MONACO OCTOBER 2016
THE VALUE OF SOCIAL MEDIA The future of the UCL Big five league revenues Summer sport ratings
BUILDING THE BIG MOMENTS
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Dear Sportel Delegate, Welcome to the TV Sports Markets Sportel Briefing for Sportel Monaco 2016. Our chief sports writer Frank Dunne is a familiar face in Monte Carlo – this year you’ll find him hosting ‘Social media: from ancillary option to primary distribution platform’ on Monday at 2pm. The panel will aim to answer some of the burning questions about the sector, including which platforms content producers are choosing to work with, whether monetisation is the right objective and whether the relationship between producers and platforms is fundamentally asymmetric. That question – are social media platforms getting a lot more out of sport content than those who produce it – forms the theme of Frank’s overview on page 6. Make sure you read it before you head along to the panel! Immediately thereafter, on page 8, you’ll find our editor Robin Jellis analysing the impact of Aleksander Čeferin’s election to the role of Uefa president on the sale of its club competition rights. As ever, our Sportel Briefing is a snapshot of what’s available to TV Sports Markets subscribers. This year our three selected articles cover the sale of domestic Bundesliga rights, the takeover of MP & Silva by Chinese investors, and the launch of IMG & Turner’s ELeague. You’ll find those from page 12. On pages 20 and 21 we have two recent selections from our host of interviews with industry executives: with Matchroom Sport supremo Barry Hearn and Perform Group chief executive Simon Denyer. From our Rights Tracker service, there’s a look at the cycle-on-cycle change in domestic media-rights income of Europe’s top five football leagues, and a comparison of their international revenues (page 10). Also from Rights Tracker, on page 22 we list the 10 biggest deals since Sportel Asia. On page 16, the SportBusiness Intelligence unit has reviewed European audiences for six major properties over the last two decades, and analyses ratings of the two biggest sporting events of this summer: the European Championships and Olympic Games.
THE VALUE IN SOCIAL MEDIA
UEFA’S NEW MAN
Frank Dunne considers whether sport is getting back from the social media platforms as much as it puts in Robin Jellis asks what the election of Aleksander Čeferin might mean for the future of Uefa’s Champions League
10 BIG FIVE LEAGUES REVENUE
TV Sports Markets Rights Tracker analyses the cycle-on-cycle growth in rights fees for Europe’s big five leagues
Major TV Sports Markets stories since March 2016, covering Bundesliga domestic sales, the MP & Silva takeover, and the ELeague launch SportBusiness Intelligence reviews the trends in European audiences for six major properties since 1996
20 FEATURE INTERVIEWS
Our staff will be present at stand G03 in the Grimaldi Forum – please drop by, or get in touch using the contact details below. For enquiries about accessing TV Sports Markets content, or to advertise in the next Sportel Briefing, call David Hunt, our senior account manager.
Two of TV Sports Markets’ top Q&As since Sportel Asia, featuring Barry Hearn and Simon Denyer
We wish you a productive and enjoyable Sportel!
22 TOP 10 DEALS
The 10 biggest deals since Sportel Asia
Richard Welbirg Senior Reporter TV Sports Markets
THE TV SPORTS MARKETS TEAM Robin Jellis Editor [email protected]
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Callum McCarthy Reporter
David Hunt Senior Account Manager
Paul Santos Head of Business Development
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(mob) +44 (0)7816 856 581 +44 (0)20 7265 4115
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Richard Welbirg Senior Reporter [email protected]
(mob) +44 (0)7738 421882 +44 (0)20 7265 4233
Frank Dunne Chief Sports Writer, SportBusiness Group [email protected]
(mob) +39 3495 846423
Ben Speight Head of SportBusiness Group
Robin Hume Head of Media Sales
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WWW.SPORTBUSINESS.COM/TV-SPORTS-MARKETS The paper used within this publication has been sourced from a Chain-ofCustody certified manufacturer, operating within international environmental standards such as ISO14001 and EMAS. This is to ensure sustainable sourcing of the raw materials, sustainable production and to minimise our carbon footprint.
