For SportBusiness International, our 100th issue provides an opportunity to reflect on the development of the umbilically linked sports marketing and broadcast sectors in the years since issue 1 tumbled off the presses in late June 1996.
Equally, it provides an opportunity to reflect on SportBusiness International itself. Not in a self-indulgent, navel gazing kind of way but in a positive, eyes-on-the-future, how can we do this better manner.
As a publishing venture, SportBusiness International was always going to be something of a challenge. Whereas B2B publications traditionally provide a link between a clearly defined single industry sector and the suppliers to that sector in one definable territory, sport doesn’t work like that.
Whichever way you look at it, SportBusiness International’s audience is incredibly diverse, across professional disciplines and territories. From the elected officials who run the world’s major sports to the lawyers responsible for multi-billion dollar deals which are the lifeblood of modern sport, SportBusiness International sets out to serve them all by delivering the insight, analysis and comment which will assist in their understanding of the issues and opportunities they face from day-to-day.
And how those issues change.
Since 1996 the most significant changes in the business of sport have, by and large, been driven by technology and the potential of technology. Digital satellite and cable broadcasting has forever changed the way that the populations of the world’s most economically significant countries are entertained.
In 1996, the hundred channel universe was common only in the United States. Today it’s standard issue. In the UK, Sky is pushing towards 10 million subscriber homes and sport – in particular soccer – has played a key role in marketing to new subscribers.
The received wisdom that sport drives pay-TV subscription became so widely appreciated that it was repeated mantra-like at every possible opportunity. Unfortunately, as with any mantra, it’s worth pausing from time to time to consider what’s being chanted.
When ITV launched it digital pay service in the UK, it repeated the mantra and bought into sport in the belief that it would deliver. But they soon discovered that their article of faith was incomplete. It’s not any old sport which delivers audiences and subscribers…it’s the sport that sufficient numbers of people want to watch.
And while that sounds just about as basics as it can be, the folks at ITV clearly didn’t believe it to be true. So they went ahead and signed a massive deal with the Football League which represents England’s second-rate soccer clubs. That’s not said with any element of disrespect – it’s a fact.
While Sky continued to push ahead with its coverage of the FA Premier League and its rich diet of top class action from some of the most famous clubs in the world, ITV Digital screened hours of live games featuring second- and third-string clubs which not enough people cared about to fork out for.
The result was the ultimate collapse of ITV Digital and the near collapse of a number of soccer clubs which had cast prudence aside and budgeted on the continuation of the inflated sums that ITV had pledged.While the US TV rights market is something of a law unto itself, a benchmark was set when the NFL divvied up the various packages which it had to offer for a staggering $17.3billion. This sent out a clear signal to negotiators elsewhere in the world that sport really was perhaps the sole remaining TV genre capable of creating mass out of the increasingly fragmented TV audience.
They were right of course. Sport on television does deliver in every respect but the audiences are not fools. They share the excitement and the passion all right but they share it most for the massive events, where television sport makes them feel part of an event of tremendous significance and binds them – if only for hours or minutes – to their neighbours and communities. That’s why – outside of US sport - the FIFA World Cup and Olympic Games continue to deliver the most significant sports audiences in the years in which they occur.
But while television, in its various guises, clearly dominated the sports business agenda, the emergence of the online universe may come to be the most significant development.
In sport, as in any business sector, you find diverse groups of people. While this may be something of a simplification, they break down into a number of major sets – salesmen and visionaries.
One of the most exciting periods over the past nine years came when the visionaries briefly held centre stage. These were the internet evangelists whose notions of the way that the online universe would shape the future of sports were embraced, derided and then – hundreds of millions of dollars later – embraced again.
Internet evangelists spoke of immersion, of ultimate consumer choice, of wondrous new one-2-one marketing possibilities. They spoke of the creation of new communities and the commercial empowerment of sports which, because they were essentially remote and solitary pursuits, had previously been little more than hobbies for the committed.
The world’s investment community was hypnotised and the funds flowed to fuel the development of a huge range of online offerings, which ranged from the brilliant to the banal.
The problem was one of developing revenues from subscription and/ or advertising. It proved more difficult than expected to migrate the small but growing online community towards acceptance that content should be anything other than free and, one by one, many of the most dynamic and creative operations in the sector bit the dust.
There was, it has to be said, a fair amount of gloating at this stage, particularly from the salesmen who had, of course, simply moved on to new employment. We told you so, became the phrase du jour.
But from the perspective of 2005, with more of the world linked by broadband and a more savvy populace having redefined its attitudes to paying for online content, the visionaries look like being proved right.
Broadband is likely to have a significant impact on the future of the sports business and a good deal of that impact will be along the lines sketched out by the pioneers in the late 90s. Just ask Bill Sinrich, of IMG/TWI, who looks to the future in his article on page 39.
The changes we have witnessed in sports business may be largely driven by broadcasting and technology but there are other factors.
Sport still accounts for some 70 per cent of sponsorship spend around the world and, at a time when we are constantly being told that standard advertising is becoming less effective and more expensive, the sums being spent on sponsorship continue to increase year-on-year.
The issue the sports sector faces appears to be one of maintaining its share of sponsorship budget in the face of growing awareness of other opportunities. Last year London-based consultancy Redmandarin carried out an extensive piece of research among European sponsorship executives at the brand end of the equation.
The survey proved to be a mine of fascinating data which suggested, among other things, that 12 per cent of brands went into sponsorship deals with no set objectives. Bizarre isn’t it?
But equally interesting was the finding that, of those companies which planned to increase sponsorship spend, the majority would allocate additional budget to entertainment and corporate social responsibility projects.
For decades, sport has had it more or less its own way in the sponsorship sector. Now, partly because of the increasing professionalism being demonstrated by those involved in sponsorship within the major global marketing consultancies, sponsorship is no longer a one-trick pony. Even the lexicon of sponsorship is changing, with many professionals preferring to talk about association marketing. They will take a holistic approach to a brand’s communications requirements and sponsorship will only be considered where it adds real value and helps connect a range of other activities. And even when sponsorship is part of the programme, sports is no longer the only game in town. This is a significant, but inevitable, result of the increasing professionalisation of the sector which should, on the whole, be welcomed as a challenge rather than shunned as a threat.
The international sports business remains a dynamic and fascinating sector and, as we plan for the next 100 issues, SportBusiness International aims to reflect the concerns and requirements of its many constituents.
We want to provide the best and most relevant service to our readers and to help us in that task we will be running a reader survey which will appear on our website at www.sportbusiness.com in the weeks ahead. We do hope that you will find a few minutes to answer the questions and give us the benefit of your feedback on the services you would like SportBusiness to deliver.
So just who are these people?
Our cover features 96 well-known sports sector personalities who have hit the headlines in SportBusiness International since issue 1. But how many can you name?
There’s a bottle of halfway decent Champagne for the reader who can name the most. Just list the names, starting at the top-left and working line-by-line, and mail them to me at kevinr@sportbusiness.com. If there’s a tie, the winner will be decided by a draw.
We’ll publish the full list – and the name of the winner – at www.sportbusiness.com on Friday, March 25. In the time-honoured tradition, the judge’s decision is final and there’s no cash alternative to the prize offered.
Good luck!
