The old maxim about necessity being the mother of invention has rarely been more apposite than it was in 2020.
As the world went into lockdown and sports event across the board were cancelled – in some cases for the first time since the Second World War – rights-holders, federations and industry suppliers were forced to think on their feet.
Some proved more adaptable than others, succeeding in shoring up commercial positions and protecting stakeholders with a view to returning to normal in the future. Industry service providers who were able to provide technological solutions to the crisis came to the fore, while there were also rich opportunities for shrewd investors.
In this extended piece, SportBusiness looks at some of success stories and deals that bucked the general sense of stasis in the sector in 2020.
The Indian Premier League
There were some sensational resurrections of major sports competitions this year following enforced shutdowns. Mountains, and in some cases entire leagues, were moved to get sport up and running again. Too little tribute has been paid to these efforts, and there are operational staff behind the scenes at many sports that deserve medals every bit as much as the on-field and on-court champions this year.
Some of the more remarkable efforts included the NBA decamping to Walt Disney World, the UFC’s Fight Island, the Chinese Super League’s double bubble, and Formula One proving its travelling circus was still possible. There were many more besides.
In Asia-Pacific, the standout comeback was arguably the Indian Premier League. India’s biggest sports league was moved lock, stock and barrel to the United Arab Emirates for six weeks from September to November. It was a script that might have come out of Bollywood, featuring some of India’s biggest celebrities, a journey beset with mishaps, helpings of glitz and glamour and, at the last, a happy ending.
Among the challenges the organisers faced was the withdrawal of league title sponsor Vivo in August, the partnership a victim of tensions between China and India. Three weeks before the tournament was to start, the Chennai Super Kings reported an outbreak of 12 positive Covid-19 cases in their camp, prompting star batsman Suresh Raina to fly home to India. A surge in infections in Abu Dhabi resulted in further jitters.
But the league got underway on September 19 and completed a 60-match season, with the Mumbai Indians winning their fifth title on November 10. A strong slate of sponsors and advertisers was in place, with fantasy sports platform Dream11 replacing Vivo, teams agreeing a slew of deals ahead of the season start, and broadcaster Star India enjoying strong advertising sales. Star reported record audiences in the aftermath, with viewership up 23 per cent on 2019. “IPL” even topped “coronavirus” as the most-searched term in India on Google.
IPL 2020 proved it is possible to run a major tournament, that requires international travel, within a bubble. Its television audiences hinted at the enhanced demand for live sports content this year. And its commercial success suggested that there were significant revenues available for those sports that could retake the field.
The sports documentary
What were you watching on those evenings at home during the first lockdowns, when sport had ground to a halt? Chances are you spent a few of them with ESPN and Netflix’s The Last Dance, the documentary about Michael Jordan’s incredible NBA career and double three-peat with the Chicago Bulls.
Producers ESPN and Netflix smartly moved the planned broadcast of the series from June to April when pandemic lockdowns started to hit, to take advantage of a massive, sports-starved audience. The result was the most-watched documentary content ever for ESPN, where it aired in the US. Outside the US it was streamed on Netflix and had been watched by 24m households by the end of May. With live sport at a halt, the OTT platform that, to our industry’s eternal disappointment, refuses to enter sports streaming, found itself with the world’s hottest sports video content circa April and May this year.
Sports documentaries have been attracting increasing producer and audience interest in the last decade, powered by series such as ESPN’s 30 for 30 and more recently Amazon’s All or Nothing. This year, their stock soared as broadcasters, streamers, rights-holders and agencies were suddenly forced to source alternative content when live competition stopped.
As well as being valuable and interesting pieces of content in their own right, documentaries have the potential to reach new audiences for sports and to stimulate interest among commercial partners and investors.
More documentary and related non-live sports content initiatives have been announced in recent months, including 30 by 30 co-creator Connor Schell leaving ESPN to set up his own production company, the NBA working with Amazon’s Audible on a spin-off podcast series inspired by The Last Dance, and DAZN committing to docuseries content to power its new global streaming platform.
The Last Dance had sports content professionals in raptures, and taking copious notes. Great documentaries are based on great storytelling. Given sport’s deep reserves of great stories, this looks like a seam that will be mined and mined in years to come.
NBA’s Disney bubble
The National Basketball Association was a first-mover in the early days of the Covid-19 pandemic, swiftly suspending its entire league schedule upon receiving news of a positive test by Utah Jazz center Rudy Gobert.
Industry eyes, not surprisingly, remain fixed on the NBA commissioner Adam Silver and National Basketball Players Association executive director Michele Roberts as they attempted to figure out how to restart competition and complete the 2019-20 season amid a still-raging public health crisis.
After weeks of intense negotiations, the parties settled on a fully quarantined plan in which 22 of the league’s 30 teams resumed play at the ESPN Wide World of Sports in Orlando, Florida, a sprawling complex owned by key league media partner ESPN and its parent company Walt Disney Co. For more than three months, everyone involved in the NBA effort – including players, coaches, referees, game support and broadcast personnel – lived within the “bubble” and were required to adhere to strict health and safety protocol and undergo regular virus testing.
