Sports rights holders risk ‘squeezing out’ young fans amid streaming fragmentation

By Dak Dillon January 31, 2025

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With 66% of fans struggling to access content and only 19% of executives believing the industry is responding effectively to changing viewer habits, sports rights holders face a looming crisis as complex distribution strategies and rigid pricing models risk alienating younger audiences, according to research from Altman Solon.

“We’re getting to a point whereby making it difficult for many fans to access content has gotten to a point whereby some of the younger generation are losing interest,” said David Dellea, director of the sports practice at Altman Solon. “Are we getting to the tipping point?”

The findings are part of the firm’s comprehensive “2024 Global Sports Survey,” including feedback from 220 senior sports executives and 3,000 consumers across five countries, with the data released in a five-part series analyzing the future of sports media. 

The firm’s research found 65% of sports executives express growing concern about maintaining live sports’ relevance, with access difficulties particularly impacting younger viewers. Approximately 75% of those aged 18-24 report challenges accessing sports content.

How we access content has changed

While many organizations point to growing social media engagement and highlight consumption as positive indicators, Dellea warns this creates a false sense of security.

“We never have to forget that 95 plus percent of the sports industry lives off live consumption. It doesn’t live off highlights. That’s not a huge revenue driver, it’s just a minor one,” Dellea said. “It’s very dangerous to just kind of throw live out of the window. Because one drives revenue, the other one doesn’t.”

The study found 43% of consumers express interest in sports but are unwilling to pay current prices. In some markets, fans must stack multiple streaming subscriptions, with annual costs reaching as high as $816 to follow a single league.

The sports business is in a moment of transformation

Formula 1 offers a compelling template for successful adaptation. Since changing ownership, the racing series has dramatically transformed its media strategy through initiatives like its Netflix documentary series “Drive to Survive,” expanded U.S. presence through ESPN rights deals, and direct-to-consumer F1 TV platform. These moves have helped reduce the average age of F1 viewers from 44 to 32 while driving impressive financial results–F1’s revenues grew from $1.8B in 2017 to $3.2B in 2023.

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“F1 obviously is a product that underwent a tremendous amount of transformation since the change in ownership,” Dellea said. “Here actually was one of the best examples of positive impact of private equity onto a property… an amazing example of someone who early on understood the power of on-demand and storytelling through series like Drive to Survive and literally using that as an amazing funnel to drive people back to live sports.”

Another template is a move towards direct-to-consumer offerings.

Dellea noted sports organizations increasingly view these platforms as strategic assets that can provide leverage in rights negotiations while enabling experimentation with distribution models.

“The question mostly today is less so should you have a direct-to-consumer kind of proposition? The answer is always yes,” Dellea said. “The question is how do you size it? How do you make it sustainable?”

“You could spend 20, 30, 50 million on a D2C platform. You can spend 100,000. Completely different sizes.”

The end of the bundling golden age

For four decades, sports thrived on a bundling model where cable providers packaged sports channels with basic subscriptions, ensuring broad distribution and steady revenue streams. However, the streaming revolution, led by Netflix, has fundamentally altered consumer expectations around content access and pricing. 

“Consumers are probably spending less for a wealth of access to content they had before,” Dellea noted.

This shift means rights holders need to fundamentally rethink distribution models that have historically prioritized revenue maximization over accessibility.

“I think we need to rethink the model in terms of how we go about the distribution of live content,” said Dellea. “Rights owners are now starting to understand that it’s not just about optimizing revenues. It’s about really thinking big and thinking how do we sustain the long-term interest and consumption of our sport.”

“Bundling has worked beautifully for the sports industry for four decades,” Dellea said. “Going towards an approach of unbundling and really looking at each individual right and trying to be very transactional… has the potential of putting a number of rights owners in difficulties.”

This transformation is attracting a diverse new set of investors, from private equity firms to sovereign wealth funds, who see opportunity in both traditional sports properties and the technology infrastructure needed to modernize them.

The challenge is significant enough that 62% of sports executives now see technology solution providers as the most attractive investment opportunity over the next 3-5 years, according to Altman Solon’s latest research.

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Within the broader sports media ecosystem, which spans from media rights owners (~ $75B market) to broadcasters (~ $700B market), there’s a crucial middle layer of technology and production services that is becoming increasingly strategic as the industry evolves.

Going beyond bundling to address media challenges 

To address these challenges, rights holders must expand distribution beyond traditional media partners, introduce flexible pricing tiers while protecting premium offerings, build stronger connections with digital communities and prioritize sustainable fan base growth over short-term revenue maximization.

The monopolistic nature of sports rights often impedes rapid adaptation.

“To be able to operate like that, you need support from your stakeholders… which brings in a lot of politics and stakeholder engagement as part of how you need to operate a sports organization,” Dellea explained.

However, when pressured, the COVID-19 pandemic demonstrated the industry’s capacity for transformation.

“Interesting enough, that unleashed a tremendous amount of interest into going through transformational projects,” he said. “That explains the fact that a lot of the things that are not happening is often a bit of a mindset issue.”

“Rights owners are now starting to understand that it’s not just about optimizing revenues,” Dellea concluded. “It’s about really thinking big and thinking how do we sustain the long-term interest and consumption of our sport for generations to come.”

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