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From old-school to digital dealing | How Content Arena is supporting sports media’s choking rights market

Photo by Boris Streubel/Bundesliga/Bundesliga Collection via Getty Images).

  • In spite of an increase in demand and a greater volume of content being available, “the market for trading rights is old-fashioned”
  • Erik Lorenz believes Sportel hiatus will encourage both buyers and seller to consider different ways of doing deals
  • Content Arena aims to help the industry to adapt to the ‘New Normal’, bringing it “to the next level”

While much of the sports media world understandably obsesses over whether rights fees have peaked or are set for another growth spurt, Content Arena chief executive Erik Lorenz remains sanguine.

Erik Lorenz

His focus is not on the amounts being spent but on the way the market itself operates and how technology can be applied to make the entire sector more efficient, effective and, ultimately, more profitable. His vision is to be the go-to technology partner to the industry by providing solutions to all kinds and sizes of market players across leagues & federations, agencies and media companies.

“Sports media rights is a $50bn market and whatever happens it will remain huge,” said Lorenz.

“What interests me more is the way the market operates and frankly it just hasn’t changed over the years. We want to support the industry in improving processes by embracing technology.”

Lorenz and his colleagues have built Content Arena, the digital sports media marketplace and rights management system, on the understanding that while the sports media rights market has become broader, deeper and more complex over the years, the way that rights are managed and marketed, bought and sold, has not kept pace with the changes in technology which are evident in the production and distribution of content.

It is somewhat ironic that, under normal conditions, today (October 28) would have been the final day of Sportel 2020, the annual gathering of the sports media clan in Monaco. It’s the place where, year after year, buyers and sellers come face to face to do many of the deals which determine where and how the world consumes sport in the months ahead.

It’s a world and an environment which Lorenz, formerly of Sportradar and Bundesliga, knows well. And while he is certainly not celebrating the absence of one of the sector’s landmark events, he believes that the Sportel hiatus will encourage both buyers and seller to consider different ways of doing deals.

“The fact is that the business has changed in so many ways beyond the escalation of rights fees for the top properties,” explained Lorenz.

“For years now we have been seeing an increase in the available rights. That’s due to the increased demand from new outlets and lower costs of production, both the result of technology.

“The distribution market has become more fragmented – there are far more players than there were five years ago, including OTT operators and more regional operators. At the same time the leagues and federations have become aware of the value of content beyond their live offerings and are getting better at producing it.

“But despite this increase in demand and the greater volume of content available, the market for trading rights is old-fashioned. It is stuck in an analogue world and so long as it carries on in the current way it will remain more difficult than necessary for some of these new players to explore the mass of content available and navigate their way to the content they want and need,” he said.

While acknowledging that rights trading will fundamentally remain a ‘people business’ at an important level, the suggestion is that the current modus operandi is effectively choking the market and preventing rights-holders from effectively optimising the value of their portfolios.

“From the buyers’ side its not always easy to know who holds what rights and who to call,” he explained.

“We recently had new channels from Bangladesh and Nigeria coming to the Content Arena platform. These were people who were new to the market and didn’t have the connections they otherwise needed to find the content they wanted.

“I believe that overall demand for content will increase driven by technology and the demands of channels. Even the bigger players, who have 80-to-90 per cent of content tied up in long-term deals, are looking for short-term opportunities and access to content for their platforms as a result of the move from linear to digital. They have to have content on all of their platforms to keep their customers entertained. As a result, the market is about to get even more complex for both buyers and sellers,” he said.

According to Lorenz, the sports media sector remains largely anchored in an age of spreadsheets and pdf catalogues, hardly the ideal way to engage and transact with a fragmented and growing market in the digital age.

“Even if you have a great sales team you can’t get all of your content in front of all the buyers. There has been no digital way of accessing rights or seeing what is available. In the same way it is difficult for rights-holders to access information about their rights. Everything is on spreadsheets,” he said.

The scale of the industry may be one of the reasons for the lack of sophistication in this key area. Lorenz suggests that because the companies involved are not tech specialists, they have little interest in developing in-house solutions while the niche nature of sports media-rights trading has prevented software developers from outside the sector from moving in.

It was a combination of these factors which led Lorenz to consider developing a workable technical solution which would, in his words, make the business faster, more efficient, flexible and profitable.

“The aim was not just to develop a digital marketplace but to optimise the commercial and legal processes and provide a tool for rights-holders to effectively manage those rights. These things are all related to each other,” he said.

“The idea for Content Arena developed as a result of the different perspectives I gained when working in other roles. Essentially, I realised how inefficient the market is,” Lorenz said.

He got Sascha Kojic together with Klemens Kögl and Bernie Riedlsperger of Hogmore Media as co-founders & co-investors on board to set up a development team to work on the software which would correct those inefficiencies by powering the Content Arena Marketplace and, subsequently, its Rights Manager.

“Sascha has great industry insider knowledge from the smallest to biggest deals while Hogmore Media embrace technology internally and have a good understanding of what is needed. They have been very valuable strategic advisors to the business especially in the early days,” Lorenz explained.

Since then DAZN’s John Gleasure, another industry veteran, has come on board in his private capacity as an investor while further funding has been injected from private equity.

“Their involvement was in a way a validation of what we set out to do and their excitement has been backed up by the marketplace which clearly sees a need for it.”

That excitement has been translated into user. Major rights-holders including Bundesliga International, Stats Perform, Discovery, EHF, Saran Media, as well as many other sports bodies and agencies make content available on Content Arena, while there are currently more than 1,000 vetted users from 75 countries.

“A marketplace takes time to develop and I am happy that every single request we get is a proof of concept for us.”

Lorenz is particularly excited about Content Arena’s ability to generate new business and points to the Brazilian football property Copa do Nordeste as an example of what can be achieved. The knockout competition featuring Brazilian Serie A clubs such as Bahia, Ceará, Fortaleza and Sport Recife had no international distribution before it was made available on Content Arena and Lorenz is confident that other properties will be able to find new audiences in the same way.

For him it is proof that, despite the impact of Covid-19, the rights market can flourish.

“Business practices are always changing and developing and the ‘New Normal’ has been magnifying the lack of automatic or digital processes in the industry,” he said.

“Right now, physically meeting people is central to the way things are done but it is crazy that an industry is so dependent on two or three events per year. It’s not the case in the entertainment industry where the use of digital marketplaces is much more common.”

On the other side of the business is the Content Arena Rights Manager, born out of the desire to offer the sector a clear pathway from its traditional practices and into a digital present and future.

“Rights-holders tend to be driven by their next big live deal, which means that a lot of other rights tend to be neglected because they don’t have the resources to market them properly, whether in-house or by using an agency,” Lorenz explained.

“Our software is designed to allow them to do away with spreadsheets and have access to all the information about all of the rights in their portfolio in a couple of clicks. I know how time consuming it is to market smaller rights, and at a time where there is such a demand for new sorts of content and when slicing and dicing is standard, portfolios become more complex and difficult to manage in traditional ways.

“By providing access to information about what rights are available by type of content, territories, and platforms, and then adding the legal and contractual functions, we are digitising what were previously a lot of different manual processes and helping rights-holders optimise their businesses. Our aim is to help the industry to adapt to the New Normal and bring it to the next level by becoming the technology partner for all market players – federations, leagues, clubs, agencies and media companies alike,” he said.

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