The phone calls from sports teams looking to strike a deal with Scripps has been ringing off the hook.
That’s according to Scripps CEO Adam Symson, who sat down with Cord Cutters News amidst the chaos of CES 2024. Symson shared his thoughts on why sports teams are keen to jump back into broadcast, why regional sports networks are “broken,” and the real opportunity that he sees coming out of the rollout of ATSC 3.0, also known as NextGen TV.
The following is a lightly edited transcript of our conversation.
Cord Cutters News: What is Scripps?
Symson: We’re a 145 year old media company that today is mostly focused on broadcast, the television business and digital.
Cord Cutters News: Talk about the state of the broadcast industry.
Symson: There are puts and takes on the broadcast industry, because on the one hand, we’re seeing intense fragmentation in the television ecosystem. We’re seeing consumers move towards subscription services. And we’re obviously watching the rise and ubiquity of cord cutting and the slow demise of the pay TV ecosystem.
And yet on the other hand, I like to say the broadcast revolution will be televised, because we’re also seeing growth in over the air, both from a consumer’s perspective, and recognizing that we’re at a moment right now, where the most important content genres for linear television are moving to broadcast TV: sports, live news, and that’s really become a critical part of the broadcast business.
Cord Cutters News: How does that square with Max offering news and streaming services increasingly offering sports? Streaming seems to be encroaching on what has been the last vestige of broadcast TV.
Symson: Most people have the narrative sort of upside down. We are seeing streaming participate in sports, but if you take a look at the vast majority of the changes and moves in the sports business with rights, things have moved into broadcast.
You have the most recent NFL deal which absolutely did grant Thursday rights to Amazon. But it also brought every single game back to broadcast television. So ESPN is simulcast on ABC with Monday Night Football. Then you have Sundays on CBS and FOX. Sunday nights on NBC. And that accounts for incredible strength.
When you think about the SEC deal that was done: back to broadcast television. When you think about the most recent deal that Disney just announced for the NCAA, with women’s sports Women’s March Madness and the other Championship Series. Disney has said that the premier events will be broadcast on ABC. The vast majority of sports is played at the local level. And those deals have all been slowly moving from the RSN model in cable, which is imploding, to broadcast television. And so what we’re doing is we’re really catalyzing that move at Scripps. We’re really leading the move of local sports onto broadcast, which for us is consistent with our desire to see the over-the-air marketplace grow.
Cord Cutters News: What are some key examples?
Symson: As we sit here in Vegas, last year, the Vegas Golden Knights were on AT&T Sportsnet. Yet they reached less than 40% of the households in this market. The owner of the Golden Knights wanted to ubiquitously reach consumers. And so he turned to us.
There’s a DTC product, which is paid, but really the vast majority of the revenue for the Golden Knights, the vast majority of the value being created around the sports rights is happening on free-to-air broadcast television. And that’s being replicated over and over and over across the country.
Cord Cutters News: You brought up the RSNs (regional sports networks), which are having financial troubles. What’s your general strategy for striking deals with those companies in trouble?
Symson: We launched Scripps Sports with sort of a two-fold strategy. On the national side, we wanted to leverage the broadcast platform of Ion in order to bring sports to the number five rated broadcast network. Ion is a boomer of a network that has big ratings, and we were looking to bring sports, recognizing that sports are critical to linear television.
And we’ve created a platform for women’s sports like nobody else has done, because we’re not just acquiring the rights and then sort of randomly plugging games. The problem with women’s sports is fans were never clear on when and where to find the games. We created franchise viewing opportunities for the WNBA and now for the NWSL. And the move we made to bring the WNBA to broadcast television as an example, dramatically increased their reach. So that’s one element of our strategy tied to national.
Locally, we’re one of the largest owners of local broadcast television stations. And so there we are swooping in as a result of the implosion of the RSN. The RSNs find themselves in economic difficulties. But it’s not because of the bankruptcy. It’s ultimately the underlying factor of the model being broken.
We come in and we say to team owners, look, that model is gone. Let’s figure out a way to partner that allows you to take some of the risk off the table, but we participate in a meritocracy where if we both do well we both have the opportunity for upside. We’ve got two deals that are public and live with the Vegas Golden Knights and the Phoenix Coyotes. And then there are several other deals that we have, essentially in various stages of being done but not announced because they’re tied up and in the bankruptcy issue (with Bally Sports). They would likely either become contingency deals if something falls apart in the middle of the season, or legitimately begin next season.
