Russell Glenister, SnapRapid founder & CEO

As the countdown to a new football season continues and Ferrari dealers and agents around Europe open another bottle of Cristal to celebrate the latest $multi-million transfer, it’s worth thinking about where all the money is coming from and asking how long this business model can last in its current shape.

While a handful of major clubs have massive stadiums and sophisticated commercial and match day operations which deliver significant revenues, TV money remains vital. The latest three year Premier league deal is worth in the region of $5 billion and the way it is shared out means that even those teams which struggle on the pitch should make their bank managers very happy indeed.

The Premier League is, in most respects, in the hands of the TV companies which bankroll it and the worrying thing is that those companies are driven not by any particular commitment to the game but the need to sell broadband subscriptions.

When Rupert Murdoch launched Sky it was in the belief that live football and movies would drive subscriptions to his satellite TV services and, of course, he was right. Sky now has more than 12 million UK customers in a region of some 65 million. But the game has changed since the early days. Now Sky is in the broadband business where its major competitor is BT, the former state owned telecoms provider which hasn’t made a profit on old-style telephony services for years.

They too saw premium TV services – in particular football – as a way to sell broadband, or more pertinently to stop the haemorrhaging of broadband customers to Sky and went on an aggressive rights-buying spree which culminated in them buying a chunk of the Premier league and exclusive rights to UEFA club competitions for around £900 million over three years.

The competition between Sky and BT Sport has kept English football’s coffers loaded but the downside is that life behind the paywall runs the risk of becoming a ghetto for one of the other groups who help fund football….the sponsors.

Broadcasters pay massive prices for football rights because they need exclusive content and that exclusivity runs the risk of alienating sponsors who need their brands to be seen by as large an audience as possible.

Steve Martin, CEO of M&C Saatchi Sponsorship summed up the issue earlier this year in an interview with the Daily Telegraph about the ‘shockingly’ low ratings for BT Sport’s Champions League coverage.

“The UK market is a massive market commercially and if one of your markets for the top five – England, Spain, Germany, France, Italy – is playing out to audiences as low as that, you’re going to question the value and you’re going to go straight to Uefa,” he said.

Whether it was a consequence of this we may never know but, as it happens, BT Sport has played with the distribution of its European rights in an attempt to maximise its audience and, in doing so, has demonstrated just how complex the sports media environment is today. So for the finals of both the Europa league and Champions League 20016, viewers could watch on BT Sport – for which they paid – or for free on BT Showcase or, more interestingly, the BT Sport YouTube channel.

This suggests that it is the social networks which hold the balance of power in the sports media environment right now. They can let the broadcasters pay the big bills for rights and then step in to ensure that rights owners are able to meet their obligations to sponsors by providing access to a massive audience free of charge. Well, not exactly free of charge. Their payday comes from the audience and the data which is generated.

And that’s the thing. While broadcasters battle each other for subscriptions, it appears that power is shifting almost unnoticed to social networks. They have the audience and they have the data – in fact if you run a football club or any other sports property, chances are that social networks know a lot more about your fans, their viewing habits, likes and dislikes than you do.

Social networks are drawing fans from TV and changing the experience. Now it’s not about 30 minutes pre-show, the live event and post-game analysis. It’s about the hours and even days around the event, not just looking and listening but sharing and discussing what’s happened or is happening on the field.

Sports fans are, bit-by-bit cutting the cord as they find ways of enjoying sport in new, exciting ways and, quite often, for free and, as a result, social networks are drawing fans from TV.

And don’t get the idea that social networks are simply happy to play the role of ‘second screen’ providers indefinitely. They don’t really want to be ‘second’ anything. They want to be first screen and, ultimately, they will be. Right now they are simply tiptoeing through the impending carnage and will ultimately pick off the dying just as vultures pick over the dead.

If that all sounds rather dramatic think about how things are really changing. From next season Thursday night NFL games will be available on Twitter, while near live clips from the Premier League will be delivered on the same network via Sky.

The question facing everybody involved in running sports properties right now is understanding these shifts and still maximising revenues.

That means not only working with broadcasters who will remain the primary source of income in the near future at least, but developing social and digital strategies which maximise exposure to and impact on a vast global audience for your brand and its sponsors by helping them understand the new landscape and how it is adding value to their investment now and in the future.

While competition among broadcasters seems to be reducing visibility of sponsors, social and digital are opening up vast new areas of opportunity not simply for exposure but for engagement and dialogue created through data.

That will involve working hand-in-hand with the social networks to ensure that all parties benefit, which means not simply leaving the networks to harvest all the data and sell directly or indirectly to your fans. Remember, you generate the content while the social networks provide access to their particular audience, which is or was your TV audience to start with. Each social network is a silo and each of those silos is trying to become your fans “platform”. You need a broad strategy, which utilises each network according to their individual strengths, as there are huge potential benefits from getting content live and engaging with your fans on social media, but only for the initiated and informed.

Of course it is impossible to develop effective social and digital strategies which maximise revenues without being able to track, measure and evaluate what is happening across these media and how this added value impacts on sponsorship…. something I’ve been working on for the past year with SnapRapid.

Right now sport needs both television and social and ignoring social will lead to a destruction of overall sponsors value which is in nobody’s interests. Understanding the real value of social allows a balance to be maintained at the moment, helping combat the loss of sponsors value as rights for properties such as the Champions League and Formula 1 take the Big Bucks from Pay TV.

But it’s unlikely to stay like this for long and it’s vital that sports properties have the market intelligence and analysis and the nimbleness of thought and action they need to develop strategies to ride the waves of change as they roll in over the months and years ahead.

What started out as second screen, will more and more, be first.

FootballPremier leagueTV

Russell Glenister • 12th August 2016

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