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The Sport Business Summit New York by Leaders, day two round-up

 

Reports from the panels on day two of the Leaders Sport Business Summit New York 2016.

 

Twenty minutes with the MLS commissioner

Don Garber, MLS commissioner, spoke in depth on two topics: Fifa and growing the MLS fan base.

On the first, he said that US Soccer, of which he is a board member, stuck with its vote for Prince Ali bin Hussein of Jordan in the latest Fifa presidential election because it continued to believe in the vision he laid out in May last year.

The federation is looking to move on from Fifa’s recent troubles and focus on securing the 2026 World Cup, a tournament Garber believes would have “explosive commercial value for everyone involved.” He said MLS commercial arm Soccer United Marketing’s work selling sponsorship and international broadcast rights for the Copa América laid good groundwork for 2026 commercialisation.

Turning to his day-to-day role, Garber said that US wonderkid Jordan Morris’ decision to play in MLS and forgo a number of European offers was key to the future of fan engagement in the league.

“For Jordan to say MLS is his league of choice and Seattle is his club of choice, that’s huge for us,” he said. “People want to be connected to their local team and have home-grown players to look to and that is the future for us. To have local players driving the national team squad is another part of that,” he said.

 

The story of Blizzard Entertainment

On the future of esports there was measured reaction from a man who has been in video games since 1991. Michael Morhaime, founder of Blizzard Entertainment, which makes the Warcraft and Diablo series, said he could only see a handful of games breaking through and working in esports contests.

Morhaime said that esports was not a “profit centre” for Blizzard but helped to improve the game experience and provide value for its subscribers. He said the movement of esports contests to traditional broadcast platforms such as ESPN, with its Heroes of the Dorm university tournament, was important in monetising the sector, something he said was difficult to do through online platforms such as Twitch.

 

Smart money and big investments: Private equity and sports

Sports properties are difficult for private equity firms to invest in, and values of sports teams in particular are reaching “ridiculous” levels, David Verklin, operating partner of Calera Capital, said.

“We want to buy a company and then sell it for three times the investment in four to seven years,” he said. “These businesses need to have sustainable models and clear exits, these are attributes that can be difficult for sports properties to prove.”

However, he said there were interesting investments in sports video and digital audio: “Video jumping across platforms is something we all need to look out for but also radio. Subscription radio and digital audio companies are very successful models that you hear few people talking about [and] have great potential.”

Zachary Kaplan, vice president of General Atlantic, was bullish about sports properties continuing to increase in value, particularly team values and live media rights.

 

Future media: VR, independent creators and athlete-owned media

This panel, with representatives from Oculus, Twitter, NFL Players Inc and a social media personality, focused on authenticity and presenting branded content.

Robby Ayala, a social media star with over 3.5m followers on Vine, spoke of an early experience when a brand scripted a video for him out of his usual style. He lost 10,000 followers that day, was hit with a barrage of negative comments, and decided never to repeat the experience.

Nick Millman, senior manager of brand strategy at Twitter, which owns Vine, spoke of his disdain for overt branding in social media posts. “The audience can see straight through it and they will switch off,” he said. Sean Sansiveri, vice president of business and legal affairs for NFL Players Inc, said one solution was for brands to step back and allow athletes to shape the content and to give them producer and executive producer control.

 

CS:GO, DOTA2, LOL, Hearthstone, MOBAs and more: What’s the game plan for esports?

A second panel on esports looked at upcoming challenges for the sector. Andy Swanson, VP esports and events at Twitch, said it needs strong coverage of its personalities and telling of background stories to sustain engagement.

Craig Levine, chief executive of Turtle Entertainment, operator of the ESL league, said the sport needs decluttering, and better calendar management and communication, adding that the current landscape is comparable to the NBA and ABA basketball leagues before they merged in 1976.

Chad Millman, editor-in-chief of ESPN.com, said his greatest challenge in esports was that the mature audiences and best competitions are outside of the US, the primary market for ESPN. Having said that, the company is attempting to cover esports around the world and has investigated foreign language coverage to reach overseas audiences.

 

 

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