SPORTEL BRIEFING The passion for sports news and video content is helping drive consumption of social media which helps the Silicon Valley giants to reach those mind-boggling market caps. What is sport getting in return? BOTTOM LINE
WHAT IS THE VALUE OF SOCIAL MEDIA? FRANK DUNNE ASKS IF SOCIAL MEDIA IS PAYING OFF FOR SPORT THE BEDROCK OF the global media
landscape is now digital, mobile and social. Athletes, teams, leagues, federations, confederations and brands are putting social at the heart of their relationship with fans. But does anyone really understand where the value of social media lies? And is sport getting its just reward for driving millions of people to social media platforms? In the not too distant past, the only kind of table a football club and its fans would be bothered about would be the league table after the most recent round of matches. But we live in the age of social media and there is a new kind of table which executives at clubs around the world are poring over. You will no doubt have seen one version or another: social media activity tables, which rank clubs according to how many likes they have on their Facebook page, how many followers on Twitter, and so on. A whole industry is growing up to deliver analysis of social media activity, but does anyone really know the value of a Like, a Share or a Retweet? As Alex Willis, who oversees Wimbledon’s award-winning social media strategy, puts it: “All of us are dancing around the question: what is the value of the fan in social media?” AGEING AUDIENCE
Social media platforms and messaging apps deliver many benefits. The most obvious
are that they are available globally and have become the default portal through which millennials and Generation Z kids engage with the outside world. If you’re not a broadcaster, here’s a fun game for you to play at Sportel this week. Ask any senior exec from any European broadcaster the average age of the live audience of whatever is their second most popular sport after football. Chances are they won’t tell you. Chances are that number begins with a five. Then ask them how many minutes per week their average viewer between 18 and 24 spends watching their content. And how that compares to 10 years ago. Good luck with that one. This is exactly the kind of thing that is keeping them awake at night. The ageing of the linear TV audience is hardly a secret but it remains a bit of a taboo subject. This is despite the fact it is increasingly dominating the agendas of the top executives at what are now endearingly called the ‘legacy’ media players across the continent. And as a consequence, it is also informing the strategies of the world’s content producers, including sports bodies. This has led to a huge increase in the amount of video content made available via social platforms. But those under-pressure legacy broadcasters are still paying sport’s bills for the most part. Meanwhile Facebook, which is valued at about $350bn (€313bn), pays sport nothing.
The easiest way for sport to judge whether social is worth all the effort is by looking at what it does for the bottom line. For many years, YouTube was the only platform providing sport with a return. Its revenue-share deals on advertising sales (typically split 55:45 in favour of the rights-holder) pump tens of millions of dollars a year into the sport ecosystem. Facebook is working on a similar model, which should at least double that amount. Twitter has taken a different, and in some ways, more traditional route: buying rights and paying minimum guarantees. In April, the platform agreed a deal worth about $14m to live stream this season’s NFL Thursday Night Football games nonexclusively. The games are also available on network TV but Twitter was still targeting $50m in advertising revenue. The company followed this with deals for live streaming of one out-of-market MLB baseball and NHL ice hockey game every week from the 2016-17 season, for live streaming over 150 US College Sport events during the 201617 academic year, and several others. Twitter’s first NFL live stream, between the Buffalo Bills and the New York Jets last month, was seen by a cumulative audience of 2.1m people (compared to 48.1m on network television), with an average of 243,000 (compared to 15.4m on TV). The numbers were generally considered to have been an encouraging start. The New York Times reported in August that Anthony Noto, Twitter’s chief financial officer, was negotiating with numerous other sports bodies, including Major League Soccer and golf ’s PGA, to conclude similar deals. The platform has identified live sport as a route to maintaining user growth, which had flatlined. With Amazon also talking to multiple sports bodies, a tantalising prospect opening up for sport is a new platform war in which global OTT retail giants battle it out with social media platforms and increasingly globalised traditional media groups.
