2025 ushers in big expectations for sports, streaming and media M&A

"MediaTalk" is a podcast hosted by S&P Global Market Intelligence in which the news and research staff take a deep dive into issues facing the evolving media landscape. The weekly podcast includes conversations with internal thought leaders alongside interviews with industry insiders and analysts.

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Join Mike Reynolds and a trio of S&P Global Market Intelligence Kagan analysts in the latest episode of "MediaTalk," where they dive into the future of broadcast stations, cable networks and the sports business for 2025. As the media landscape continues to evolve, this episode offers critical insights into the potential for M&A activity, the impact of new Federal Communications Commission regulations and the ongoing shift to streaming platforms from traditional TV. Discover how major players such as ESPN (US), Amazon.com Inc. and NBC Sports are reshaping the sports viewing experience, including the upcoming launch of ESPN's direct-to-consumer flagship product and its implications for cord cutting. The episode also explores new ventures such as the indoor virtual golf league and the three-on-three women's basketball gambit, Unrivaled. Tune in for an episode packed with valuable information and predictions to get you ready for the new year.

Featured experts:

Justin Nielson, principal analyst at S&P Global Market Intelligence Kagan.

Scott Robson, principal analyst at S&P Global Market Intelligence Kagan.

Michael Johnson, analyst at S&P Global Market Intelligence.

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An edited transcript follows below.

Mike Reynolds: Hi, I'm Mike Reynolds, a senior reporter covering the media industry with S&P Global Market Intelligence tech, media and telecom news team. Welcome to "MediaTalk," a podcast hosted by S&P Global, wherein the news and research staff explore issues in the ever-evolving media landscape. Happy New Year, everybody! Today, we're going to talk about what 2025 will bring for the broadcast cable networks and sports business markets. I'm joined by a trio of S&P Global Market Intelligence Kagan analysts: Principal Analyst Justin Nielson, who specializes in broadcast, among other areas; Principal Analyst Scott Robson, who tracks US TV networks and sports; and Research Analyst Michael Johnson, who is on the US Sports Watch.

We're going to start with Justin. Justin, on the M&A front, what does 2025 perhaps portend?

Justin Nielson: Yeah, thanks, Mike. 2024 has been really light in terms of M&A activity. Just a few station deals, mostly low-power and radio. We do see that if there is any movement in terms of the ownership cap relaxation from the TV side on the 39% national ownership cap or on the duopolies or in the Big Four, there could be a rush to consolidation again like we saw 15 years ago when there was a kind of relaxation on the TV and radio side. There are good prospects, but I don't know if it's going to be the No. 1 priority for [incoming Federal Communications Commission Chair] Brendan Carr. I think there are a lot of things he wants to tackle in terms of deregulatory initiatives.

Reynolds: Justin, what are your sensibilities about the US economy and consumer sentiment overall?

Nielson: On the upswing. There are some green shoots in terms of potential for tax cuts, lower borrowing rates, as well as just investment in certain entities and M&A activity potentially on the horizon.

Reynolds: OK. I know Kagan has released its 2025 Research Agenda for the top things you all are going to watch in the media, pay TV, broadband, mobile and consumer tech space. You want to talk about, Justin, some of the things you guys have your eyes on under the CIQ Pro Economics of Networks Kagan 2025 Research Agenda called "Transformations in Global Media, Networks, and Consumers?"

Nielson: Yeah, just a kind of overview of some of the trends and then also looking at our research agenda for the year. A lot of focus is going to be on the digital transformation of the media space — a continuation of the trends that we've been seeing in terms of linear TV moving more to streaming. You've got the big tech players moving into the space, especially in the live sports arena. You had the Netflix Inc. Christmas games, you also have Amazon Prime "Thursday Night Football," and then the playoff games that are going to be on Peacock and other services, and then hopefully the ESPN flagship direct-to-consumer type products. There's a lot on the horizon in terms of the options that consumers are going to have for live sports and entertainment. And it'll be interesting how that shakes out in terms of the business model.

Reynolds: And again, this is cutting across the entire space. It's not only sports; the entertainment side, as we've seen with NBCUniversal Media LLC, the cable networks are going to be spun off from Comcast. So the content spend is going towards streaming.

Nielson: It most definitely is. And in the case of the spinoffs of Comcast and NBCU of the cable networks, it'll be interesting to see what that business model is. Will they spend more on original content? Will they repackage and rebrand some of those networks to suit more of the digital or streaming consumers? And are there other opportunities to roll in new networks or spinoff networks from other studios?

Reynolds: I know that I guess some people are talking about that perhaps that becomes the place for most cable and the old-fashioned cable.

Nielson: It's not going away anytime soon. I think there's still a large swath of the population that consumes TV that way on a linear stream.

Reynolds: Yep. There's money still to be made there. Justin, I also wanted to ask you about the change in administration. Donald Trump is going to be sworn in as the 47th president soon enough, and Republicans are now in control of both the Senate and the House. Some media executives, including Nexstar Media Group Inc. topper Perry Sook, have expressed optimism that there could be a favorable environment for consolidation after the election results. Your thoughts? Do we see a wave of consolidation coming in 2025?

