Today’s sports environment is unprecedented, and the wider business environment has experienced little like it before. Few of us know what the next few months hold but one certainty is, sadly, that not all agencies operating in the sector will make it out the other side. A significant reason for this is that businesses based solely on discretionary income from third parties are empires built on foundations of sand.
For agencies operating in the world of sports content creation, the ones set to survive and thrive offer a blended service, combining a managed portfolio of fee-income, licensing fees for IP-based data and tech, and relevant owned channels with a buoyant, well-sized audience.
Only disingenuous business founders ever refuse to ascribe their company’s success to a degree of luck but, fundamentally, there is no substitute for industry knowledge and clarity of purpose – a universal truth regardless of the industry in which you operate.
Eight years ago our vision for Engage Digital Partners was clear; sports rights-holders were missing a trick around non-live content and story-telling, traditional broadcasters weren’t geared to leveraging this, so there was a clear path to feed fans’ conversations and 24/7 consumption by using non-live as the conduit. Where luck came into play for us was the exponential rise and influence of social media so soon after our launch; an already robust proposition found itself greatly enhanced by fans’ inclination to shared their experience around their chosen discipline, game, player or team.
Many agencies have done well with a similar concept over the past decade but the ones who will continue are the ones which have invested in their own tools; data analytics and tech-managed services are key to growing and monetizing audiences in our world, so that is where we have directed funding. This, in turn, gives all our stakeholders extra security – investors and staff know the agency is robust since it has a clear yet multifaceted proposition, whilst clients enjoy service and advice that is infinitely more powerful and cost-efficient. Additionally, investment in data and technical services that are agency-owned leads to new opportunities and higher returns via chargeable license fees that provides revenue with more predictability.
Clearly the approach above provides a valuable asset to investors and clients alike, an equally exciting business model from this point of view is one that enables sharing in transactional income – a factor emerging side-by-side with OTT and micropayments. How often are agencies asked to create proposals where they share the risk and reward with clients? Having owned IP in the transactional market puts both parties’ money where their mouths are.
What makes agencies with a multi-faceted proposition increasingly attractive to investors – and many forward-thinking clients – is their ability to replicate their services between sectors, whether that’s exporting sports’ experience to other sectors or for entering the sports’ market. Not only do such agencies bring hard-won, transferable experience to bear, from an owner’s perspective, they can pitch in new markets with a lower entry cost, have existing business efficiencies and the potential to create exciting new income streams.
Any entrepreneur understands the hard work, dedication and courage it takes to set up a business of any type – including its rivals – and takes no joy in seeing good companies go under; failure to keep trading in this unprecedented situation is no shame, it’s rotten circumstantial luck. That said, if ever there was a time to take a level-headed, honest look at your agency and spot the gaps in your IP, that time is now.