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Ott and the Changing Face of Sports Consumption

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Ott and the Changing Face of Sports Consumption CHRIS ARGYLE-ROBINSON | CHRISTIAN KNAEBEL ISSUE 15 | AUTUMN 2017 | THE MAGAZINE OF SPORTS MARKET INTELLIGENCE MLB IN LONDON OTT AND THE CHANGING FACE OF SPORTS CONSUMPTION PLUS WORLD BOXING SUPER SERIES • F1’S MURRAY BARNETT • TENNIS SPONSORSHIP TM1 “ WE DELIVER BOXING BESTTM 2 ” Broadcasters and streaming media companies worldwide count on Protocol Sports Markeeng to deliver Boxing best. Our Protocol Boxing Premium Package supplies broadcasters and streaming media companies with countless live championship boxing events each year, alongside taped archive through our “Prime/Time Boxing” series, and weekly news and features via our acclaimed “Boxing World Weekly” property. Protocol’s experts curate the very best Boxing content, tailored exclusively for our customers’ needs. We make Boxing easy. Inquire now at [email protected], and let us demonstrate how we can deliver for you. WWW.PROTOCOLSPORTS.COM TM1, TM2, TM3, TM4 ARE PROTECTED TRADEMARKS www.sportcal.com AUTUMN 2017 Sportcal Insight 3 “‘OTT is killing broadcast’. That’s a misnomer” Disruption. That’s a misnomer. It’s fast become the ‘mot du jour’ in the sports OTT is value adding… at least at this moment in media industry. its lifecycle. Almost every deal done with a digital No longer pejorative in meaning, it’s now the platform has been in partnership with a major go-to description for the change in the broadcast broadcaster – whether it’s streaming network- market brought about by over-the-top (OTT) televised sport or complementary second-screen viewing. programming. It’s been two decades since Clayton Christensen, The PGA of America talked a good game when, the renowned Harvard Business School professor, having ended a deal in the UK with Sky ahead of the defined the concept of ‘disruptive innovation’, a 2017 US PGA Championship, it said it was heading Jonathan Rest principle whereby a dominant product or service to where the youth reside: to Facebook and Twitter. Editor provider could have its leadership position And it did. But it also signed a live TV deal with Sportcal Insight disrupted by smaller rivals offering simpler and/or the BBC, that great guardian of tradition. cheaper solutions. For rights-owners, there are of course additional It’s a concept that has played out in the transport revenue streams and a new, younger set of eyeballs, (think Uber) and travel (Airbnb) industries. but ratings remain paramount. Digitisation has certainly taken its toll on the music But change is coming. and entertainment sectors. Remember cassette In PwC’s Sports Survey, published in late tapes - CDs even - and Blockbusters, anyone? September, David Dellea, director, Sports Business In linear TV, live sports remain one of the last Advisory, PwC Switzerland, writes: “What are sports bastions, having been relatively unscathed by the industry leaders telling us? The message is loud and advent of digital. clear: the industry is undergoing more disruption For how long? than ever. Linear TV is experiencing decreasing In the fast-moving OTT space, predictions are the ratings and revenues. Global tech giants are slowly job of the brave. Or stupid. but surely entering the rights market. So here goes: the mainstream media will buy “These developments leave us with no doubt that the story in the weeks and months ahead that the big tech firms are gearing up to play in the sports likes of Amazon, Facebook and Google will mount rights market in earnest, either in direct competition serious challenges to the incumbents Sky and BT for premium rights or through broader partnerships. Sport for domestic Premier League rights when they The question then is, when is this tipping point hit the market. going to be?” There’s no-one quite like the Premier League Decade-long rights deals in USA have protected at engineering an auction for its rights. After all, the traditional TV broadcasters, perhaps not from both BeIN Sport and Discovery Communications actually losing rights to the new digital brigade, but were used in recent cycles to provide the illusion of certainly from engaging in a bidding warfare that competition. threatens to put greater pressure on the balance But let’s be honest, even the dip-pocketed sheets at a time of cord-cutting and shaving. Amazon will not go from a £10 million ($13.5 Come the early years of the next decade, the million) a year outlay on ATP tennis rights in the UK picture will look very different if digital players to the billions of pounds needed to wrest control of continue to build up their portfolios, as they seem the richest league in soccer. entirely intent on doing. And I’m not sure the Premier League will jump in When researching this piece, an executive at a two-footed either. major sports property told me: “OTT is here now. The Premier League may well carve out a package It’s offering change, yes there are still some pitfalls, of rights, something Simon Brydon alludes to in his but it’s only going to get more compelling as excellent analysis on page 31, but there’s no way it technology advances. will put all its eggs in one basket at this stage. “What of TV? I have no idea as to the future of As it stands, it appears the big digital media linear TV in the next 10 years. I think I’d be better to companies do not value live sports rights quite as invest in a lottery ticket before answering that.” much as traditional media companies do. The revolution is under way. The very threat of them bidding, however, is Will the revolution be televised? That’s one for the enough to set off a stream of obituaries: ‘OTT is business professors. killing broadcast.’ TALK DIRECT TALK DIRECT [email protected] 475 www.sportcal.com AUTUMN 2017 Sportcal Insight 5 Contents Contributors Chris Argyle-Robinson is a strategy director at RedTorch Christian Knaebel owns Global Media Consult Simon Brydon is a consultant with Pitch International LLP Mike Laflin is Chief Executive of Sportcal News analysis Cover Story Jonathan Rest 06 A change in the organisation of the 26 As over the top viewing disrupts Editor, Sportcal Insight, Commonwealth Games the way sport is consumed, are writes on events, bidding 08 Rugby World Cup 2023 bids rights-owners ready to make the and US major leagues 12 Creative thinking needed in soccer ultimate leap? 14 PGA Tour’s London aims Callum Murray World Boxing Super Series Editor, Sportcal Insight, Opinion 34 Weighing up the commercial prospects specialises in the IOC and 16 Chris Argyle-Robinson on getting for the $50-million competition international federations the fundamentals of OTT right 17 Christian Knaebel says there’s no Major League Baseball Krzysztof Kropielnicki time to lose 38 The latest North American league to Head of Sports grow its London presence Market Intelligence Murray Barnett 20 The Formula 1 sponsorship chief on Sponsorship Martin Ross the changing face of the series 42 The brands battling for supremacy Online news editor, is a in elite tennis broadcast rights and sports agencies expert Index 475 48 Key information on the events, people Simon Ward and deals driving the sports business Deputy editor, Sportcal, specialises in sponsorship and Asian market TALK DIRECT [email protected] 6 News Analysis Insight Autumn2017 End of road for men from Del Monte The recent establishment of CGF Partnerships, a joint venture of the Commonwealth Games Federation and Lagardère Sports, marks a major step change in the organisation of the games. By Callum Murray Time was when the CGF used to hand over all of its marketing and broadcasting rights to organising committees of Commonwealth Games, along with a list of milestones and obligations that they were expected to achieve, from bid to legacy, and then leave them to get on with it, albeit with some guidance and support. “The men and women from Del Monte would occasionally come in to inspect the fruit,” is how David Grevemberg, the CGF’s chief executive, characterises the process. Now that’s all changed. In an exclusive joint interview with Andrew Georgiou, Lagardère Sports’ chief executive, Grevemberg tells Sportcal Insight that the appointment “We needed to change the delivery doing two things. Firstly, by responding of an agency had “been on the books model,” Grevemberg says. “We need to to the market, and the reality that under for two and a half years,” ever since the make the games far more efficiently and current market conditions hosting publication of ‘Transformation 2022’, effectively run, to be far more innovative events is a real challenge for all sports outlining the CGF’s “vision, mission, but also more affordable. We need to and entertainment in general. We need values and strategic priorities” in 2015. be the controllers of our own destiny, by to be more fit for purpose. www.sportcal.com AUTUMN 2017 Sportcal Insight 7 “It’s about maximising revenues “Our sponsors are global “We need to make the games and going to the host city to say brands. We need to be far more efficiently and we can reduce the overall cost.” where they are” effectively run” Andrew Georgiou, Lagardère Thierry Pascal, PGA David Grevemberg, CGF Autumn2017 “Secondly, we want to be the industry cities, with increasing costs versus value “We become an active participant. thought leader. We want to be regarded return. We see that as an issue based on We won’t stop organising committees as an innovator of the industry because the specific knowledge and expertise in making decisions about how and where of the complexity and distinctiveness of our organisation, which is almost unique to spend their money, but it gives them the Commonwealth Games.” in our business.” ammunition based on previous games, The appointment of Lagardère Lagardère was involved in Rio de so they don’t need to re-invent the was “not really an appointment,” Janeiro’s successful bid to land the 2016 wheel – benchmarking what it costs, the Grevemberg adds (both parties have Olympics, and has been moving more ability to really manage costs.
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