Lehman: TV sports rights update

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In this week's "Thoughts To Entertain," Lehman Global Equity Research took a closer look at media company ownership of the broadcast rights to the three largest professional sports leagues in the U.S.: the National Football League, the National Basketball Association, and Major League Baseball. They believe the broadcast and cable networks and the sports leagues are all searching for incremental, alternative distribution revenues, best demonstrated by the launching of cable networks by each of the three major sports leagues.


These new networks are competing directly with the leagues' traditional broadcast and cable network partners. Lehman says these new sports league-focused networks may impact the television ratings of the games already broadcast on network and cable television, as the audience is diluted across an increased number of broadcasts. This makes the control of alternative distribution methods for sports programming the most important issue for the leagues and the media companies, as aggregating the total sports audience becomes the key to revenue growth, rather than game-by-game viewership.

Season-to-date, total Big Four Network ratings are down 6.7% y/y in Total HH ratings and 10.7% in A18-49. CBS won for Total Households, while FOX won across all the remaining demographics. Year-to-date, CBS remains the top network in Total HH and A25-54, while FOX is in the lead for A18-49 and A18-34. NBC remains down y/y in all demographics. ABC continues to see low-teen y/y declines for the year.

The total box office was down 11.8% this past weekend vs. 2006, facing tough comps from the 60 million opening of Cars and the 20 million second weekend of The Break-Up. Warner Bros.' Oceans 13 was the top film this past weekend, earning 36 million in its opening weekend.

YTD in cable Networks performance against target demographics, Discovery Communications is up 6.7%, News Corp. is up 4.6%, Disney is up 2.5%, Time Warner is down 4.2% and Viacom is down 5.9%. General entertainment networks are seeing negative growth rates, while specialty content networks are trending higher YTD.


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