Entertainment Studios, founded by Byron Allen, will launch a new OTT streaming subscription service, Sports.TV. Sports.TV will aggregate independent, regional, national, and global networks on its platform.
For sports broadcasts, traditional television is still king as seen by the NBA’s lucrative television deal with ESPN and Turner. In their nine year deal, the NBA will receive $24 billion, an average annual payout of $2.6 billion, almost 3 times as much as their previous deal which paid the NBA $930 million yearly. Like Entertainment Studios, ESPN and Turner have invested in OTT, direct to consumer, sports platforms.
According to Magna Global’s sports media report, TV ad revenue no longer pays networks enough to cover sports broadcast fees. Turner and ESPN pay the NBA $2.6 billion over the course of nine years, but the networks ad revenue is estimated at only $1.3 billion.
Magna Global’s report also showed the average age of a live sport television audience has increased since the year 2000. Advertisers target younger generations which could lead them to spend less money on live television ads and more on OTT platforms.
Entertainment Studios expects Sports.TV to have 50 million subscribers in the next 5 years.