The digital age is tempting content owners to adopt a DIY approach and set up direct to consumer channels. Leagues and clubs have increasingly looked at TV channels and wondered whether new technology can strip out the mystery and let them market content to their own fan base.
Having all launched web sites and watched the growth of moving video and live streaming it’s not surprising sport’s content owners are thinking maybe they could cut out the broadcast ‘middle men’ and do it themselves.
We have seen sport-specific theme channels offering tennis and golf, in the UK BSkyB followed its acquisition of Formula One rights with the announcement of an F1 channel. Is any part of Bernie Ecclestone now thinking I could have done that myself?
Of course there is one very big reason for thinking twice. Selling media rights is a lot less risky than launching your own channel.
It’s not always easy to get the price you want for your rights but once the deal is done a governing body or club then knows how much it will receive over the term of the agreement. That is of critical importance to a football club working out what it can spend on players.
Look at the Scottish Premier League. Twice it has commissioned serious studies and spent a lot of time and energy puzzling whether to launch its own channel. Each time it has seemed close only for the clubs to decide better the devil you know and sell rights again.
Sometimes economic necessity will force a leap into the new media world. It has happened in the Netherlands with the Eredivisie and they have come through. It looked likely to happen for similar reasons in France until Al Jazeera came along.
I think we will see more league owned media for two reasons. Those who struggle to gain significant rights fees will take advantage of new technology and those who earn big fees will look at how much more they could earn if they controlled the whole chain.
That word control is important too. Clubs love having their own media where they can look after their sponsors and control what is being reported about the club.
What about the risk? I think the next step will be for private equity companies to underwrite the risk for a share of the channel. Agencies who help sell rights will suggest JV enterprises to leagues.
What will media groups do? This is where platform operators are in a much stronger position than channels. They will simply host the league or club owned channel.
Those who have both platform and channels such as BSkyB will do some number crunching and work out the best way to go. When the current F1 rights deal expires who would be surprised if it was replaced by F1 and Sky jointly owning the by then established F1 channel.
FIFA and the IOC? I think the governing bodies who produce limited content will face an extra challenge. It doesn’t work for them in the same way as a league which has over 300 matches every season.
There could be a way for the IOC though. I have long thought that an Olympic channel featuring all the different Olympic sports might be an attractive proposition. It could run alongside the big rights deals for the Summer and Winter Games and provide great promotion for those in and partnering the Olympic family.
If you look at how regular ‘Olympic’ channels like NBC and BBC focus on Olympic sports you can see how it might work.
So, the technology is there. A combination of market conditions and investors could see a lot of movement in this sector over the next few years.
Phil Lines is best known for the eight years he spent at the Premier League where he sold the international media rights taking their value from under £200m to £1.5bn. He began as a sports journalist and worked for both BBC and ITV before joining his first agency, ISL, and then selling F1 rights. More recently he spent 18 months with American agency, CAA, before becoming Head of Media for Europe and Africa at Lagardere Unlimited, overseeing Sportfive and IEC.
The views of our regular columnists are independent, and as such do not represent those of Leaders in Digital Sport.
THIS MONTH’S ARTICLES:
RICHARD AYERS (MANCHESTER CITY FC): TOWARDS DATATAINMENT
JULIAN GOODE (ECB): DON’T PANIC IN DIGITAL SPACE
JOSH ROBINSON (SPORTS REVOLUTION): SOCIALLY-SUPERCHARGING THE CONNECTED STADIUM
DAN MCLAREN (UK SPORTS NETWORK): PINTEREST – THE NEWEST FRONTIER