Super Bowl Broadcast is a crossroads for CBS Sports
On the one hand, Sunday will be a joyous occasion for CBS Sports. The sports division is broadcasting its 22nd Super Bowl, the most of any network. Guaranteed to be the most watched television event this year, the game will generate hundreds of millions in advertising revenue and provide a huge promotional platform for CBS and its parent company Paramount.
On the other side there is everything else.
The storied CBS Sports division, home to major events like the Masters and March Madness, is facing a wave of change. Longtime chairman Sean McManus will leave in April. The division has lost the rights to one of its signature properties, the Southeastern Conference college football games. Tech giants with deep pockets are getting aggressive when it comes to live sports programming, with companies like Amazon (NFL football on Thursday nights) and Netflix (WWE wrestling) entering the field. And Paramount is widely considered a takeover target, with a number of suitors circling the company.
All of this means CBS Sports faces a number of challenges — which business leaders say they can handle by sticking to what they know.
“Whatever happens to the business in the future, sports will become increasingly important every year,” Mr McManus said.
CBS Sports has long been one of the elite players in American broadcasting. The understated reporting, narrated in recent decades by legends like Pat Summerall, John Madden, Verne Lundquist and Jim Nantz, stood in stark contrast to louder competitors like ESPN and Fox. CBS has televised golf's Masters tournament with limited commercial interruptions and stately, hushed tones, dating back to the 1950s.
And CBS has plenty of major sporting events in the near future. The network's NFL rights are locked up for about $2 billion per year through 2033. The rights to the men's basketball tournament have been secured for an additional eight years, at a cost of approximately $750 million per year. And many PGA Tour events are signed for hundreds of millions per year through 2030.
That's because even as traditional television ratings plummet and more people migrate to streaming, live sporting events still thrive on broadcast networks. Recent NFL playoff games on CBS have set ratings records.
“No matter how many changes are happening or on the horizon, televised football, and especially the NFL, is the one entity that exists above and beyond all of that,” said Bob Costas, the premier sports broadcaster.
Even if network sports divisions have to make adjustments, “it doesn't have much to do with the NFL,” Costas said. “All they have to do is keep raising the money for the rights.”
Yet almost every media company faces skyrocketing sports rights while trying to deal with challenges at the same time. These include cord-cutting, declining ad revenues and streaming companies losing money. Three companies – Disney, Warner Bros. Discovery and Fox — announced Tuesday they would jointly launch a new sports streaming service this year to better control their fate in a changing world. However, Paramount will not be part of that service.
Like other media companies, Paramount, which also owns cable networks like Nickelodeon and MTV, has been affected by the decline of cable television. According to financial returnsParamount has committed to making more than $30 billion in future payments, the vast majority of which will be for sports rights. That's more than what the stock market says Paramount is worth. The company's streaming service, Paramount+, lost hundreds of millions of dollars last year, and several analysts are skeptical that it will even exist in its current form in a few years.
A number of suitors – including Skydance and Warner Bros. Discovery – have expressed interest in Paramount's media business.
Both men described the transition as smooth (CBS president George Cheeks called it “a master class in succession planning”), and emphasized that the division would stick to what it did best: acquiring desirable sports rights and producing strong broadcasts . .
“The relationships we have with these various leagues are deep and storied, and there is a tremendous comfort level and trust factor that we can present in the best way possible,” Mr. Berson said.
Still, CBS has faced some challenges even on that front. For more than two decades, CBS has broadcast SEC college football games on Saturdays, regularly a top-tier event. CBS paid $55 million a year for the rights.
But this year, ESPN will take over the broadcasts of SEC games and pay $300 million a year to do so. To make up for the loss, CBS acquired the rights to Big Ten games, but at a higher price (about $350 million per year) and for a league that has generally been weaker in recent years, although it has attracted some prominent sports rich games added. universities on the west coast.
“I think there's a good chance that there will be tremendous growth in the Big Ten, both on the field and in the television universe,” Mr. McManus said.
Mr. Berson underlined the division's ability to innovate with sports productions. He pointed to the fact that the Super Bowl would be simulcast on Nickelodeon in a broadcast tailored to children and families.
“We really believe it cultivates the next generation of fans and does it in a really fun way that complements the audience,” he said.
Although CBS made major deals in the early 1930s, tech companies like Amazon, Netflix and Apple have begun their push into streaming live sporting events. Amazon is now streaming “Thursday Night Football,” Netflix has picked up the rights to WWE's weekly flagship “Raw” broadcast for $5 billion over the next decade, and Apple has bought the rights to show Major League Soccer around the world. Longtime rival NBC Sports also recently successfully streamed an NFL playoff game on Peacock.
It all adds up to a vastly changing sports media landscape.
“They may indeed be competitors in the future,” Mr. McManus said of the technology companies. “Our deals are generally for this decade, if not longer. We will look into it and do our research. And if they do become competitors, we've been successful so far in keeping the properties we wanted.
“So, you know, it's hard to predict the future, but I feel good about our position.”