Nielson: It's interesting because I think Sook had pointed to the last consolidation phase that happened back in 2004 when they started to do some ownership cap relaxation for the broadcasters. You saw multiples rise into the double-digit territory in certain cases for the Univision deal, the Clear Channel deal, and others. So maybe we'll see that again. I'm not entirely sure; it's a different market now in terms of broadcast — just lower margins overall, and top-line revenue growth really hasn't been there. But it should boost station values if we do get some of the deregulatory moves that the new FCC and potentially the [Justice Department] may put forth.

Reynolds: All right, Justin, thanks for spending a lot of time with us. Lots to keep our eyes on in 2025.

Nielson: Thanks, Mike.

Reynolds: Scott, you're up next. Last time we spoke about billion-dollar cable write-downs at Paramount Global and Warner Bros. Discovery Inc. and Comcast Corp. spinning off most of its NBCU cable portfolio. Any new developments on that front? Again, I think that the latter is what we're all going to be watching in 2025.

Scott Robson: Yeah. So we're still in a wait-and-see mode on those fronts. The write-downs helped reset expectations for the future of the industry, and the Comcast spinoff should be happening sometime this year. I will say that I don't think the Comcast spinoff announcement was as monumental of a move as some people have made it out to be. We've seen similar things in the past with News Corp spinning off its newspaper business. Personally, I'm excited for this to happen as we'll hopefully get a more simplified view of how these businesses are doing when their earnings aren't reported in a bucket with other digital assets as they are now. So, getting more of a snapshot of how these cable networks are doing.

Reynolds: You're right. There should be some more detail as opposed to going behind or across the lines, as the case may be. Looking at one of the big stories this year is they've been threatening it for a couple of years now: flagship ESPN streaming. All kinds of different stuff — the networks, personalized content, access to gambling. Scott, how big a story is this going to be?

Robson: Yeah. So ESPN launching its direct-to-consumer product in the fall is at the top of my list as one of the big things to watch in 2025. I think this will likely be one of the top stories of the industry this year. In 2023 and 2024, if you wanted to watch the NBA and NHL playoffs, you needed the cable package or access to TNT (US) and ESPN, and it looks like now you're not going to need that. So I think everyone is wondering if the launch of the new ESPN product will trigger an uptick in cord cutting. We ran the numbers and published a sensitivity analysis when this direct-to-consumer product was first announced, and we came to the conclusion that it could cost subscribers as much as $30 per month. The price point could be a barrier to entry. But it certainly isn't too much of a reach when you look at products like NESN 360 going for around $30 a month.

Reynolds: Yeah. And I guess the regional sports networks, most of them are in the $20 range, and that's for one or two clubs as opposed to the breadth of what ESPN is going to offer. And again, they say I'm going to be able to personalize SportsCenter, and I'm not the better, but I guess somehow or another, you're going to be able to wager in some capacity.

Robson: Absolutely. Yeah, just a variety of different options and features. They're bringing artificial intelligence into the mix with the personalized SportsCenter, as you mentioned. [Disney CEO Bob] Iger seems to be pretty jazzed up about it, and I think it's going to make a big splash when it launches this fall.

Reynolds: They launched ESPN+, and that's a repository for stuff, for lack of better terms, that doesn't make it onto the linear networks. I think they're about — forgive me if I'm wrong — I think about 25 million subs that way. But ESPN/Walt Disney Co., they wanted to team with Fox Corp. and Warner Bros. Discovery on Venu, a big streaming service with lots of sports. I think 65% of the national sports were supposed to be on that, but that got tackled, Scott, by a fuboTV Inc. lawsuit. Your sense for anything happening there? Is that going to make it? Is that ever going to come off the sidelines?

Robson: Yes, I think it would be interesting to see if the Venu streaming service ever hits the market. I don't know if it will. I don't think Disney really cares if it does now that it has the launch of the ESPN direct-to-consumer service on the horizon. I think Warner Bros. Discovery was trying to gobble up sports rights in 2024 to make up for the loss of the NBA so that TNT, TBS (US) and truTV (US) wouldn't seem out of place on the Venu app. And then Fox has been more supportive of the traditional pay TV bundle than any other media company. They don't really have a major streaming service out there. They have the Tubi FAST platform, but they don't have a bigger streaming service. So they're more so tied to the traditional bundle. And then on top of that, fubo will definitely continue to fight against Venu. So I'll be following that news this year with the expectation that it never launches.

Reynolds: As you mentioned with Fox, they've been the traditional player. At some point, you figure they've got to get some streaming on sports. So we'll see if they wind up doing something else. There's been some reportage that perhaps some of it winds up on ESPN flagship. Anyway, a lot to think about, and we've got months ahead of us to see how all of it starts to come together. Scott, thank you very much for taking a look for us at what 2025 may bring.