SPECIAL FEATURE DATA IS THE NEW GOLD
After cold hard cash, the second most valuable return for putting content on social media platforms is data. This was underlined by the deal that saw UK pay-television operator BT Sport allow YouTube to live stream May’s Uefa Champions League final between Real Madrid and Atlético Madrid. The game was watched by 1.8m on YouTube and 4.3m on BT Sport. BT’s primary motivation in doing the deal was not incremental revenues from the stream, but the data. YouTube provided BT with data on every viewer, something which Mike Norrish, the digital executive producer at BT Sport, said was the only way to make streaming sports on social sites commercially viable. That data can be used as a powerful and costeffective acquisition tool. BT was able to target every viewer the following week with its sports offering and again in the buildup to the new football season in August. As Norrish told UK media of the deal: “It’s a data buy, essentially. We’re going to get a certain amount of cookie data and
if we convert a portion then it will result in a certain lifetime yield. It’s an easy calculation. From a business point of view, the position of what you get back from those platforms to achieve your business goals is certainly something we’re looking for this year and how we do it in the future.” YOUTUBE V FACEBOOK
Norrish contrasted the data feedback from YouTube with that of Facebook. “Speaking candidly – we’re getting cookie data [from YouTube] and that’s great but not necessarily true of other platforms. Data is Facebook’s business and so what they give you back is limited.” But one of the big differences between YouTube and Facebook lies in the way the two sites tend to be used. Sports fans tend to go to YouTube to look for a particular goal or highlight and may stay on the platform and explore other videos. Facebook, on the other hand, is a default communication platform for many young people, the first thing they open in the morning, and
where they spend hours every week. The International Basketball Federation (Fiba) is using both YouTube and Facebook to live stream the same youth tournament matches this year. For the U-17 World Championships in Spain in June and July, Facebook drew the bigger audiences. Of the 5.7m total live views, 3.1m were on Facebook and 2.5m on YouTube. For the round-of-16 men’s game between Australia and Bosnia and Herzegovina, a total of 200,000 viewers watched live across both platforms, of whom 111,230 watched via Facebook and 85,231 on YouTube. One way or another, social media is set to play a greater and greater role in the distribution of sports content. Sports bodies and broadcasters are exploring it, testing business models and distribution strategies. The opportunity is great. But in the short term, there are still more questions than answers about how best to exploit that opportunity. And there is still an open question about who the real winners are: sport or the social media platforms?
Frank Dunne will host a panel on this topic in the Conference Room on Monday at 2pm SOCIAL MEDIA: FROM ANCILLARY OPTION TO PRIMARY DISTRIBUTION PLATFORM
Gareth Capon Chief executive Grabyo Gareth Capon is CEO at Grabyo, the global market leader in real time social video. Grabyo partners with broadcasters and rights-holders to maximise reach, engagement and content monetisation across Facebook, Twitter, Instagram, YouTube and other digital platforms.
Christoph Heimes Head of news and sports partnerships, Google/YouTube Christoph Heimes has been YouTube’s head of sports partnerships in EMEA since 2014 and has recently taken over the company’s news partnerships. Before joining YouTube, Heimes worked in various sales and business development positions at Google and Microsoft.
William Field Partner Prospero William Field founded sports and media strategic advisory firm Prospero in 2009. He has over 25 years’ experience in strategic management consulting and is an internationally-recognised expert in sports media who has advised many of the world’s top rights-holders and broadcasters.
