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Streaming success | How Real Salt Lake and a Utah TV station created ground-breaking OTT deal

  • NBC affiliate KSL is live-streaming MLS team’s games without carrying them on network TV
  • Local-only OTT deal is first of its kind between pro sports team and a US regional broadcaster 
  • A number of local factors enabled this innovative partnership to be established

A Major League Soccer team and a local TV station have created – or, perhaps more accurately, stumbled upon – a ground-breaking broadcasting model.

Real Salt Lake’s digital partnership with NBC affiliate KSL marks the first time a local US broadcaster has live-streamed a sports team’s matches without also carrying them on network television.

Viewers in Real Salt Lake’s TV territory – Utah, Phoenix, Las Vegas, Boise and Reno – can watch over 90 games, as well as additional club-produced content, on ksl.com and KSL’s free, ad-supported app. Included in the ‘RSL on KSL’ coverage are games from affiliate clubs Real Monarchs, of the United Soccer League, and Utah Royals, of the National Women’s Soccer League, as well as some academy matches.

This local-only OTT initiative not only reflects the desire – from sports teams and broadcasters alike – to reach younger audiences who primarily watch live sporting events on digital devices but it also provides a blueprint for other regional networks to make similar deals.

SportBusiness International spoke to the two executives who helped broker the deal, Real Salt Lake’s Trey Fitz-Gerald and KSL’s Tanya Vea, to discuss how it was established, the local factors that made it work and its huge potential in the ever-changing world of sports streaming.

 

Classifieds conversation leads to innovative idea

It was last October when Real Salt Lake approached KSL about a marketing deal to sell individual match tickets on the network’s hugely-influential classified advertising website (which was eventually secured).

At the time, the MLS club were in the process of renewing their terrestrial TV contract with KMYU, which is owned by the Sinclair Broadcasting Group. A linear television deal with KSL-TV was, notably, not an option as it did not have enough room in its already-packed schedule as an NBC affiliate to show RSL games.

KMYU, however, did not have the capacity to offer any digital packages to RSL, leaving them unsure how best to stream their games, something they were highly-motivated to do in order to grow their fanbase and gain extra revenue.

RSL’s official website seemed the natural resting place as the club, considering itself in growth mode, did not want to stream its games on a subscription-based platform, such as YouTube TV or ESPN Plus.

However, during the course of the club’s marketing discussions with KSL, the network’s executives mentioned the company had a new app that was looking for more content and could provide a secondary broadcasting option that would be free to viewers.

“It was serendipitous in many ways,” says Fitz-Gerald, RSL’s vice-president of broadcasting and communications, of the inaugural local OTT sports-rights deal in the United States. “KMYU has been a very good partner in terms of promoting RSL and all of our soccer products but it didn’t really have a digital plan,” he adds. “We were in the process of talking to KSL about a marketing relationship because their classified section on ksl.com is so robust that Craigslist basically does not exist in Utah.

“In the course of those conversations KSL said, ‘We have this new app and we are carrying the stuff that is not protected by the NBC network nationally, why don’t we look at putting some highlights or something on there?’ We replied, ‘Why don’t we look at putting the games on there?’

“For digital streaming, we were already thinking of streaming academy games on our website, which we had done periodically before. Then it was like, ‘let’s do all the games – all the Monarchs, Royals and RSL games’.”

In order for the club to live-stream their games, the digital rights had to be bought from MLS, USL and the NWSL respectively. But for RSL, these purchases were worth the investment to ensure that fans could be reached wherever they were.

“We have the over-the-air TV thing where we were in 100% of the homes,” Fitz-Gerald adds, “but because people are on the go, how do you make sure that you are being 100% in people’s hands?

“That is where the KSL app came in so handy. We knew the marketing machine behind KSL would promote it, we knew they had the best-in-class technology for it. We are not giving fans any excuse to miss a game.”

How the linear TV partner reacted

In order to secure the deal with KSL – which is part of Bonneville International, the for-profit broadcasting arm of the Mormon Church – RSL first had to get the blessing of terrestrial partner KMYU. Negotiations were understandably sensitive.

“We were very ‘through the front door’ with KMYU,” Fitz-Gerald adds. “We said, ‘We need to have these games available digitally and it’s probably going to be with your competitor’. They weren’t happy about it but I think they understood.

“Certainly [KMYU] was a little nervous because it did initially create some confusion in the pre-season when we said our games are being streamed on the KSL app and some of the KMYU advertisers were saying, ‘Hey, I thought you were carrying the games’. There is certainly an education process but we’ve been able to work through that for the benefit of everybody.”

Vea, KSL’s vice president and general manager, was surprised about how the deal – which runs for three years – happened with relatively little drama.

“I don’t think either one of us really expected it to work because their broadcast partner is our main competitor so there was some work to be done as to whether that deal could still be in place along with this one and then with us how it would work,” Vea says. “It’s a real credit to all players involved for being able to see the bigger picture rather than being stuck in each individual play. RSL was the point on this: they had to have some sensitive negotiations.

“We’ve all got an agreement in how it works. When we announced it, there was some confusion as to whether the broadcast was moving to KSL but since that initial day it seems that users got it really fast.

“It came about a little accidentally… [but] ratings are really strong (thus far ‘RSL on KSL’ games have drawn 30,000-50,000 views for each game). There’s definitely a demand for the content.” KMYU did not respond to a request for comment on the deal.

In terms of revenue, RSL are gaining the vast majority of the advertising income as they are paying the production costs for the games and additional content – pre- and post-match shows and two midweek programmes.

“We own all the inventory and pay all the production so there isn’t much opportunity for the partner to make money unless they are interested in producing some of the ancillary content,” Fitz-Gerald adds.

Despite the limited revenue opportunities with its RSL partnership, at least for now, KSL is using the OTT app more broadly to experiment with new ways of earning advertising income and to open its content up to a broader (and younger) audience. “We’re going where the viewers are going,” Vea said recently. “We can fight that trend and lose, or transition with them.”

Why RSL can have their cake and eat it

There are particular regional circumstances that led to Utah being the home of the first local-only OTT sports broadcasting deal.

Firstly, the lack of sporting competition. RSL, unlike most MLS teams, are significant players in their local market. The main – if not only – competition for sports fans at the professional level are the Utah Jazz. There are no NFL, MLB or NHL teams in the region. “We pretty much own the summer,” says Fitz-Gerald.

Secondly, there is no local TV sports network desperate to fill its schedule with hours and hours of content or, more specifically, a TV network that is able to show RSL games both on network and on digital platforms.

Thus, the unusually high demand for RSL’s content and the dearth of broadcasting options enabled the MLS team to leverage a linear deal with one network and a digital contract with another. Or, as Fitz-Gerald put it, “have our cake and eat it too”.

He says: “There are a lot of factors in our region that contributed to this deal being set up this way. Real Salt Lake, the Real Monarchs and now the Utah Royals are pretty much big fish in a small pond – we don’t have a tonne of competition here.”

Despite all this, the deal represents an innovative model for other local broadcasters and sports teams to follow. Indeed, some of RSL’s MLS rivals have already bypassed local network TV deals, with LA FC and Chicago Fire striking OTT deals with YouTube TV and ESPN Plus respectively.

“I think it is something that more teams will do. I think people will figure out a way a similar version of this deal,” Fitz-Gerald adds. “It happened at a time when we don’t know what the future TV sports-rights models are going to be but we know the old ones are kind of falling apart. And in many ways that could be good for MLS and other soccer leagues.”

Vea concurs. “There is definite interest from other broadcasters wanting to know more about this. I don’t see why people wouldn’t be going down this route.”

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