Robson: Thanks, Mike. It's been great.

Reynolds: Thank you. Next up, it's Michael Johnson, MJ on our team who covers the sports marketplace. Last time, MJ talked about Diamond Sports Group LLC and the ongoing transformation of the RSN industry, as well as Warner Bros. Discovery and the NBA settling their rights dispute. The latter is going to manifest in some big changes for Warner Bros. Discovery and the three national NBA right holders that will tip off with the 2025–26 season in October. Mike, when you talk about ESPN, Amazon and NBC Sports now in the NBA game.

Mike Johnson: Yeah, absolutely. I know I'm very happy that this new deal will be taking effect for next season and happy Warner Bros. was able to still be doing business with the NBA over the next decade and their settlement as well. For next season, we'll have the majority of games on ESPN and ABC; NBC Sports entering the mix with games on Peacock as well. Hopefully, they can strike a deal and bring back the infamous "Roundball Rock" theme song going forward.

Reynolds: Can't go without John Tesh.

Johnson: Absolutely. And then we'll have Amazon streaming games as well, entering the mix for the first time. So a lot going on.

Reynolds: Yeah. We just disconnected from Peacock, but I'm realizing that I'm going to have to reconnect to get my basketball Jones as we get into next fall. Before we get to the next NBA season, there's a new indoor virtual golf league with Tiger Woods and Rory McIlroy, and then Breanna Stewart and Napheesa Collier and other WNBA stars are gearing up for a new three-on-three women's basketball league with games played on a reduced full court. Mike, your thoughts on these two new endeavors?

Johnson: It'll be interesting to track the initial response to these new ventures. The golf league, it'll be launching, I believe, early January on ESPN and ESPN+, and run through the week before the Masters. So it'll comprise six different teams with matches being held on Monday and Tuesday nights, depending on the week. But as we all know, the league planned to launch in January of 2024 this past year.

Reynolds: I forgot about that. Yeah.

Johnson: It pushed it back. I think it was damage to the original venue or something like that, so it forced a year-long delay.

Reynolds: I think there was a fire down there or something.

Johnson: Yeah, that's exactly what it was. I recently saw a new ad campaign focused on the golf league, focused on technology playing a huge part, and the pace of play will be a big talking point. They want to tap into the nature of how quickly the pace is going to be moving forward. I believe their new slogan is "Keep up, it's golf." So that kind of ties into that as well. It'll be a little bit different from a creative strategy standpoint, and I think currently they have 11 different commercial partnerships with the league, obviously being attractive to tech companies such as Best Buy being a prominent partner as well.

Reynolds: Okay. How about the three-on-three women's basketball league? Like I said, a modified full court. I think you're going to be able to go to the basket and score pretty much at will there.

Johnson: Yeah, exactly. So I'm very excited about this. Unrivaled, it'll be tipping off in Miami in January of 2025. Like you mentioned, it's a three-on-three league built in collaboration with the biggest stars in women's basketball. Warner Bros. struck a media rights package deal. I think it was a guaranteed three-year deal with a three-year option attached that could take it to a six-year value of approximately $100 million. Recently, the league divided its players into six different teams, with the hope of, I think it was A'ja Wilson and Caitlin Clark — they were trying to entice them to be a part of the league as well. But unfortunately, I think they turned down the offers at this point.

Reynolds: Yeah, I think so.

Johnson: Somewhat understandable with, I think it's Caitlin Clark that went from straight from college basketball right into the WNBA season. So she deserves a well-deserved break.

Reynolds: And then we'll see if, again, how it goes, and maybe those two will join up in the second season. It'll keep the momentum going, or if it doesn't work so well, there will be some fresh blood and maybe some new interest in it.

Johnson: Yeah, that's a great point as well.

Reynolds: All right. So those are two new endeavors. Big now that the NBA deal is set. NFL, MLB and NHL deals still have a number of years to run. Are there some other rights coming up that you've got your eye on, Mike?

Johnson: Yeah. So we'll be keeping a close eye this upcoming year with MLB. I think they have an opt-out with ESPN for their Sunday Night Baseball package. We'll see if anything comes to that. We'll also be tracking the UFC. I think their current media package expires in December 2025, so I'm sure negotiations will be kicking off during the year. And then I think we'll have Formula One; their media rights are up for negotiation as well. So we'll have that mix again.

Reynolds: All right. So the roster is maybe in flux, maybe not. We'll see, but a lot to watch in 2025, just as was the case in 2024 on the sports beat. Mike, thanks for joining us here. Appreciate your insights and all the best in 2025.

Johnson: Thanks, Mike.

Reynolds: That concludes this episode of "MediaTalk." I wanted to thank Justin Nielsen, Scott Robson and Michael Johnson for sharing their insights. Thanks, guys.

Nielson, Robson, Johnson: Thanks, Mike.

Reynolds: All right. This is Mike Reynolds. Thanks to all of you for listening. We'll catch up soon on the next edition of "MediaTalk." Happy New Year, everybody.

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