The first Sports Decision Makers Summit – from SportBusiness and Sportel – was held at the W South Beach in Miami over 6-7 May. After the event, our moderators shared the most interesting learnings they took home.
European Super League would also hurt MLS
“[MLS commissioner] Don Garber has done the best job [among the US major leagues] of building a brand” – the words of billionaire entrepreneur and AS Roma co-owner James Pallotta, who opened the conference with a Monday keynote. But there was a kicker: “While I think he’s done a great job, I think I’ll be dead before it becomes anything I think is significant.” Why? Pallotta believes that the resurgent possibility of a European super league is a particular threat for MLS – many of whose consumers are fans of both a domestic and a European club – because it would look to play matches on weekends, chopping off the engagement growth of the US league as surely as it would for the remainder of domestic leagues in Europe.
Follower count is a limited metric…
It’s not hard to do brand deals for a major star who has millions of followers. But, as Jennifer van Dijk, Wasserman’s executive vice-president of marketing, told the conference, “it’s a different proposition to look at athletes who have 10,000 or 100,000 and how you market that”. As a result, she said, Wasserman has ‘flipped the model’: the absolute size of an athletes social media following is no longer the be-all and end-all – the company now spends significantly more time and resources analysing “who’s engaging and what you can tell about them, than in how many you have of them” when trying to secure sponsorship partnerships for their athletes.
…but some followings really do move the needle
When Cristiano Ronaldo left Real Madrid last summer, the club’s Instagram lost a million followers; the club he joined, Juventus, added 4.7 million. “What would it cost,” Terrence Burns, executive vice-president of global sports at Engine Shop, asked the crowd on Monday morning, “to add almost five million people to your Instagram? I don’t know – I don’t know how you do that. That’s an example of where athletes are extraordinary.”
Brands need clever strategies for 2026-28
“The world is coming [to the US] in 2026 in the context of football; and it’s coming in 2028 in the context of the Olympic movement,” said Terrence Burns, and any consumer-facing brand – “and a lot of B2B brands, frankly” – should already have a strategy for these events. But what can brands do when they lack the $400m to partner with Fifa or the IOC? One option is sporting bodies like the US Athletics Federation but the other, Burns was at pains to point out, is athletes: “everybody with a phone is a media outlet, and athletes are using theirs.”
Profiting from sports betting requires patience
Gambling is still one of the hottest topics in the American sports business sphere, but a little patience is required, according to William Hill US digital president Ken Fuchs. The progress of state-by-state legalisation is a “slow roll” and the general public is still warming up to the idea. “Think about fantasy sports in like 1996…we’re at this baseline with a core, avid person who has bet before, but the core sports population has never done that.” Montana became the ninth state to legalise sports betting just before the conference began; Tennessee, Iowa and Indiana are expected to be next in line.
…and state law will hugely influence the eventual landscape
“People think every sports betting company is making billions,” said Adam Davis, chief revenue officer at Harris Blitzer Sports & Entertainment, “but the margins are actually pretty small”. The implication is that the specific rules each state sets will have a huge influence on the shape of the market. Davis cited New Jersey – no entry fee for operators and a 14-per-cent tax on each bet – and Pennsylvania – a $10m entry fee and a 36-per-cent tax – to note: “think how much more valuable I am as a New Jersey resident than I would be as a Pennsylvania resident.”
Stadia should cut back on retail space
Stadium operators should drastically cut space for offices and retail stores at their venues in order to maximise the commercial footprint, according to San Francisco 49ers president Al Guido. “You will see retail shops becoming smaller…you’ll see more in-demand retail,” Guido told the gameday experience panel. “There’s always a need to have retail, but I think how big those spaces become is interesting…I don’t see a lot of reason for us to continue to have brick-and-mortar retail outlets.”
Esports’ growth should worry traditional rights-holders…
About a third of esports fans don’t watch any traditional sports. The average NFL viewer is 50 years old, the average baseball viewer is 57. Bobby Sharma, founding partner of the Electronic Sports Group, says this should worry traditional sport. “If I’m invested in traditional sports and I see a massive, growing global audience and I see my asset, and the league in which it plays getting older and fast…I have some concern”. But the backbone of esports’ growth will be rather traditional, even if the platforms aren’t: media rights. That said, the industry isn’t there yet – as Lance Mudd, founding member of the US eSports Federation pointed out, the business model right now is more like entertainment, given the short lifecycle of the top players, their teams and even the games they play.
…and even college sports bodies?
The debate over college athletes, and whether they should be paid directly for their labour, is the most furious in US sport right now. So far, collegiate conferences are holding the line on amateurism – but could esports also be a wedge issue here? Tyler Schrodt, chief executive and founder of the Electronic Gaming Federation, describes his idea for the organisation as “something that looks very similar to the National Collegiate Athletic Association [NCAA]” but “we don’t believe in things like amateurism; we want our players to get paid”. That means, for example, identifying when a university team is creating content on Twitch and “making sure they are compensated”.
The Olympic movement needs to reconnect to youth
Another property with an aging fanbase is, perhaps surprisingly, the Olympic Games. As bid expert Terrence Burns pointed out, the Games’ most avid fans “look like me – they’re white and over 50”. “I don’t care what product you sell, if your core consumer is white and over 50 you’ve got a problem. This race to be relevant to 18-to-34-year-olds isn’t just a thing for brands like Coca-Cola or for the NBA whoever, it’s for the IOC.”