Cord Cutters News: How responsive have teams been?
Symson: The phone has been ringing off the hook. From a fundamental perspective, the industry is really there at this moment. Even if the economics of the RSN business didn’t push it into bankruptcy, the fact is local sports has essentially been suffering from declining reach as a result of cord cutting. And if you’re the owner of a local team, and you’re trying to create value, and you’re trying to perpetuate fandom, if me and my daughter can’t sit down on the couch and actually watch the game because we’re not paid TV subscribers, there’s no scenario that she’s actually going to become a fan, pay for tickets, pay for merch, and perpetuate fandom. So they’re realizing that the power of reach is going to be critically important to the value that you create with their franchises.
Cord Cutters News: Do you think the RSN model goes away completely?
Symson: I don’t think the RSN model goes away completely. But I do think we enter a period in which the RSN model is probably only viable in a handful of markets. And even then, I suspect, we see deals that bring some of the games either simulcast or cut out of the RSN model and put onto broadcast. Because even if the RSN economics are okay in a large market, the fact is that younger people are not signing up for pay TV.
Cord Cutters News: What are your thoughts on NextGen TV?
Symson: The opportunity for next gen TV for consumers is a higher quality product, immersive audio, the opportunity to use broadcast delivery for not just typical broadcast television, but for other data transmission and even FAST channels, or you could deliver a virtual MVPD on the back of ATSC 3.0.
NextGen TV’s greatest opportunity, I believe, is in wireless data. As an IP-based broadcast standard, that means that we can now broadcast off of our towers everything from video to data, they’re all just ones and zeros. And when you think about the demand mobile wireless networks are under with respect to video or just data. When we broadcast something. It’s one to infinity. When you talk about receiving something on your phone, it’s one to one, very inefficient. And so there’s a lot of applications in which a one-to-infinity application of push would be a really efficient use of data transfer.
Cord Cutters News: Could you give me an example?
Symson: I have a Subaru. I recently got a notice that said that there was an update for my software. All auto manufacturers have an obligation to keep the firmware up to date. As a result of their obligation, they ultimately will activate the LTE receiver and pay a lot of money now. We can hit, very efficiently, every Subaru in a market like this over and over and over.
Cord Cutters News: Are those cars compatible with NextGen TV frequencies?
Symson: No, you would have to have an ATSC 3.0 chip inside the car. So that’s the work the industry is doing now. The example I gave you is a good example to get our heads around but isn’t always necessarily the example that I think is the nearest case scenario because it would take a long time for the auto industry to transition to put 3.0 chips in all their cars. But there are other examples like logistics right? There are a lot less delivery trucks than there are. It’s that kind of efficient data transfer that I think is the greatest economic opportunity for broadcasters.
Cord Cutters News: What are you doing to take advantage of this business model?
Symson: We have a joint venture with Nexstar, because together we reached 92% of the population unduplicated we’re essentially the largest combined platform for broadcast spectrum and it’s called OTA wireless. And OTA wireless is in the midst of developing that market right now.
Cord Cutters News: In terms of the conversations you’re having, are folks receptive to this?
Symson: Yeah. Because there’s billions of dollars being spent on data transfer on mobile and wireless data transfer. And everybody is looking for greater efficiency. For the wireless companies, it’s not about cannibalizing them. In some cases, it may be even about partnering with them, because they’re also looking for offloading. There’s just so much out there and there’s so much demand.
Cord Cutters News: Any update with Tablo DVRs?
Symson: The fourth generation version today is a 1.0 receiver. It’s a decision of ours as to when we want to transition to 3.0 receivers and I don’t think it’s going to be too long.
Cord Cutters News: It doesn’t seem like the individual broadcasters have been pushing ATSC 3.0 too aggressively.
Symson: We and Nexstar have been aggressively talking about the opportunities for value creation. Sinclair has been talking about the opportunity for value creation. I think that I am reticent to get too far ahead and give investors a false sense.
Investors in Scripps are buying a media company, they get for free the optionality that comes with wireless data. I do believe it’s soon going to be a reality, but we’re not there yet. And so I think broadcasters are reticent to sort of make too big of a deal about it until the marketplace develops.
Cord Cutters News: What about for consumers? There’s still not a lot of consumer awareness about NextGen TV yet. Do you think that changes in 2024?
