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Making the zero sum add up

In the upcoming SportBusiness report ‘Understanding the Sports Data Challenge,’ author Richard Gillis writes that much of the business of sports media and sponsorship is a zero-sum game in which if one party wins, the other loses. Game over, winner takes all. Over time this dictates inequalities in revenue and ultimately impacts on competitive balance and the overall quality – and probably value – of the product.

That’s not a universal truth of course. Leagues in the United States and elsewhere have recognised the value of central sales of key media and sponsorship rights and more or less equal distribution of this revenue to provide core revenues and – maverick owners not withstanding – provide a base level of stability. But, in general, it remains a dog-eat-dog business.

In his report Gillis – an award-winning author who, as a former managing partner at Cake, the Havas Sport and Entertainment agency, knows the industry from the inside – muses on whether it is time for the sports business across the board to  consider new ways of operating.

And counter-intuitive though it may appear in a sector where the product itself is built on intensity of competition and desire to be #1, he suggests that one of the ways to grow the value of the sports sector overall would be a move toward greater collaboration.

Specifically, his focus is in the area of data and the potential benefits of aggregation rather than ownership of data about sports fans. The power of Google, Facebook, Amazon et al lies in the vast reservoir of data they hold about their users. It’s what makes them the giants they are today, organisations whose commercial success and political influence go way beyond anything we have seen or experienced before.

Taken as a whole, sport has a vast number of ‘users’ worldwide but the data held about them is inevitably patchy and held in silos, and closely guarded by thousands of individual businesses. The question Gillis asks us to consider is how much more valuable the sports business would become if that data could be better standardised, integrated and aggregated. The suggestion is that it would be transformational, giving everybody a slice of a far bigger pie.

It’s a fascinating notion and one which would demand a significant cultural change among the owners of sports clubs and properties but the examples from the wider world of global commerce are there for all to see.

While widespread data sharing across sport is not something we’re going to see anytime soon, can the principle of collaboration rather than competition be applied in other areas to boost the value of sports businesses?

How about lower league football for example? Far from the bright lights and international television coverage afforded to the top tier is a whole world of often cash-strapped clubs whose sponsors inevitably tend to be local brands and businesses.

That’s fine when the team is playing at home in front of an audience which can relate to that sponsor. But when the team goes on the road, the space afforded to their local sponsor is, effectively, wasted. There is nothing for a logo or message to resonate with. Instead, why not pool sponsorship rights for visiting teams’ jerseys sop that they can be offered to a new category of sponsor – brands with a nationwide presence. The leagues won’t sell this deal on their behalf, but a collective approach could make all the difference and add significantly to the overall value of the club s’ sponsorship inventory.

Elsewhere perhaps clubs from different sports with similar fan demographics could integrate to create propositions where the overall value is significantly greater than the sum of its parts.

As Gillis and those who he interviewed for the report point out, while there are isolated examples of this type of co-operation and integration to be found around the world, it is certainly not commonplace. But as sport has to work ever harder to retain its share of consumer spend, maybe now is the time to embrace integration and co-operation in new ways.

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