,analyzethecostpaid,andassessthepotentialvaluecreated.Inthisnote,wepresentanin-depthlookat...
