- Sports media rights values likely to take a hit due to economic recession
- Changing consumer habits will also have impact
- Green says that sport without fans is “a different product”
The Covid-19 pandemic and ensuing recession is likely to have a “lasting impact” on the value of sports media rights, says Simon Green, head of BT Sport, adding that for the broadcasting world, “the ’new normal’ is not going to look very much like the old normal.”
Speaking to SportBusiness, Green cautions that it is not as simple as predicting a drop in media rights values, though he notes the recession and reduced spending power of consumers will inevitably exert downward pressure.
“It’s very difficult to predict exactly what’s going to happen with fees for rights and whether or not the values will drop,” he says. “I’ve no doubt Covid-19 will accelerate some of the trends we were already seeing before the pandemic, and it introduces some new factors of its own.”
Those pre-pandemic trends include static or falling fees for major properties in the UK: BT Sport paid no increase in its most recent Uefa Champions League acquisition, while BT Sport and Sky Sports cut their collective Premier League payment from £5.14bn ($6.74bn) for 2016–19 to £4.46bn for the current cycle.
In its first financial statement to take the impact of the pandemic into account, the wider BT group showed a seven-per-cent year-on-year drop in revenue for its first quarter of 2020-21, while Sky witnessed an even steeper decline of 15 per cent. Both companies cited the lack of sport and subsequent refunds offered to customers as contributing factors to that decline, and both are likely to seek a reduction in the fees they are paying across the board.
Consumer habits and expectations
Changing consumer habits will continue to affect rights values, Green believes, though their impact is harder to gauge. As the consumption of live sport in the home – as opposed to in stadiums or in pubs or other communal environments – has grown, so too has the way viewers access content changed. With families staying at home and fighting over who gets to watch what on the main television, BT Sport has seen “a huge adoption of people using big-screen apps through streaming boxes and consoles, as well as small-screen apps on tablets and phones,” he says. BT Sport serendipitously launched its app for Apple TV, PlayStation 4 and Xbox One in February, just a month before the UK’s lockdown came into effect.
“Customers now expect to be able to access the content they’re paying for, wherever they want to access it; they also expect enhanced ‘second screen’ experiences. That opens up a lot of options to us in terms of getting under the bonnet of things and allows for innovation and creative ideas for organisations to get to their customers in a more efficient and direct way.”
That, Green adds, will lead to “the value of rights and the value of pay-TV changing in certain ways. It’s almost impossible to say exactly how, but I’m sure that it will.”
Similarly, the widespread availability of almost every fixture from the coronavirus-affected seasons of major sporting competitions is something that could firm into an expectation, with consumers demanding more content for less following the lockdown.
As reported by SportBusiness last week, BT Sport is working alongside Premiership Rugby to ensure that season ticket holders can still watch all their team’s home games live. All 57 of the remaining matches in this season’s Premiership will be available to BT Sport subscribers, and the broadcaster is also collaborating with clubs to offer the games to season ticket holders who don’t already pay for BT Sport. A £25-a-month Rugby Pass has been announced to offer contract-free access to the games, and similar pay-per-view-style solutions have been proposed for other sports that rely heavily on matchday not just for the income from gate receipts, but for engaging with their supporters.
The Premier League is a different case, a globally popular competition where match day revenues represent on average less than 10 per cent of clubs’ income. When it returned for the conclusion of the 2019-20 season following its lengthy “Project Restart” deliberations, the league struck a deal with its four domestic broadcast partners – BT Sport alongside Sky Sports, Amazon Prime and the BBC – to show every fixture live, though that arrangement has not been extended into 2020-21. Rumours persist that a similar deal to that in Premiership Rugby is in the works to allow season ticket holders access to games and provide them with an incentive to renew, but Green cautions against taking a “one-size fits all” approach.
“It’s difficult to forecast exactly what’s going to happen in terms of the impact of crowds coming back, or not coming back, as the case may be,” he says. “The matches post-Project Restart were under a very particular set of circumstances, and it was right for us all to adopt what we did. Likewise with the Premiership Rugby arrangement, but it doesn’t necessarily mean that because we’ve got this model in rugby, let’s do the same in football. Each sport has its own particular demands and approaches.”
Sport without fans “a different product”
Green also suggests that in the medium-term he doesn’t see a huge appetite – either from rights-holders or on the broadcaster side – for major changes in the ways media deals have been structured over the seven years since BT Sport launched, even if fans become expectant of being able to watch a far higher proportion of fixtures live.
“The major relationships that we have – particularly with the big domestic football rights deals, the big rugby deals, the likes of MotoGP – I think they will remain similar, because it gives customers a way to engage with high-end content, and I don’t think that desire from the consumer is going to change,” he says.
“What we’d ideally like to get back to is the level of exclusivity and the structure of what is in the agreement between us and the rights-holder. We entered into these kind of deals with a level of exclusivity over what we have access to and what remains with the rights-holder, because it’s the arrangement that, in the current environment until earlier this year, still works best for everyone.
“If the extraordinary set of circumstances we find ourselves in now continues, with home fans unable to see the game, we understand it’s best if we change those arrangements, to suit the fans. But going forward, we would always want to retain the structure of the original deal.”
The lack of crowds isn’t just of concern to clubs and rights-holders. Green is clear on the importance of fans to the broadcast experience, describing the events BT Sport has broadcast since the easing of lockdown as “a different product.”
“We’re not getting what we originally had, the product that we paid for,” says Green. “If we’ve learned two things from this pandemic so far, it’s that our customers still want to watch live sports, and that live sports are not the same without a crowd. Sport is still incredible, it still has value, and people still want to watch, but we are as desperate as anyone else to return to a situation where fans and atmospheres are back in stadiums.”