The NBA bubble required significant lifestyle adjustments for all those involved, as well as nearly $200m in financial investment by the league to complete. And without any attending fans, the league and its technology and media partners were also forced to fundamentally rethink game presentation and fan engagement. Each of those elements were further refined during the season restart to incorporate crucial messages around important causes such as racial equality and voter participation.
But despite all those challenges, on-court competition within the NBA bubble remained spirited, ultimately resulting in the Los Angeles Lakers’ first title in a decade. And even more critically, the league’s bubble experience concluded without any positive Covid-19 tests, mirroring operational success the National Hockey League and Women’s National Basketball Association saw this past summer for their own similar bubbles, and coming despite grim scenarios elsewhere in Florida.
Tim Leiweke’s stadium developments continue
The Covid-19 pandemic slowed down, or entirely stopped, a large amount of stadium development activity around the world for safety, financial, or other reasons. And the entire live events industry is hemorrhaging revenue at historic levels.
But seeing boundless opportunities where others see only pitfalls and misfortune, Oak View Group chief executive Tim Leiweke is leaning firmly into the pandemic in historic ways.
The California-based venue development company led by Leiweke has no less than four major venue development projects currently in process in New York; Seattle, Washington; Austin, Texas; and Manchester, England; along with several other efforts additionally underway.
If that wasn’t already enough, Leiweke and Oak View are also setting the industry pace with its embrace of environmental and sustainable venue operations. Part of that mindset was signified by a unique, cause-based naming rights deal with Amazon for the forthcoming Seattle venue, Climate Pledge Arena.
The naming pact, worth as much as $400m, veers well outside of typical sponsorship sales norms and was just one of several large-scale naming rights pacts Oak View brokered in 2020, including another between UBS Inc. and the National Hockey League’s New York Islanders.
But another key portion of that approach stems from Leiweke’s fervent push to create a broad-based industry task force to create a set of universal industry standards for building safety in a variety of areas such as cleaning, sanitization, recycling, and air circulation.
Such measures will be critical as the core notion of fan attendance, even with the arrival of a Covid-19 vaccine, is fundamentally altered due to the pandemic.
It’s little wonder, then, that Islanders co-owner Jon Ledecky called Leiweke “the Babe Ruth of arenas.”
Steve Cohen becomes MLB’s wealthiest team owner
Much of the New York Mets’ history has been tied up in underachievement and disappointment. Despite winning two World Series and having one of the great all-time pitchers in the now-late Tom Seaver for the key chunk of his career, the Mets story is intertwined heavily with heartache.
There were, of course, a litany of on-field near-misses and forfeited opportunities. But to most industry observers and long-suffering Mets fans, those misfires were all merely outgrowths of the marked financial weakness of the team’s prior ownership, the Fred Wilpon-led Sterling Partners. Despite Wilpon’s gentlemanly reputation, cultivated over four decades of Mets ownership, the club frequently didn’t have the monetary wherewithal to compete strongly in the United States’ largest media market.
Partially caught up in the Bernie Madoff financial scandal, Sterling Partners was forced over the past decade to resort to a series of bridge loans and minority equity sales of the Mets to help shore up the team’s finances.
All that dramatically changed this year with the arrival of new majority team owner Steve Cohen. Acquiring the team from Sterling Partners in a record-setting deal worth more than $2.4bn – the largest-ever transfer of a North American pro team – the hedge fund billionaire immediately became Major League Baseball’s wealthiest team owner with an estimated net worth of more than $14bn.
Cohen, resurrecting a prior failed bid for majority control of the Mets, also immediately brought in a much more aggressive operational mindset, buttressed in part by the return of former club executives Sandy Alderson and David Newman in expanded roles as team president and executive vice president, respectively.
“I’m not in this to be mediocre,” Cohen said. “That’s just not my thing. I want something great, and I know the fans want something great. So that’s my goal, and that’s what I’m going to do.
“If I don’t win a World Series in the next three to five years, and I’d like to make it sooner, I would consider that slightly disappointing,” he said.
Virtual advertising fills empty stadiums
Vast swathes of empty seating in stadiums and an appetite among rights-holders to unlock new sponsorship inventory to compensate clients for lost rights have led to an upsurge in virtual advertising this year.
The main beneficiaries have been digital replacement technology companies like Supponor and Vizrt, as well as agencies operating in the space like the Interregional Sports Group (ISG).
In July, ISG expanded an existing deal with Serie A to project virtual branding and graphics onto empty stands when the Italian league resumed its 2019-20 season behind closed doors. Prior to the pandemic, the agency also drew on the technology to broker Formula One’s first ever regional betting sponsorship deal with Asia-facing online betting brand 188Bet.
In October, Supponor chief executive James B Gambrell said the company had seen “a significant breakthrough in commercial deployments” of its virtual advertising solutions in 2020, which added to lucrative contract renewals. These included a three-year extension to the company’s deal with the Sportfive agency for virtual advertising technology at Bundesliga matches, plus an extension with the Mediapro agency to use its ‘DBRLive’ (digital billboard replacement) virtual LED perimeter replacement product and its ‘NSA’ (natural scene augmentation) virtual carpets product.
