New game, new rules for sport
By Kate Bulkley
For Broadcast December 07, 2017
Money is no longer the key factor when it comes to sports rights, says Kate Bulkley
In the world of sport, there is usually perfect clarity: somebody wins and somebody else loses.
The battle for live TV sports rights has similar criteria for success, and he who pays the most money usually wins. So it will likely be with the next English Premier League auction, when we shall see how much appetite there is among the big tech platforms, led by Amazon and Facebook, to bid against established players Sky and BT Sport.
But even as the EPL auction plays out, the simplicity of win/lose based on the biggest cheque is starting to slip.
In the digital world, sports rights holders and sponsors alike demand to know more about their audiences and how to engage with them. It’s not that they didn’t always care, but the internet and data collection have changed the game.
It’s no longer simply the size of the cheque that matters to rights holders – though let’s be honest, a large cheque does help – nor is it simply the sheer size of the audience. Increasingly, rights holders and sponsors are looking for nuance.
Louise Johnson, managing director, EMEA, of marketing organisation Omnicom’s sports and entertainment agency Fuse, says that a new valuation and monetisation model is needed that goes beyond the media value of live sports rights.
“Brands recognise that live linear TV broadcasts are not where younger audiences are spending their time”
Sponsors realise that the better you are at engaging with audiences, the more value they are going to get for their money, she says.
Brands also recognise that live linear TV broadcasts are not where younger audiences are spending their time. According to Enders Analysis, TV viewing among 16 to 34 year-olds is down 12% for the first nine months year on year and, of course, much of that is going to YouTube and SVoD services.
My favourite recent story on the proclivities of youth comes from a senior Uefa Champions League executive speaking at an event on sport organised by consultancy firm Alvarez & Marsal. He said he and his wife had to bribe their teenage son to sit through a 90-minute football match on TV.
“He enjoyed it but what he was interested in was Neymar, not the club he was playing for,” he said. The Brazilian footballer has 36 million followers on Twitter and 85 million on Instagram; sponsors and rights holders are no longer willing to ignore such huge audiences.
Johnson says measurement of these digital audiences needs to evolve, particularly for younger audiences, because brands are starting to demand “fan-first” strategies from their broadcast partners.
“Traditional broadcasters are putting up walls for their fans and things that they care about, and this won’t hold,” says Johnson.
Many sports owners are taking up the digital challenge themselves. The National Basketball Association (NBA) has hundreds of staffers pumping out social media messages with clips and other interactive and fan-focused content.
The idea is to engage current audiences more fully while reaching out to new ones. Leveraging on-court talent is a big part of the push, using NBA stars’ social media followers to raise the sport’s profile.
The new approach to audiences is also illustrated by Amazon’s $50m (£37m) purchase of the digital rights to 10 NFL games earlier this year. The deal allows Amazon to live stream to its estimated 85 million Prime Video service subscribers.
According to the NFL, an average of 372,000 watched the first game on Amazon (with 1.9 million viewers overall) versus 14.6 million watching on conventional TV.
Some experts looked at the audience figures and scoffed, but for Amazon, the audience figure was not the only – and maybe not even the most important – thing. Amazon is a mega-retailer and adding the NFL was a way to attract new Prime Video subscribers.
Amazon knows these subscribers will use the site more for e-commerce and that benefits Amazon long after the NFL games are over.
That’s a different business model entirely. New game, new rules