Barcelona’s plan for a NWSL team remains in limbo…
Xavier O’Callaghan, managing director of FC Barcelona’s US office, told the summit that the club’s long-term sponsorship deal with Nike – which covers all versions including the women’s team – remains the hold-up. The NWSL currently has a central commercial partnership with Nike but could move to a rival in the future. Should that happen, Barcelona would have to leave the NWSL – a situation the club wants to avoid. “It’s not so easy to do it, to make it real. We are asking for [a sponsorship] exemption – but it is not in our hands,” O’Callaghan said. “We believe we can boost the competition but if there is no way to do it then we will not take part in it.”
…as does the long-planned LaLiga USA game
“It’s one of the best tools to promote the game and the league,” added O’Callaghan. “We have to see that game as a tool to present what soccer could be. This is what we have to explain to the organisations who are not allowing us to play abroad.” The contretemps between LaLiga and Spain’s football federation, the RFEF, was a “big handicap” to that, and overcoming this – and opposition elsewhere – will require “pedagogy” on the part of the clubs.
Not everyone is a fan of incentivised partnerships
Data was a theme of the summit, and on the marketing panel the question was how it could bring clarify to the always cloudy ROI of sponsorship deals. And after AB InBev’s Eelco van der Noll had spoken in favour of clear incentive-linked partnerships, Fenway Sports Management president Mark Lev was asked if he thought the same way. Not so much: “We feel that with iconic brands like the Red Sox or Liverpool [both owned by Fenway Sports Group] there’s real value delivered by having an association.”
Media platforms need to ‘come together’ to fight piracy
To deal with the twin threats of changing consumer behaviour and piracy, sports media needs to take more combined action and create more unique content. Antonio Briceño, deputy managing director, US & Canada, beIN Sports, told the conference that piracy required a more coordinated response: “It took the music industry 10 years. I think we have to be much faster than that, because we don’t have 10 years.” He found agreement from Eli Velazquez, executive vice-president, sports content, NBCU Telemundo Enterprises. Velazquez said: “I like Antonio’s idea – we should come together and attack these challenges – but also as content providers we should be working harder to create content that makes people not [want] to do those things? How much special access content can you create, around this IP, that is must-see?”
Costly stadia unlikely to be the right home for esports
Lance Mudd of the US eSports Federation argued that investments in physical esports stadia were unreasonably high. “When I see these $50m esports stadia coming online,” he said, “it’s kind of difficult to see how they are going to make the revenue to have a physical stadium and drive enough events to succeed. I do know [casual esports friends] want to go to an event once in a year; I don’t know if they’ll want to do that every week.” The opportunity, he argued, was in temporary stadia, like in Formula One or the 2018 IeSF World Championship in Kaohsiung. “I don’t know if the NFL model, which it seems like Blizzard is doing, is going to be the sustainable model for esports.”
Tech companies will eventually ramp up sports investment
George Pyne – founder & chief executive of major sports investment group Bruin Sports Capital – said he was convinced that tech companies will scale up their investment in sport. In his keynote, Pyne predicted that the tentative movements into sport taken by Amazon, Facebook et al would give way to serious engagement. “Eventually you are going to see them come in because sport is so valuable it’s hard not to invest,” he said. “Eventually these tech companies are going to be the next Rupert Murdoch, and they are going to want sport.” Drawing on the experience of media companies in the US, Pyne said: “What was the Fox network before it acquired the NFL? Not very relevant. Look at CBS after they lost the NFL. They were less relevant.”
One thing about European soccer still terrifies investors
“They look at the relegation risk and it just can’t be stomached.” Chuck Baker, O’Melveny Sports partner and co-chair, said that promotion and relegation was still the big turn-off for US investors when it came to spending on European football clubs. “Relegation is really a very scary proposition for US investors who have a lot of trouble getting comfortable with that concept.”
Budweiser ‘super-excited’ about teetotal Qatar
Qatar has strong restrictions on the consumption of alcohol, but this hasn’t stopped Eelco van der Noll – the head of partnerships & experiential marketing for AB InBev – getting “super excited” about the 2020 Fifa World Cup in the country. Budweiser, an AB InBev brand, has been Fifa’s official beer for over a quarter century. Speaking at the Sports Decision Makers Summit in Miami, van der Noll said the country’s laws weren’t a problem, because the actual location of the World Cup is not the chief focus of Budweiser activations – “wherever the World Cup is being played, it helps our activations around the world.”
Pac-12 seeks investment to keep up with college rivals
Pac-12 commissioner Larry Scott opened up about his collegiate athletics conference’s call for investment. In partnership with the Raine Group, the Pac-12 is seeking a $750m investment, of which $50m will go toward a new entity that will manage the conference’s media rights and the Pac-12 Network. The Pac-12’s current broadcast rights deal with Fox and ESPN – worth $3bn over 12 years – isn’t up until 2024, but the conference believes the addition of a strategic partner now will help it improve the product for greater impact then. “We know we are sitting on a lot of growth in value [of our TV rights],” Scott said. “Our schools are interested in monetising the value sooner and invest in programming and new businesses and acquire new rights [for the Pac-12 Networks] so our rights are more valuable in 2024.”
F1 wants new races in the US & China
Formula One under Liberty continues to look beyond its European heartlands. F1’s managing director of commercial operations Sean Bratches closed the conference by saying the series was “acutely interested” in adding new grands prix in each of the US and China, shifting the balance away from Europe, which hosts 10. And he was optimistic that one would be in Miami – “from a destination standpoint, it probably aligns with the Formula One brand as well or better than any city in the world in which we race” – despite past setbacks in that attempt. “I’m an optimist but I’m also a realist: these are complicated things but we’re working on it.”
The next Sports Decision Makers Summit will take place in London from 9-10 July in London. The detailed agenda and full event information are now available at www.sportsdecisionmakers.com.