1. At some point, Amazon is going to join the dots
On the tech panel, Thuuz Sports executive vice-president Wayne Sieve was convinced that at some point global tech giant Amazon would link its burgeoning sports broadcasting vertical with its colossal merchandising empire. “My family does most of its grocery shopping at Whole Foods [acquired by Amazon for $13.4bn (€11.5bn) in June 2017], we order most of our stuff through Amazon. They have so much data on us and our buying behaviour. They are not only selling subscriptions to content but selling more targeted advertising. They will have more data about me – like how many kids I have, how old they are et cetera – and they can offer more targeted sponsorships to brands. I can see a day where I will see a Gatorade ad and someone else might see a diaper ad. It will be the same moment with different sponsors, different advertising. Sport and spending money go hand in hand.”
2. Esports and the social media ‘super power’
Social media platforms such as Twitter have leapt on the popularity of esports by providing not only a means to watch esports events but also a way to see the conversation that is happening around events. This is what Laura Froelich, senior director, head of US content partnerships at Twitter refers to as “one of those big ‘Aha!’ moments that we had” in terms of “listening to the conversation on the platform and seeing where we had pockets of avid fandom”. People were “watching esports on Twitch but coming to Twitter to talk about it”. As a result, Twitter has struck partnerships with various content providers to stream popular events on the platform.
3. Sports teams are a strong asset class…
In his opening day keynote speech, Chuck Baker (pictured below), co-chair of O’Melveny Sports Industry Group, said that sports team ownership in the US has performed better in terms of rate of return than any asset class, except classic cars. NBA team values increased at a 27.6 per cent compound annual growth rate (CAGR) between 2011 and 2016, while MLB and NFL team values increased at a CAGR of 19.8 per cent and 17.4 per cent respectively, between 2011 and 2015. Two teams – the NFL’s New England Patriots and the NBA’s Golden State Warriors – increased in value by far greater proportions: the Patriots by 272 per cent between 2012 and 2018, and the Warriors by 861 per cent between 2010 and 2018.
4. …and investing in them is a serious business…
Although sports teams are still a trophy asset, the class is increasingly being driven by strong business fundamentals. On the private equity panel, GamePlan’s Bob Caporale and Greenwich Advisory’s Rick Perna both noted that investment into sports franchises was moving away from wealthy industrialists seeking trophy assets, to experienced investors seeking capital growth and tangible ROI. To an extent, the rocketing value of the leading sports teams has taken them out of reach of those seeking purely trophy assets.
5. …so US major leagues should relax investment rules
Caporale argued that the US major leagues could increase the value of their franchises even further if they simply loosened their pre-qualifying rules. He said: “Over time we are going to have to keep talking to the leagues and commissioners to get them to understand that in this new financial world they need to modify their rules to take advantage of the new financial reality for their existing owners. Not to be critical, but the people at the leagues are so busy running the leagues they don’t even think about this.” He put the onus on investors to keep pushing on the door that would allow funds to become controlling owners of teams.
6. Gaming operator profitability depends on new states opening
The April demise of the 1992 Professional and Amateur Sports Protection Act (PASPA) has given US states the opportunity to reintroduce legal sports betting, and ‘what happens now’ is the question on everyone’s lips. ‘It depends’ is the common answer, and generally it depends on which states follow New Jersey in deregulation, and how quickly. The betting operators – represented at the summit by Jamie Shea, the new head of digital for the DraftKings Sportsbook platform – have already spent huge amounts in sponsorship and advertising to carve out their position in what is still just a potential space. And the upshot is that their profitability in the US will depend on when the likes of Florida and California join the party.
7. Data will impact on how people bet on sports…
Angela Ruggiero, chief executive and founder of the Sports Innovation Lab, talked about how in-play data gathered from athletes will lead fan engagement and have an impact on sports betting: “There are all kinds of interesting data points now that are not only interesting to watch, but provide another layer of information that the fan (who wants to place a bet) could look at and analyse.” Heart rate and perspiration are just two of the data points that can be gathered to give an insight into how an athlete is performing in real-time.
8. …and athletes’ revenue share should also be addressed
Since sports betting has been legalised in the States, an ‘integrity fee’ or revenue share of between 0.2 and 1 per cent is being considered for athletes. Ruggiero (pictured below, centre) continued: “Those are new fees coming into the league and I think the athletes – and the unions in particular – are going to see them as an additional revenue stream and they’re going to want their cut. I think revenue distribution is going to be a hot topic because if there are new sponsors coming into the league, new integrity fees, or new ways the league is going to be profitable, then the athletes are going to want to participate.”
9. LaLiga’s Javier Tebas really wants teams to play in the US…
Tebas aggressively defended his plans to stage regular-season LaLiga matches in the States on the summit’s opening day, hitting back at Fifa president Gianni Infantino, who had released a statement airing his concerns that morning. Tebas said that Fifa “had no decision to make”, adding: “The responsibility of Fifa and federations is to grow the sport, not one league or game.” Since the event a number of protestors – including the Spanish football federation and Real Madrid president Florentino Pérez – have emerged, but commentators should note Tebas’s line: “There are some hurdles I’m sure we can overcome. At 2:45pm on January 26, there is no reason we won’t have this (Girona v Barcelona) match.”
10. …but the Bundesliga doesn’t
Bundesliga International chief executive Robert Klein (pictured below, centre) confirmed Germany’s top football league wouldn’t stage a regular-season match abroad – unlike its Spanish counterpart – even though the US is the league’s key target market. Klein said: “It’s something we have looked at. But from our perspective we will not play a regular-season Bundesliga match overseas. Take the premise of no competitive game but another game? The Super Cup has a different dynamic. We would look at it. There is definitely more flexibility there. We would never say no.”