CHALLENGES AHEAD FOR UEFA’S NEW MAN ROBIN JELLIS CONSIDERS WHAT THE ELECTION OF ALEKSANDER CEFERIN MIGHT MEAN FOR THE UCL & UEL COMING AGAINST THE backdrop of
a growing power struggle in European football, the election of Aleksander Čeferin as Uefa president has thrown the proverbial cat among the pigeons. Čeferin was seen as the candidate most likely to favour Europe’s smaller clubs in the battle for the future of European club football, whose first shots were fired on August 26. It was then, following what it described as “an extensive consultation process involving all European stakeholders”, that Uefa announced changes to its Champions League and Europa League competitions to be introduced for the 2018-19 to 2020-21 cycle. The most significant, and most controversial, amendment was that the top four clubs from the four top-ranked national associations would qualify automatically for the Champions League. Less than two weeks later, on September 8, the European Professional Football Leagues protested the changes put forward by Uefa, saying it believed “the way this process has been conducted by Uefa to be unacceptable for an organisation that claims to be the governing body of football in Europe”. The EPFL – the body representing Europe’s professional leagues – said Uefa’s changes did not have its support and claimed they would “lead to an exponential growth in the financial and sporting gap between the biggest clubs in Europe and all the others”. This sentiment was echoed by most of Europe’s leagues, although no representative
from Serie A was present at the meeting where the statement was agreed by the EPFL. Why had Uefa made changes to its flagship club competitions? Simply put – money. Specifically, money from broadcast and sponsorship rights. For months, the biggest clubs in Europe had applied pressure on Uefa, demanding more money from the governing body as their involvement guarantees Uefa high audiences and bigger rights fees from broadcasters and brands. The potential creation of a European Super League has been used as a bargaining chip to help Europe’s top clubs put pressure on Uefa for it to cede to their demands. Serie A’s absence from the EPFL meeting is thought to be because its clubs are among the most ardent backers of the changes to the Champions League. The fortunes of Serie A have been in slow decline, and the gap in terms of success and revenue to the top leagues – the Premier League, LaLiga and the Bundesliga – is widening. The last Italian side to win the Champions League was Inter in 2009-10. Since then, Barcelona and Real Madrid have each won the competition twice, while Bayern Munich and Chelsea have been the two other victors. Back to Čeferin. What does his election mean for Uefa’s proposed changes? And what does it mean for the next round of TV rights sales? Čeferin is currently president of the Football Association of Slovenia and on
September 14 beat Michael van Praag to the Uefa presidency by 42 votes to 13. Following his election, Čeferin said his Uefa would show the clubs “we are the ones who are the governing body”. As I write this, in the middle of September, the immediate impact is unclear. But it is likely broadcasting rights sales will be put on the backburner until a concord can be reached over the future format of European football’s premier competitions. This will be something of a frustration for Team Marketing, the agency which sells media rights to Uefa’s club competitions – although plans to launch a sales cycle from 2018-19 onward are understood to have been put in place early this year. According to TV Sports Markets research, Uefa earns about €1.5bn ($1.7bn) per season from deals in Europe and more than $556m per season from deals outside Europe – a total of almost €2bn per season. This is up from just over €1.4bn per season in the 2012-13 to 2014-15 cycle. If Uefa wants to continue this growth in broadcast rights revenue, Čeferin must – at least – paper over the cracks which have appeared at the top level of European club football. And long term, he will be seeking to establish unity between Europe’s clubs. But when the top clubs always want more – more autonomy, more guarantees, more money – you wouldn’t bet against the relationship between Uefa and its biggest clubs becoming increasingly fractious.
NEWS ADVERTORIAL REVIEW
BRACE YOURSELVES FOR THE NEW SPORTELMONACO SPORTELMONACO HAS completed its 27th year and is more popular than ever before. Every year, more and more of the international sports marketing and media industry unite here to build the future of brand communication and sports broadcasting. SPORTELMonaco is a historic convention and the industry’s elite continues to make the effort to participate in these conventions. This year is very special, as we announced the expansion of the new exhibition space. Our Diaghilev venue was first opened in 2011 with just a few stands. It has now grown to a 4000m2 giant, increasing SPORTEL’s total exhibition space to 8000m2 and doubling
the number of stands from 2015! Over the past 27 years we have seen professionals grow their business together with SPORTEL and it is great to see so many return and make it a point to build their business at SPORTEL year after year. SPORTEL today is an essential platform for the industry, aiming to stay the most advanced tool the industry can have. With new technologies come new opportunities for marketers and broadcasters. SPORTEL addresses these challenges and always provides new business opportunities for the industry. One of the challenges the industry faces today is Virtual and Augmented Reality. We will give detailed insight into how our
industry can profit from this technology in the ‘Business & Technology’ panel. New this year is the SPORTEL Law conference on Wednesday, directing attention to the legal aspects of our industry. Further we introduce the SPORTELMarketing panels that will give exclusive insight in how marketing approaches brand communication and how sports content is used to reach fans. SPORTEL welcomes you all to “Meet The Elite” at a convention that offers more space and more business opportunities. More info : www.sportelmonaco.com [email protected]
SPORTEL MONACO NEW EXHIBITION SPORTELMonaco attendees will be welcomed by a SPORTEL they’ve never seen before: bigger, brighter and with a new entrance that leads directly into the new exhibition level. It has been a satisfying experience to see this venue grow over the past years and we are thankful for how well it has been welcomed by the community. Only a few years ago this venue welcomed a handful of exhibitors and since then has grown into an inspiring venue that presents new and regular exhibitors side by side. Compared to SPORTELMonaco
2015, we have doubled the stands in the venue and reached a whopping total of 8000m2 of exhibition space. These positive developments have actually enabled us to enhance the floor design and we were able to create a better, more effective traffic flow, resulting in a vibrant and energetic atmosphere that reaches all venues. This development already has proven to be a positive one for the industry: since the announcement the floor space is close to being booked out.