Symson: Certainly additional set manufacturers putting 3.0 chips into their sets is going to create greater awareness. But it’s incumbent upon broadcasters for us to have more than just higher quality video and better audio. From my perspective, those are price-of-admission items. We are fully supportive of the transition. We’ve been selling our markets, but from a consumer perspective, we have to make sure that we’re not just increasing the price point of a television with a new chip, so that we deliver an experience that’s essentially the same as the last experience, except crisper, sharper and more immersive.
At the end of the day, though, it’s about the content inside, and it’s certainly an opportunity for broadcasters because ATSC 3.0 allows us to deliver an app-like experience. But none of those are out and live yet. And so I think that has to come first before we see consumers get excited about it.
Cord Cutters News: I wanted to talk about blackouts from programming disputes. I don’t think you’ve had one for four years. But the industry is seeing more of them, and I’m curious if there’s a solution or is this just the way things are now?
Symson: You’re talking about the normal dynamic between operating companies that are trying to ensure that they are using their leverage best they can to improve their positions. The industry has been under revenue pressure, and so nobody wants to feel like they didn’t get a great deal. We just went through a period last year in which we renewed 75% of our subscribers. We didn’t have an impasse. We really, we really try to avoid impasses because it’s disruptive to our consumers. Nobody wants that. I don’t think any of my peers want those impasses.
I think it’s time for the players in the linear TV ecosystem, including MVPDs (pay TV companies) and broadcasters, to have a little bit of a different approach to working together, in which we look to identify ways for all of us to create greater value together and not in an oppositional way.
That’s not to say that I don’t want to make sure that we’re getting the greatest value from our retrans as pay TV is slowly declining. I expect us to continue to renew our subscribers and get the greatest value possible.
But when we’re sitting down with an MVPD and we’re talking about bringing live sports into the market, I’m willing to ensure that we’re being paid a reasonable amount for retrans while also recognizing that there’s a way for us to work together to ensure that by making sure that those games are available on the pay TV platform, their product remains vital and important to the consumer.
The Disney-Charter blackout ended in a win-win situation. From my perspective, it started out from a negative perspective, and ended very positively and I’d like us to sit down with the MVPDs and think collaboratively about how we can ensure that we’re all working together and for the health of the pay TV ecosystem.
Cord Cutters News: Does that include the virtual ones as well?
Symson: Absolutely. Yeah, absolutely.
Cord Cutters News: What are some of the big themes you’re seeing at CES 2024?
Symson: I spend a lot of my time with Tablo. This is sort of our coming out CES, and I think people are pretty blown away by the product. They’re pretty blown away by the consumer proposition. The fact that we’ve solved all of the challenges with OTA viewing for the cord cutter has been really compelling.
Sales are going really well. Retail sales will continue to be an enormous part of the Tablo business, but we’ve also been having some really interesting B2B conversations about bundling Tablo with other products so that we and other companies create value together in order to drive to scale. So I think there’s a lot of interesting opportunities out there for us.
Cord Cutters News: What sort of other products?
Symson: Media consumption, connectivity, retail, if you think about what we’ve got here. We’ve got a product that you pay for once and then you have free television forever. And that product makes free television easy, it works well as a live sports machine, so there are a lot of folks out there who recognize bundling their service or offering with Tablo would be good for consumers and provide additional economic benefits for themselves.
Cord Cutters News: Anything you’re looking forward to in 2024?
Symson: As an American, I am concerned that in light of all this fragmentation, we are losing our opportunities for collective memory and experiences. Growing up, I remember Kirk Gibson’s 1988 World Series, watching it live. The last episode of MASH. You recognize that so much of the American experience is tied to the idea that in real time, even if we weren’t on the same couch, we were all watching the same thing, and the next day, we were all talking about it.
In this fragmented and asynchronous world, it’s happening less and less. Products like Tablo create that opportunity. The move bringing sports back to broadcast supports that opportunity. Every Sunday, I sit down on the couch and watch the Bengals game with my daughter. That is sacred time, not because we love the Bengals, but because it became sacred time for the two of us to bond and make that appointment.
We’re losing that in the country. Sports is the one last thing capable of bringing people together at this highly polarized time. During the last night of the Stanley Cup, the area outside of the arena was filled with 100,000 people who didn’t have tickets, but knew they were winning, and all rushed to fill the plaza. I am sure that those people were not on the same political spectrum, all agreed with each other’s religious beliefs, all agreed with each other’s views on this, that, or other. And yet here you had this emotional opportunity for community where I can not think of another example where that exists. The key to that is the reach of broadcast television.