Twitter

Stevens: Yahoo! streaming baseball games and Twitter streaming NFL games could be the demise …

Stevens: Yahoo! streaming baseball games and Twitter streaming NFL games could be the demise …

“Sports are keeping television as we know it alive.”

This is a popular thing to say in today’s streaming world, and it is probably true. No TV show pulls ratings in like a sports game, especially NFL or NBA games. When ratings are high, networks can increase the price of ad space and generate more revenue.

So when the news arrived that Yahoo will stream baseball games and Twitter will stream NFL games, both for free, it may seem like TV just took a huge step toward the end of the plank. But do not worry, TV will not die just yet.

Yahoo will stream 180 Major League Baseball games for free, marking the first time a streaming site will legally show free games throughout a whole season. Sites such as NBC Sports Live Extra and Fox Sports GO already stream many professional sports games, but only because they already bought the TV rights.  Plus, they require the viewer to have a cable package with their channel in order to access the stream. Yahoo’s MLB coverage requires no payment, just a Yahoo email account. Yahoo generates money by selling the ad space, and MLB can show out of market games to fans around the country.

Blackout laws remain the last and largest legal obstacle for streaming sites. When Yahoo streams a game for your favorite team during a home game, you might not be able to watch it. For example, when Yahoo shows two Yankees and Red Sox games later this month, people in Syracuse will be blacked out from watching. This is so the MLB can honor its deal with the local market and the network that won the expensive rights to that team’s TV deal. Yahoo’s streams will not take away viewers from local markets.

Later this year, Twitter will broadcast each of the Thursday Night Football games of the NFL season. The NFL is calling it a “tri-cast,” because each game will broadcast on Twitter, the NFL Network and either NBC or CBS, depending on the week. This self-competing deal will have bigger ramifications with revenue, because it will pull viewers away from the other two networks.

My guess is that the Twitter stream will be linked to the NBC/ CBS so that the same commercials air on TV and on your computer. However, the difference in the demographics of those watching on TV and those watching on Twitter will cause the advertisers to force the NFL to allow different ads for the different outlets. But like the Yahoo deal, the Twitter deal assures the networks remain in control of the broadcast.

The TV deals within the collective bargaining agreements of the MLB and NFL lay out how each team makes its money.  The largest sources of income for both sports, and the reason players get paid like royalty, are the TV deals.  The MLB runs a market-based system in which a local network bids for the rights to show its team’s games within a restricted area. The NFL has a national system in which NBC, CBS, FOX and ESPN each broadcast games, some locally and some nationally.

In both situations, the bids for the rights of these games get ridiculous. Just two years ago, Time Warner Cable and the Los Angeles Dodgers agreed to a $7 billion TV deal to last 25 years.  The current NFL TV contract guarantees the league $27 billion between 2013 and 2022.

So, as long as these billion dollar TV deals remain possible for local and national networks, TV won’t die. These partner deals with streaming sites will only increase the only large audience left on television. Diversifying the output of sports will not quicken the death of television as long as advertisers see the value of large audiences.