PREMIER LEAGUE STILL LEADS THE WAY SPORTBUSINESS GROUP ANALYST MIKE KIERNAN COMPARES EUROPE'S BIG FIVE FOOTBALL LEAGUES IN TERMS OF BOTH INTERNATIONAL REVENUES AND CYCLE-ON-CYCLE CHANGES IN DOMESTIC INCOME
English Premier League
yySky acquired five of seven live packages and will show 126 matches; 26 are first-pick matches
2013-14 to 2015-16
yyBT will show the remaining 42 matches, with 12 first picks
2016-17 to 2018-19
yyLive rights from 2016-17 were retained by incumbent pay-TV broadcasters Sky and BT �1.349bn
yyOther revenues come from near-live and free-to-air highlights rights, as well as video-on-demand clips
Per-season domestic value
French Ligue 1 yyIncumbent pay-TV broadcasters Canal Plus and beIN Sports retained live rights 2012-13 to 2015-16
2016-17 to 2019-20
yyCanal Plus acquired three top-pick matches per week, taking one of the two top picks beIN had in the previous cycle yyCanal Plus will show all 38 first-pick matches yyBoth broadcasters also acquired linear highlights rights. BeIN secured videoon-demand highlights rights yy The broadcasters also acquired rights to the second-tier Ligue 2
Per-season domestic value
yySky acquired five of six live packages, including exclusive rights to the Bundesliga 2. It will broadcast 572 matches per season across all platforms yyInternational sports broadcaster Eurosport acquired the other exclusive package of live rights
2013-14 to 2016-17
2017-18 to 2020-21
yy A new ‘no-single-buyer rule’ for the 2017-18 to 2020-21 cycle meant pay-TV broadcaster Sky Deutschland could not retain the exclusive rights it held from 2013-14 to 2016-17
Per-season domestic value
MEDIA RIGHTS ANALYSIS TVSportsMarkets
For granular data and market-by-market breakdowns of these leagues and other sports properties see TV Sports Markets Rights Tracker. For further information, or to arrange a demo, call David Hunt on +44 (0)20 7265 4115 or [email protected]
Italian Serie A yySky Italia has live rights to all 20 teams. Its rights to the top eight clubs are satellite-only; those for the remaining 12 clubs are platform-neutral
yy The tender for the most recent cycle caused confusion, with rival broadcasters’ tactical bidding leaving the league in a position where it could not accept the highest bid for each package without contradicting both the terms of its own tender and the 2008 Melandri Law on collective selling, which prohibits a single buyer for all live rights on an exclusive basis
2012-13 to 2014-15
yyMediaset holds digital-terrestrial rights only to the top eight clubs
2015-16 to 2017-18
Per-season domestic value
yy Telefónica has rights to the first-pick match, Mediapro rights to the second-pick, and beIN to the remaining eight matches each week
2016-17 to 2018-19
yyIn the league’s first full cycle under collective selling, live rights are shared between pay-TV broadcaster beIN Sports, agency Mediapro and telcos Telefónica, Vodafone and Orange
yyLive rights to the 2015-16 season were acquired by Telefónica and public-service broadcaster TVE. Before this clubs sold their own media rights yyOther revenues come from highlights, and live rights to the Segunda División and Copa del Rey
Per-season domestic value
Italian Serie A
English Premier League
yyLaLiga takes a hybrid approach, selling its rights in conjunction with the Mediapro agency
yySerie A sold its international rights to the MP & Silva agency. Ligue 1 has sold its international rights to the beIN Media Group until 2024
yy The Premier League and Bundesliga both sell international rights in-house, and adopt a market-bymarket approach
yy The Premier League earns more from international sales than the other four leagues combined. In five territories, its rights are worth more than €100m per season
French Ligue 1
International revenue, 2016-17
Source: TV Sports Markets Rights Tracker 11
NEWS REVIEW TV SPORTS MARKETS PUBLISHES HUNDREDS OF MEDIA-RIGHTS FEES AND PAGES OF ANALYSIS EACH YEAR. WHAT FOLLOWS IS A SELECTION OF OUR BEST STORIES SINCE SPORTEL ASIA...
