Are Premium Streaming Sports Rights Bets Paying Off?
What’s the Superbowl without its commercials? Sports on TV and ads have always gone hand-in-hand. But what happens when streamers enter the picture and invest in premium sports rights? A half-decade ago, most premium streaming platforms thrived primarily on subscription revenue—but now, selling ads might be the only way to make sports streaming profitable, especially given the skyrocketing cost of premium sports licensing. DAZN’s Joe Caporoso, SVTA’s Jason Thibeault, Omdia’s Michael Frank, and Tata Communications’ Corey Smith weigh in during a winner-take-all debate from Streaming Media Connect 2025.
Ad Revenue as the Primary Driver of Sports on Streaming
Omdia Principal Analyst, Media & Entertainment, Michael Frank opens the conversation by wondering if the significant growth in subscriptions among streaming services, such as Netflix, Prime Video, Paramount+, Peacock, and Apple TV+, is directly correlated to their acquisition of sports content. Frank notes that “sports is one piece of content where … people will never be bored of it. It’s going to keep growing and growing and growing. … Is sports the only piece of content left where people will pay for it?”
Streaming Video Technology Alliance CEO Jason Thibeault disagrees that viewers paying for sports is the element to focus on. Instead, the primary driver of sports rights purchasing is ad revenue, he says, because live sports attract large concurrent audiences, leading to higher CPMs and better ad targeting. Thibeault explains that “you can’t guarantee there’s going to be millions of people watching VOD at the same time. And it’s when you get a mass of people that you can actually get really good CPMs, you can get much better targeting.” He assumes the streamers are thinking, “[I]f I can pull 30 million people concurrently in to watch something, my CPMs are going to go to the roof. I’m going to be selling ads big time.” Streamers are making a sound business decision by leaning into sports because “they are the biggest money maker.”
Taking Advantage of the Last Bastion of Appointment Viewing
Frank agrees that ad revenue drives these decisions; however, he counters, “Wasn’t the whole initial idea of streaming to get away from ads, where people didn’t have to sit through commercials?” He turns to Joe Caporoso, president at Team Whistle, a DAZN company, to speak from a streaming perspective.
Caporoso says he acknowledges Frank’s point, but that the monetization potential is too big to ignore. “There’s not as much what we would call appointment viewing anymore with how Balkanized distribution is and how people consume different styles of content,” he explains. “I think yes, you are seeing a continued investment due to some of the upside and consistency that an audience brings around live sports,” which Caporoso calls “sort of the last appointment viewing. … And I don’t think it’s crazy that major streamers would try to take advantage of that.”
Making the Investment Back Without Alienating Sports Fans
However, because sporting events are such tentpoles and cater to such large fandoms, Caporoso cautions that it is on streamers “to continue to look at creative ways to make the advertising experience less intrusive on the fan. And I think they’ll continue to have different ways that they test against it. But I don’t think you’re going to see investment on sports or sports rights generally slow down,” which he attributes to “a large consistent monetization opportunity there that’s not quite as volatile as some of the different VOD approaches when people are just consuming content in too many different places and in too many different ways.”
Tata Communications’ Deputy General Manager, Media Enabled Services Corey Smith joins the conversation by highlighting the financial necessity of ads to offset the high costs of sports rights. “[B]ecause of the ad-generated legacy model of sports and television in general, you’re not making up the money on the difference with subscriptions on streaming packages and services of that nature to make up what you’re spending on the overall media rights deal to begin with,” he notes.
Frank confirms that ads are the only way to make up the money spent on sports rights. Smith lays it out plainly: “$4 a month for a streaming service isn’t going to make the $10 billion media rights package turn over and be profitable.”
“Let’s take this back to the point of this debate: sports rights hurting fandom,” Thibeault pipes up. He enumerates the elements of the problem: “So, you got sports rights, expensive; streaming company buys it; charging people money to watch it; doesn’t make enough money. Let’s throw ads in there. So now you’re pissing off your fan by just layering in a bunch of ads and monetization because you need to make money against the amount of money you spent to get the rights in the first place.”
This problem wouldn’t exist if sports were available only through traditional television, Thibeault concludes. So, the answer to the question about the sustainability of streaming sports rights is, as with so many areas of the streaming landscape: It’s complicated.
Join us in May 2025 for more thought leadership, actionable insights, and lively debate at Streaming Media Connect.
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