It’s not the available dollars that matter most. It’s the eyeballs. What a concept.
That, in essence, is the strategy behind the Ducks’ new broadcast commitment announced this past week: An agreement with KCOP/Channel 13 to air 65 regular-season games on over-the-air TV, along with a free streaming arrangement with Victory+, an ad-supported app that is to be launched in mid-September by A Parent Media Co. Inc.
The Anaheim franchise thus became the first team in the country’s second-largest market to totally turn away from cable/satellite, reflecting both the declining reach of those services and the particular issues with Diamond Sports Group, the parent company of previous rightsholder Bally Sports. The latter include a bankruptcy filing and the company’s difficulty in getting some of the entities under its umbrella – particularly MLB teams – to reach agreements over streaming rights.
But the Ducks aren’t the first in pro sports to turn their backs on cable. Last year, Phoenix Suns and Mercury owner Mat Ishbia moved his teams from Bally to over-the-air stations in Phoenix, Tucson and Yuma as well as adding a streaming component through the Kiawe platform. The Utah Jazz, under owner Ryan Smith, followed suit shortly thereafter. (More recently, the NBA bypassed Warner Bros. Discovery and TNT for Amazon Prime in its most recent league-wide TV contract negotiations, and that saga might be headed for court.)
The NHL’s Dallas Stars have opted to go all-streaming this season, and they also have signed up with APMC and Victory+.
“With the Ducks and the Stars, specifically, they wanted to own their own destiny,” said Neil Gruninger, president and CEO of APMC, in a phone conversation. “They want to know who their fans are. And by working with us, we’re able to give them an incredible streaming service, ensure that they’re generating revenues, (and) implement enhanced digital experiences for them to potentially tap into other ancillary revenue streams right through ticket sales or (merchandise) sales.
“And what really the Stars and the Ducks are doing uniquely compared to, I’d say some of the other teams in the market, is they (offer) this direct-to-consumer (platform) free and they’re not charging a subscription fee. And that’s really important for our strategy and ensuring that younger audiences are willing to watch a full game as opposed to just seeing a highlight on a social media service.”
Gruninger referred to “cord-nevers” as well as “cord-cutters,” people who either severed their relationship with cable or never started one. So the streaming component may be the most important part of this deal, because it meets those people – many of them younger – on their turf, with the idea of turning them into fully formed fans who watch games rather than just consuming highlights on social media.
The key motivation, for the Ducks, was to increase their potential penetration of the market. Club president Aaron Teats noted that there were 8 million households in their marketing area, and said in a phone conversation the team kept coming back to the need to make sure “that we’re doing what’s easiest for as many fans as possible, knowing that some still have pay-TV options, with cable and satellite, and knowing there’s a large percentage and growing percentage of our community that is gone to streaming only platforms. So how is it that we can service both of these (sets of) viewers in the best way possible?”
It’s a matter of zigging when all around them have been zagging for so long. The tendency, among leagues and individual teams, has been to grab the money up front even if it means sacrificing market penetration. A classic example: Major League Soccer’s deal with Apple TV+, for which the streamer demanded (and got) exclusivity and shut out all local broadcasts, not to mention lots of potential viewers.
Another example: The Dodgers’ $8.3 billion, 25-year contract with Spectrum to launch their own network, signed with what was then Time Warner Cable in January, 2013, when cable still was the predominant place to watch sports. That deal has 14 years to run after this season, and for the first six seasons DirecTV and most non-TWC/Spectrum cable services refused to show the network. The Dodgers got their money, and they got editorial control (consider the number of times you hear “we” during their programming), but how many fans were turned off by the spat over those six seasons?
And what happens in the future if the number of cable subscribers continues to drop?
The teams still on the SoCal Bally platforms might be watching the Ducks’ venture closely. The Kings and Clippers put a smattering of games on over-the-air stations last season, and neither has announced a 2024-25 local TV schedule yet. The Angels are available exclusively on Bally, and the Dodgers and Lakers have separate channels on Spectrum.
The Ducks’ deal features a revenue guarantee, with the possibility of additional revenues. Teats allowed that their situation was unique among other teams in the market, but added: “The one thing we’ve seen is that there are twists and turns here that nobody can really predict. So I think that’s why you have to just stay focused on what is your situation, what is best for your fan base. And we’re lucky that we have terrific owners in Henry and Susan Samueli that allow us to maintain that focus and do what’s best on their behalf.”
The Victory+ platform will be available throughout an eight-county area – Orange, L.A., Riverside, San Bernardino, Ventura, Santa Barbara, Imperial and San Diego – as well as Hawaii, and will include additional Ducks programming as well as games.
The Ducks already do similar team programming along with their audio broadcasts on the Ducks Stream platform. The Kings went to an all-streaming audio broadcast on the iHeart app in 2018, and will make a slight return to terrestrial radio this season by putting 25 games on KSPN/710 as well as moving their audio streaming to the ESPN LA app.
The bottom line, for the Ducks: those eight million households.
“When you can achieve 100% distribution where anybody that is looking to connect with your team or your brand (can get) that option for free. you’ve made a distinct change,” Teats said.
It’s not just about viewership numbers. David Carter, principal of The Sports Business Group and an adjunct professor of sports business at USC, noted in an email exchange, “Because all elements of sports business are intertwined, the Ducks aren’t just looking at this TV deal as (a) workaround to reach fans. The team is looking at how its media strategy going forward will affect the entirety of their business and this includes, for example, increasing traffic to the OC Vibe (development around Honda Center) over time, as well as the team’s other related businesses and revenue streams.”
And if the team’s multi-season on-ice rebuild is at last ready to produce results, all of the numbers could increase exponentially. Maybe people flipping through channels stumble across a Ducks game on Channel 13, like what they see, sign up for the streaming platform, buy tickets and merchandise and, not least, invest their emotions in the team.
Get their attention, give them a good product, and the revenue will follow. Imagine that.
jalexander@scng.com