SEIFERT: NEW DEALS BOOST BUNDESLIGA 24 JUNE: LATEST DOMESTIC DEALS SOLIDIFY GERMAN LEAGUE’S PLACE AMONG THE BIG THREE CHRISTIAN SEIFERT, chief executive
of the German football league, told TV Sports Markets the Bundesliga’s latest domestic deals would entrench it as one of the world’s top three football leagues. Two weeks ago, the Deutsche Fußball Liga finalised domestic media-rights deals for the Bundesliga over four seasons, from 2017-18 to 2020-21, worth a total of €4.64bn ($5.23bn), an average of €1.16bn per season. The deals represent growth of 85 per cent on the current four-season cycle, from 2013-14 to 2016-17, worth just over €2.5bn in total, or €626.2m per season. Seifert said: “From the very beginning our goal was to achieve financial results that will enable the Bundesliga to be one of the top three leagues, money-wise. “Right now we are number two behind the Premier League [in terms of domestic rights revenue]. We want an interesting, entertaining national competition while allowing our top clubs to compete with other top clubs in Europe.” The introduction of a no-single-buyer rule by the Bundeskartellamt, the German competition authority, meant no single broadcaster could acquire live rights to all matches in the new cycle. Pay-television broadcaster Sky Deutschland shows all 306 matches per season live in the current cycle, in a deal worth an average of €485.7m per season. In the new cycle, Sky will show most live matches – 266 per season – after acquiring four of the five available live-rights packages to the top tier. It also retained the league’s most valuable package, C, for ‘conference’ rights. This gives Sky near-live highlights
coverage of all Saturday 3.30pm matches. It also acquired rights to all 306 matches per season from the second-tier Bundesliga 2. The no-single-buyer rule only applied to the top tier. Sky will pay an average of €876m per season for its rights – an increase of 80 per cent on its current contract – despite having 13 per cent fewer top-tier matches than it shows at present. Sports broadcaster Eurosport acquired the other package of live Bundesliga rights in a deal worth close to €85m per season. Its package A contains 45 matches per season, including relegation play-off matches and the Supercup competition. Seifert declined to comment on bidders, but said: “When you finish up with 85 per cent more you have seen aggressive competition all over the place.” CHANGES
As well as the no-single-buyer rule, there were several differences between this and the last Bundesliga auction. This time packages were sold sequentially, creating competitive tension between bidders. Losing bidders were not told who had been awarded rights. The conference rights were also sold as a separate package for the first time. Seifert said this was to encourage bidders who felt they could not acquire both conference rights and rights to the individual matches. He added that the league has to be “a bit more creative” as it has to make all 306 matches per season available live. The English Premier League doesn’t make all its matches available live, and can use the addition of new matches as leverage to increase domestic fees.
Rights were sold on a platform-neutral basis, provided the bidder could show rights on at least three out of five delivery mechanisms: terrestrial, satellite, cable, mobile or web. Broadcasters can also sublicense rights, with the league’s approval. PAY-TV CHALLENGE
Seifert described the German pay-television market as “very challenging”. “Germany is the biggest single market in Europe, but pay-TV still does not have the market position of other countries. There is a lot of potential though,” he said. Sky paid a 94-per-cent increase when the league’s last domestic rights deals were agreed in April 2012 – up from €250m per season to an average of €485.7m per season. Then, Sky had 3.012m subscribers. Today, it has 4.567m. Its average revenue per user is €35 per month. Sky Deutschland chief executive Carsten Schmidt told newspaper Handelsblatt that Sky’s objective over the next Bundesliga contract was to raise arpu. He said Sky is aiming to reach arpu of €40 per month, and this should be possible as the German economy is stronger than those of the UK and Italy, where Sky’s sister businesses operate. In the UK and Italy, Sky’s arpu is £47 (€53/$67) and €42 per month respectively. Sarah Simon, senior analyst at Berenberg Bank, told TV Sports Markets Sky had secured the best possible outcome from the tender. Simon said the new deal won’t see Sky add many subscribers – those who want to watch the Bundesliga generally already subscribe – but that retaining most live rights would limit subscriber losses.
