With sports rights owners facing an ever evolving and changing global distribution landscape, it is paramount these entities implement a diversified and integrated approach that advances their many competing objectives. We asked media executive Sal Siino how these owners are responding to this changing environment and what we can expect next.
The first step is typically the clarification and prioritization of the potential goals in both the short and long term.
1 – Has the ultimate goal of sports right owners changed?
No. Revenue maximization remains the ultimate goal for every sports entity. Other, seemingly universal goals are the achievement of the greatest viewership reach possible to foster fan base expansion, increased merchandising and ticket sales opportunities, and overall brand enhancement. These goals, however, are typically tradeoffs to each other. More specifically, the biggest license fees routinely come from Pay TV networks with smaller audience bases – and not the more ubiquitous free-to-air (FTA) television networks that achieve the greatest viewership ratings.
2 – How has content distribution in sports been impacted by digital and social media?
With the meteoric disruption from digital and social media networks over the last several years, just about every sports entity now allocates (or claims to allocate) prioritized resources towards the distribution of its content on YouTube, Facebook, SnapChat, Twitter, Instagram, etc. In addition, the more progressive organizations are also testing their content with the top emerging technologies such as virtual and augmented reality. Clearly, organic fan engagement and exposure to the digital first (or digital only) generations are vital for the future of sports – especially those with the most aging fan bases.
3 – Has this impacted the bottom line for these sports owners? What challenges are they facing?
The challenge with these digital and emerging platforms is that the cost per hour of exclusive content is typically a small fraction of the license fees that can be generated through traditional broadcast distribution. It should, however, be noted that Facebook, Amazon and even YouTube to a lesser extent have been begun testing and bidding broadcast-like amounts for premium sports rights. If these early tests demonstrate a path to positive and sustainable ROI for companies like Facebook and Amazon, the rules of the distribution will be forever changed.
4 – How can an owner determine what distribution method is best for their organization?
As I mentioned, sports entities are faced with an array of content distribution options that each advance different competing goals at the expense of others. The most progressive sports organizations are not committing to a single approach. Instead, the ideal scenario is akin to an optimally diversified investment portfolio that maximized potential return while minimizing risk exposure. More specifically, these sports entities go to market with multiple rights packages customized for each category of distribution. These packages often include some combination of live games, game re-airs or cut down versions, highlights and short-form programming created specifically for social/digital platforms.
5 – What professional league has been the most successful in the face of this new environment?
The best example that comes to mind is the English Premier League (EPL). In its most recent United Kingdom rights bidding process for the season beginning in 2019, the EPL essentially created distinct packages of games for Pay TV, free-to-air, digital platforms and highlights.
The net result of the EPL UK bidding process was that the big revenue came from the distribution of 180 games to Sky Sports and BT Sports – the two premier pay TV sports networks who historically have paid the most for sports content in the UK. In addition, the EPL agreed to distribute 20 games exclusively through Amazon – essentially dipping its toes into this digital first distribution world. As a third leg to the distribution strategy, for significantly less money, the EPL agreed to provide game highlight packages to BBC Sports, a ubiquitous FTA channel that will reach the masses in UK. In addition, the EPL retained the rights to distribute its highlights and other short-form programming content on social media. I would also anticipate that the EPL will partner with its broadcast partners to further test emerging opportunities such as VR.
When the various pieces are looked at in totality, the EPL’s diversified approach achieved all of its top objectives. It is no surprise as the EPL is the generally regarded as the most successful sports league in the world.
6 – How does this apply to the U S?
There’s less distinction and less of a delineation between paid and free TV in the US. ESPN is a paid provider and has almost the same market penetration as a free channel like CBS. Sports entities distributing in the US take a very similar approach with the one distinction being there’s less of a gap in market penetration between paid and free TV. The advertising market is also more robust than international counterparts.
7 – Can the exclusive distribution partner model survive?
In short, no. In past years, it was commonplace that sports entities had exclusive distribution partners for all of its games, events and programming. Today, any sports organization that still deploys this antiquated approach will struggle to keep up with the competition.
Sal Siino is a media executive with significant experience in content distribution and former Senior VP of Global Content Distribution and Business Development at WWE. Prior to this, Sal was Co-Founder, President and Chief Operating Officer of WeMash, where he connected premium content owners, including movie studios and sports entities, with video artists, filmmakers, and musicians to re-imagine content beyond its original context. Sal also served as EVP, Partnerships & Chief Revenue Officer of Bedrocket Media Ventures, where he partnered with established brands and category leaders including Univision, PGA Tour and Major League Soccer, to develop pioneering online destinations and branded YouTube channels to reach audiences on all screens.
Top Public Relations News:
Will Smith “is an A**Hole”, blasts ex-Fresh Prince Star Janet Hubert
Fox News Needs to Rethink PR Strategy After Dish Debacle
Word Artists: Mel Bochner, Barbara Kruger Making a Statement on Canvas or Otherwise
RECALLS: Honda CEO sets an impressive standard
Miss Israel Yityish “Titi” Aynaw: Israel’s Public Relations Dream Come True
Media Relations RFP Issued By Texas Parks and Wildlife
Mylan’s CEO – Is She Just Another Greedy Bresch?
Asus Posts “Sexist” Transformer AiO Tweet
What Are the Goals of Facebook’s News Portal?
Public Relations RFP Issued By State of Alabama