11. Manchester United ‘undersold’ their shirt front
DataPOWA chief executive Michael Flynn kicked off day two with a huge claim: that Manchester United undervalued their front of shirt rights in 2012’s seven-year deal with Chevrolet. Flynn claimed – based on DataPOWA research – that the Premier League club could have asked for £66m a year rather than the £49m it got from the American car manufacturer. For good measure, Flynn said Real Madrid’s sale of Ronaldo to Juventus meant the Champions League winners no longer occupied the top spot in its index and that the NBA had supplanted the team as the most powerful sports sponsorship platform in the world.
12. F1 is racing away from ‘one-size-fits-all’ fan experience
Delivering fan experience is a constantly-evolving process, as market characteristics and segmentation are both in a constant state of evolution. Under its new ownership, Formula One is catching up – according to Keith Bruce, president of QuintEvents International and Formula One Experiences – following a period of ‘one-size-fits-all’ complacency, where the changing needs of fans were being ignored. The emergence of the ‘executive fan’ – independent, but with an interest in a corporate hospitality-type experience and the willingness to pay for them – is driving the development of new ticketing categories and new fan experiences at F1 grands prix.
13. Sometimes there’s no shortcut
The Miami Marlins’ video pod gives fans at the stadium a place to record their feedback for the franchise’s ownership. According to Chip Bowers (pictured below), president of business operations, it delivers a new stream of useful feedback and a powerful way to show fans you really want to hear what they have to say. But you have to put in the hard yards to listen: the architect of the feedback pod has had to physically sit and watch over 3,000 fan video messages.
14. Latin American fans can mean local is international
Compared to some US sports franchises, the Marlins are focusing on local fans – but Miami’s particular demographics mean this doesn’t have to come at the expense of international supporters. Sixty-three per cent of the team’s fans are Latino, and by targeting Venezuelan and Cuban communities it puts itself in a strong position to win the support of their families residing overseas.
15. Fans will become ‘directors’ of sports coverage
“Within a few years you will be the director of the game you are watching,” according to Guy-Laurent Epstein. The marketing director at Uefa told our media panel that the market had evolved more quickly in the last 10 years than at any time in its history, and that increased personalisation was a key trend. “If the match is PSG v Liverpool, for example, the Paris fan will be able to watch the whole match build-up from a PSG perspective and watch the match from a PSG angle. The Liverpool fan will be watching the same match from the same provider but seeing everything from a Liverpool angle.”
16. Joint rights acquisitions are on the menu
BeIN Sports is a big beast in several major media markets worldwide, but only a bit player in the US. John Duff (pictured below, centre), the broadcaster’s director of business development and strategy, used the Summit to let the market know that – in a reversal of unwritten company policy – he was open to co-bids with, well, anyone. “I can’t eat all of the rights,” Duff said. “So I’m happy to co-bid, whether you’re a cable operator, satellite, telco, OTT platform. Pure play, DAZN or Fubo – I don’t care, I’ll do a co-rights deal with you.”
17. Your friends can be your enemies (and vice versa)
“Your friends can be your enemies,” says John Gleasure from sports streaming platform DAZN, as he noted the importance of social media platforms Facebook and Twitter as two of the “most important marketing channels for us to communicate what we’re doing and driving subscribers in, onto our service”. Whether the platforms themselves feel the need to be primary rights owners or whether they would prefer to distribute services is in itself another issue: “I can’t speak for them [about] where they’re going to go with their various services [however] we do believe we will be working extensively with them.” Gleasure adds: “They’re doing pretty well out of their distribution and as a platform for us to distribute out of.”
18. Pro-rel debate hasn’t gone away
‘Insurgent’ candidates – which is to say those in favor of promotion and relegation in US soccer – may have been soundly defeated in the US Soccer presidential election, but their hobbyhorse has hardly been put down. Our US soccer panel saw beIN Sports presenter Kevin Egan and Joe Barone (pictured below), chairman of the amateur National Premier Soccer League, state their cases in favour of pro-rel. But there was vehement counter-argument from Kevin Payne, chief executive of US Club Soccer, who was the second speaker (after Javier Tebas) to call out Fifa president Gianni Infantino – in this case with his comments that it was time to consider pro-rel. “Gianni is from a long tradition of Fifa presidents from Switzerland who don’t understand the US sports system. He should be thinking about cleaning up Fifa instead of suggesting business models for US soccer. Promotion and relegation is a relic from the days when this was not really a business.”
19. Cultural differences should never be underestimated
Just because a culture doesn’t greet the NBA with whoops and cheers doesn’t mean they’re not excited to see it. That is what Joanna Todd (pictured below, left), vice-president, global partnerships and strategic alliances at Marriott International discovered through various experiences when the hotel chain activated its global partnership with the league. “You’ve got to understand the cultural nuances. There’s a big difference between activating in Japan versus activating in China. So do your homework there. Understand that fan and recognise that the same fan in the US looks very different overseas.” Todd specifically referred to a moment when the partnership was activating in South Africa, “a much more conservative culture”, and the reaction of South Africans to meeting NBA players was a lot more reserved than was expected.
20. Premier League won’t follow LaLiga into regional sponsorships
Every major rights-holder wants to court Asian brands but, according to head of sales and marketing Will Brass, the Premier League won’t be following its Spanish peer down the path of striking regional deals. “Once you go down a regional offering, particularly when talking about an IP-based sell,” said Brass, “you risk encroaching on your Global Partners and you risk encroaching on sector exclusivity and disturbing the clarity of what you are selling in the first instance.”