The value of sports media rights have reached a ‘high-water mark’, according to 83 per cent of respondents in a new study.
Digital consultancies Seven League and parent company Mailman arrived at the figure after questioning 30 sports business executives, representing broadcasters, media agencies and sports with a cumulative global audience of 4 billion.
According to the study, the coronavirus pandemic has accelerated the sports industry’s transition into a third age, where digital disruption is affecting every area of the landscape, including content, sponsorship, data, streaming and competition for audience attention.
Sports Media Rights Survey : ‘Industry has reached inflection point, time for media rights to correct’
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Referring to the figure, the report (The 3rd Age of Sport – a manifesto) claims that the industry has reached an inflection point in which it will need to diversify revenues to plug the gap in falling broadcast fees. With business-to-business (b2b) revenues coming under threat, it says right-holders will need to pivot to new business models around e-commerce, streaming, ticketing, subscriptions, sponsorship and membership.
The 3rd Age of Sport manifesto, produced by sports digital agency Mailman and the Seven League consultancy, is based on consultations with 30 sports executives with direct experience in rights negotiations, the overwhelming majority of whom believe that a rights correction is due.
Describing now as sport’s ‘Napster moment’, the study claims that the industry’s established B2B revenues are under threat, meaning it will need to adapt in the wake of Covid-19 by addressing how it is structured and where it derives its income.
As a result, the manifesto calls on sport to end its over-reliance on broadcast fees, diversify its revenue streams and become a ‘fully-rounded media business’ that incorporates ecommerce, streaming, ticketing, sponsorship, membership, loyalty and wagering.
“While we may have reached Everest with many media and sports properties, international audiences are proving to show sports are increasingly becoming more global and with that presenting new broadcast and digital rights opportunities,” said Mailman Group chief executive Andrew Collins.
“Global platforms such as Facebook, YouTube and Twitter have accelerated the need for an international ‘multi-platform, multi-product’ strategy – rights holders who are able to adapt quickly should realise gains.”
The manifesto points out that the types of content people consume is evolving, while it also argues that sports rights owners now face stiff competition from new media properties that focus on athlete journeys, back stories and lifestyles.
The study adds that the democratisation of the ability to broadcast means sports are also competing with the voices of young creators who are native to the digital platforms that they use.
Therefore, the manifesto advises that sports look to develop more direct relationships with their fans by developing new business models around ecommerce, subscriptions and membership.
“Digital transformation has given sports the opportunity to go direct to consumer, but the same power has been given to everyone else,” added Seven League chairman Richard Ayers. “Amazon and the other big tech companies are the gatekeepers. Sponsors can be more certain of their ROI by going direct. And those who have the data have the power.
“Meanwhile, people have become fixated on “owning the audience” when the audience does not want to be owned. Trust is the currency of the future. Sports must master the value exchange, and through that build trust.”