The technology didn’t only serve to promote sponsors stripped of other activation opportunities. LaLiga worked with Vizrt and Spanish production group and rights agency Mediapro to overlay ‘virtual fans’ wearing home team colours into empty stadiums when it resumed behind closed doors in June. Given the choice, LaLiga says nine out of ten fans opt for the virtual overlay ahead of the ‘real’ fan-free option. The league also used the technology to promote public health messages during stoppages and at half-time. A spokesperson said a message to promote Spain’s Covid app led to downloads increasing by 100,000 in 24 hours.
Perhaps inevitably, increased experimentation with the technology also led to questions about the prominence devoted to some sponsor brands. Major League Soccer arguably overstepped the mark when it emblazoned a giant Adidas logo onto the centre circle during its MLS is Back tournament in mid-July. Major League Baseball, meanwhile, also rapidly embraced the technology as it played nearly its entire 2020 season without attending fans.
Now the genie is out of the bottle, you can expect rights-holders to be reluctant to put it back in.
EFL’s iFollow service supports club sponsorship and ticketing revenues
With football fans locked out of stadiums for most of this year, the English Football League has expertly offset a proportion of lost ticketing income with new direct-to-consumer revenues from its iFollow streaming service.
At the start of this season, the EFL, which governs the three tiers beneath the Premier League, struck a deal with its domestic broadcast partner Sky which meant all matches not shown by the broadcaster could be streamed on iFollow at a cost of £10 (€11/$13) per game. The decision to lift the blackout restrictions on 3pm kick-offs also increased the amount of content available on the service.
Speaking to SportBusiness this month, Ben Wright, chief commercial officer for the EFL, estimates the league has generated over £8m in direct-to-consumer revenues as a result of the decision. Although this has not offset the estimated £20m its 72 member clubs are thought to be losing every month, the income has gone some way to supporting clubs through the crisis.
Cleverly, season-ticket holders at Championship, League One and League Two clubs have also been given access to all their club’s home and away matches on iFollow or club channels, helping to dissuade fans from requesting expensive refunds.
In an interview with SportBusiness in November, Jon Varney, chief executive of EFL Championship side Brentford FC, credited the iFollow season-ticket offer for helping the club to retain 94 per cent of season ticket revenue.
The increased numbers of matches and larger iFollow audience have also provided clubs and the league with additional sponsorship inventory to sell. The EFL agreed a short-term deal with Just Eat to sponsor the platform between football’s restart in May and the end of the 2019-20 season. Meanwhile, Brentford was one club to have created a 30-minute pre-match show for the club’s iFollow coverage, which provided sponsored content opportunities for club partners.
(𝘚𝘱𝘰𝘪𝘭𝘦𝘳 𝘢𝘭𝘦𝘳𝘵: 𝘺𝘰𝘶 𝘸𝘰𝘯’𝘵 𝘸𝘢𝘯𝘵 𝘵𝘰 𝘵𝘶𝘯𝘦 𝘪𝘯 𝘭𝘢𝘵𝘦 𝘧𝘰𝘳 𝘵𝘩𝘪𝘴 𝘰𝘯𝘦)
— U.S. Soccer WNT (@USWNT) May 11, 2020
Fifa’s in-house archive enables nimble decision-making
Faced with a dearth of live sports content, 2020 was the year right-holders were forced to plug gaps in their broadcast partners’ schedules by freeing up archive content and even creating new virtual derivatives.
Fifa arguably led the way, making more than 32 historic men’s and women’s World Cup matches available for free to partner broadcasters and across social media through its WorldCupAtHome campaign.
Speaking exclusively to SportBusiness in March, the governing body’s chief commercial officer at the time, Simon Thomas, credited the federation’s decision to take its audiovisual archive services in-house for enabling it to make the decision quickly.
Previously managed by Switzerland-based Infront agency, the governing body transferred the physical match footage from the agency’s offices in Zug to Fifa’s headquarters in Zurich in Switzerland.
Thomas said: “If we were dealing with an agency in between we probably would have had a more complicated set of conversations around the financial implications.”
The award-winning campaign has, at the time of writing, generated over 100 million video views, engaging 14 million users globally – and all in a year Fifa didn’t have any major events scheduled. More importantly, it positioned the governing body in an altruistic light, not seeking to profit from the crisis but using its platform to promote a ‘stay at home’ public health message.
The governing body was supported on the campaign by the WePlay digital agency, which has also had a stand-out year. The agency buttressed its work with football’s governing body by scoring new contracts to drive over-the-top subscriptions for both the World Rally Championships and equestrian sports network Horse & Country.
There were also some eye-catching pieces of recruitment, with Barney Francis, the former managing director of the UK arm of Sky Sports, appointed to the advisory board of the firm.
In an interview with SportBusiness in September, Francis suggested the Covid-19 pandemic had hurt OTT operators like the DAZN Group who initially lacked non-live sports content to fill programming schedules.
“If you are a business or the restaurant at the end of the street, what did you do to retain your customers when you were in lockdown?” he asked. “You offered some sort of takeaway service. If you weren’t providing takeaway, then you lost your customers because they were going elsewhere.”