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Sports Media: Household distribution for sports networks continues decline, but erosion ‘orderly’

MLB Network saw a 12% drop in household distribution over the past two years.getty images

Cord-cutting is accelerating at such a clip that the number of multichannel video homes in the United States dropped more than 10% over the past two years, according to Nielsen’s monthly household universe estimates.

 

But national sports networks — typically the priciest channels on cable systems — have seen a much slower rate of erosion over that two-year time span from January 2020 to January 2022.

Household distribution for ESPN and ESPN2 dropped by 4%, while subscriber numbers for FS1 and NBCSN, the sports channel that went dark for good on Jan. 1, both dropped by only around 2% in the past 24 months.

Overall, the Nielsen report shows that the number of homes that subscribe to multichannel video — cable, satellite or a virtual multichannel video provider such as Sling TV or YouTube TV — fell to 82.8 million. That’s the lowest figure in at least 16 years, which is as far back as SBJ’s records go. In January 2006, before cable’s meteoric rise in subscriber numbers, Nielsen estimated more than 93 million multichannel subscribers.

Almost all cable networks have seen their distribution fall below the 80 million-home mark. Only six of the 135 channels included in Nielsen’s research are in more than 80 million homes, and five of those are owned by Discovery: Food Network (81.49 million), HGTV (81.45 million), Discovery Channel (80.45 million), Investigation Discovery (80.43 million) and TLC (80.11 million), according to Nielsen’s January report.

TBS (80.01 million) is the only other network above 80 million, and it, along with other Turner channels, is about to be acquired by Discovery as part of a deal expected to close early this year.

Nielsen puts out these subscriber counts each month estimating how many subscribers each network has. The list only includes Nielsen-rated homes, so channels that aren’t rated by the company, like ACC Network, CBS Sports Network and SEC Network, aren’t included.

While the research provides a good general snapshot of the distribution business, many networks have complained that some of the household counts are off. 

Take ESPNU, for example, which lost nearly 16 million homes over the two-year period to wind up with just 44.85 million homes, according to the report. An ESPN source said ESPNU’s distribution is closer to 54 million currently. The problem: Nielsen’s estimates include homes that receive linear TV ads. ESPNU doesn’t use linear ads for its digital MVPD subscribers. ESPN Deportes, which shows a 31% drop in the report, has the same issue.

Still, sources say the overall downward trend from January 2020 to January 2022 is accurate and shows that cord-cutting, so far, is happening more slowly for sports networks.

Entertainment networks that have sports on their schedule, like USA (down 9%), TBS (down 8%) and TNT (down 8%) saw even bigger drops over that two-year span.

Two league-owned networks saw particularly steep declines over the last two years, with distribution for MLB Network and NBA TV both dropping 12%.

NFL Network was one of just three sports networks to register an increase over the two-year period. Its distribution rose 5% to 57.45 million homes — the biggest distribution among all league-owned sports channels.

FS2 (up 5% to 60.57 million) and beIN Sports (up 7% to 13.54 million) are the only other channels to show an increase.

In a report released last week, financial research company MoffettNathanson pegged the rate of subscriber decline at 5.2%, “among the worst on record and is undoubtedly worse than we and others had once over-optimistically projected.”

There is good news, according to the report. The rate of decline is “orderly,” which means a gradual decline that will give media companies time to figure out how to transition from linear to digital.

“But there is clearly a risk that the declines become disorderly,” the report said. “All it would take is one major player — ESPN is the obvious candidate — to decide that the future demands a bolder shift in their best programming to [direct-to-consumer], or, alternatively, that their entire suite of programming should be simultaneously available DTC … and the Jenga tower would collapse.”

John Ourand can be reached at jourand@sportsbusinessjournal.com. Follow him on Twitter @Ourand_SBJ and read his weekly newsletter.

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