Facebook (NASDAQ:FB) is swinging for the fences with a new, exclusive deal to stream 25 Major League Baseball games this year. Once per week, beginning April 4 with a game between the Philadelphia Phillies and New York Mets, Facebook Watch will feature a Wednesday day game produced by MLB Network. Not only is it the first digital-only broadcast for the league on the social media platform, but it marks Facebook's push into the big leagues of sports broadcasting.
In the big leagues
Sports packages are an increasingly valuable service that until relatively recently were the province of TV networks and cable operators. But more and more we're seeing streaming outlets encroaching on their turf, giving additional momentum to those seeking to cut the cord with cable and satellite TV.
Amazon.com (NASDAQ:AMZN)recently secured nonexclusive U.S. rights to broadcast pay-per-view packages of Ultimate Fighting Championship (UFC) live events. In 2017, Amazon live-streamed 11 NFL Thursday Night Football games.
Amazon also has a number of other niche sporting events that it carries live, and Snap partnered with Comcast's NBCUniversal to broadcast snippets of the 2018 Winter Olympics live from PyeongChang, South Korea.
It's clear even the sports world understands that cable's reach is waning, and it needs to use new mediums to reach out to fans.
Of course, this isn't Facebook's first foray into sports. Last season, the social media platform live-streamed 20 Friday MLB games in conjunction with the teams' local television broadcasts. It also had deals last year to stream European soccer games, broadcast live soccer games from Mexico, and stream dozens of college basketball games. But this agreement is Facebook's first exclusive deal, and it's one that could help the baseball league as well.
Betting big on America's pastime
Baseball viewership is on the decline. The 2017 season was the third consecutive year that viewership had fallen and the first time in 15 years that the total number of viewers fell below 73 million. But unlike the NFL, where teams play just 16 regular-season games over a 17-week period, MLB's 162-game season allows the league to test out many different avenues to attract more eyeballs.
Partnering with Facebook gives baseball an opportunity to tap into a younger demographic than it might otherwise find on cable. Equally important for the sport, the agreement will "allow for experimentation with things like social integration and graphics during the broadcast, enhancements popular with younger viewers drawn to digital platforms," according to Bloomberg.
Because the games will be produced by MLB Network, they will also project broadcast quality to viewers. The risk for Facebook is whether anyone will watch a nine-inning baseball game, which is more than three hours long on average, on a mobile phone. Much of what's on Watch is only a few minutes long.
The MLB deal, however, also includes weekly recap packages for all 30 teams that will be available on Facebook Watch, giving the social media platform another programming avenue to capitalize on beyond the games themselves.
The better play for engagement
Facebook is looking to increase engagement with its users by developing more original content. Last year, The Wall Street Journal reported that Facebook was willing to spend upward of $1 billion on original content for its Watch tab. While financial details of its current agreement with MLB weren't released, it's estimated Facebook spent $30 million to $35 million to secure the rights.
Other platforms are also looking to develop more outside content for users. Google, for example, which is Alphabet's (NASDAQ:GOOG) (NASDAQ:GOOGL) division that houses YouTube, won a two-year extension on its World Series Presented by YouTube TV pact with MLB that will run through the 2018 and 2019 seasons.
It's not essential that Facebook become a sports-programming powerhouse for cable to be the big loser here. While Facebook's sports deals may not make you cut ties with your cable operator, by simply keeping its users more engaged, Facebook increasingly makes its site the premier destination for entertainment.
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Rich Duprey has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), Amazon, and Facebook. The Motley Fool recommends Comcast. The Motley Fool has a disclosure policy.