European football revenues are reaching record levels, thanks in part to the continued growth and popularity of the top European leagues in the biggest markets—England, Germany, Spain, Italy, and France. While the Premier League retains its leadership in financial terms, it faces strong competition from other European football leagues making focused, creative efforts to enhance their global appeal and close the gap with the Premier League. Combine this mounting competition with a growing shift toward digital entertainment consumption, and you’re likely to see multiple future wins for the global football industry (and yes, for the Americans out there, that includes US soccer).
Deloitte’s World in Motion: Annual Review of Football Finance 2019 is a comprehensive analysis of financial trends in the world football industry. This 28th edition of the report outlines the latest in the ever-fluid field of football finance. What will teams and leagues need to do to ensure continued revenue growth? Which investments in talent, marketing, partnerships, and infrastructure will have the best effects on strategy?
Valuing sports content with the move to digital
With the increasing shift towards digital, more and more people—call them cord cutters, shavers, or cord nevers—are choosing to reduce, or even cut out, traditional content providers.
In this climate, media and entertainment companies see attracting and retaining audiences as priority one—and the value of compelling, exclusive content has never been higher. The message is not lost on global technology companies. Each of the FAANGs (Facebook, Apple, Amazon, Netflix, and Google/Alphabet) has either launched or announced a content-delivery platform. Exclusive content is seen as one of the best means of increasing time spent on a platform and a rich ecosystem of complementary sports programming—behind-the-scenes footage, data visualization, fantasy sports, e-sports, e-commerce, gamification, and betting data—all offer additional means of extending audience engagement long after the final whistle is blown.
Live sports is one of the few remaining forms of “appointment viewing,” unrivalled in its ability to draw a passionate, loyal, and engaged fan base—and one still prone to put money into both content and ancillary items. Streaming platforms also enable content delivery in a way that suits the preferences of a truly global younger audience. Digital platforms can also capture far more data on exactly who these fans are and what they like—valuable consumer insights that are limited or nonexistent with traditional broadcast media.
Uncertainty is natural
Given these factors, the owners of premium sports rights and the FAANGs seem like natural partners. But both appear to be cautious in their courtships; despite all the speculation, we’ve yet to see a major package of premium sports rights acquired by one of the big five. And despite their deep pockets, the FAANGs are unlikely to acquire premium sports rights without an underlying business rationale. And premium sports rights owners have just as many issues to consider before taking the leap. Download the full report for a deep dive into key considerations for both parties.
Calling the next play
For now, it seems, both owners and technology companies would benefit from negotiating nonexclusive rights. The long-term plan of such “freemium” models: use freely available content to increase exposure to the sport, engage users with short-form and behind-the-scenes footage, and then, over time, encourage conversion to subscription services.
The challenge for rights owners is to find the right balance—using digital platforms to broaden exposure to the sport without endangering relationships with traditional partners. In the short term, we expect today’s experimental stage to continue, with both rights owners and the FAANGs learning how sports, and broadcasting of live sports in particular, aligns with their business models and strategic priorities.
Download the full report: World in Motion: Annual Review of Football Finance 2019
In his leadership role, Mark Casey guides strategy across the global network of Deloitte’s Telecommunications, Media & Entertainment (TM&E) professionals to ensure high-value approaches to client engagements and solutions. Currently a partner in the Netherlands firm, Mark brings more than 25 years of experience in providing operational and technology-enabled solutions across the TM&E ecosystem. Mark is active in the M&A domain for media companies and in the transformative changes for newly acquired businesses and their back-office evolution. In addition, he helps companies internationalize their businesses, dealing with market entry and expansion considerations, and identifying partnership opportunities to accelerate their growth.