QUESTIONS FOR NEW MP & SILVA OWNERS 27 MAY: TAKEOVER BY CHINESE INVESTORS CREATES PLATFORM FOR AGENCY TO CHALLENGE RIVALS THE TAKEOVER OF the MP & Silva agency
by Chinese investors Everbright Securities and Baofeng Technology will provide the agency with a platform for expansion to close the gap on its bigger rivals, WME/IMG and Wanda/ Infront. But the question being asked across the industry is: whose vision will be driving that growth? The management structure of the new company is yet to be finalised but it seems certain that the two founders and major shareholders, Riccardo Silva and Andrea Radrizzani, will remain at the helm of the company for at least five years. It had been widely expected that Radrizzani would sell his stake completely to focus on his Eleven Sports Network pay-television channels and other projects. However, it is understood that the new owners expect him to be fully involved in company strategy. As one senior executive from a rival agency put it this week: “What really matters is who the active leadership will be and how that will impact management. The new owners clearly value these two guys and will rely on them to know the underlying business. But how active will Riccardo be? How active will Andrea be? Who will call the shots?” ‘ONE-STOP SHOP’
The bedrock of MP & Silva’s business is likely to remain rights trading for the short to medium term, but the investment will gradually see the agency expand into other segments. MP & Silva has over 70 rightsholder clients and in 12 years has built
a business with turnover of over $600m (€531m) and ebitda of over $60m in the year to June 2015. Radrizzani told TV Sports Markets this week: “MP & Silva has only been focused on media rights, and is still the strongest in this. Now we will look to diversify. “IMG and Infront have offered an integrated service to the client – a wide range of services. We need to be innovative and different but to take the same route. The winning strategy is to integrate the business and become a one-stop shop for rightsholders.” He said the future for relationships with rights-holders lay in developing areas like data, analytics and customer relationship management which enables partners to fully realise the potential of their fan base. CHINA QUESTIONS
Baofeng describes itself as China’s biggest online video game-playing platform. Its stated intention is to build a “global online entertainment ecosystem with 100m daily active users”. Prior to last summer’s stock market crash in China this was a route to spectacular growth for technology companies. Baofeng itself enjoyed growth of 4200 per cent in less than two months when it launched an IPO in March last year, valuing it at over $5bn. Its sports division, Baofeng Sports, is expected – among other things – to move into the sports streaming market, where it will be in competition with LeSports, PPTV, Sina and Tencent. TV Sports Markets understands the company acquired non-exclusive live
Chinese Super League rights in China last month. In the medium and long term, having access to the huge portfolio of rights held by MP & Silva will be an advantage. The bulk of that portfolio is off limits for two years, due to a three-year agreement signed last July in which the agency sold its rights exclusively to LeSports. Not all of the portfolio is included, but the agency’s flagship properties, like Italy’s Serie A, are in the deal. LONG PROCESS
The sale process for MP & Silva began in 2014. It is understood a deal was close to completion for Radrizzani’s stake in November that year with Boston fund ABRY Partners, but after several months of talks the deal fell through. US sources cited complications during the due-diligence process. Sources close to the agency blamed differences about the valuation of the company. MP & Silva returned to the market with UBS as financial adviser and received 13 bids last September. These were narrowed down to a shortlist of four. The other three were from Chinese funds Hontai Oriental and Suning, and UK-based private equity group Permira. The agency identified Everbright/Baofeng by March and entered into completion talks. All four bids were very close in value. The Everbright/Baofeng bid was chosen as it offered the most effective route to growth through the combination of a state-backed fund and an industrial partner which was already strong in technology and entertainment.
IMG & TURNER PUSH ESPORTS ON TO TV 10 JUNE: ELEAGUE JOINT VENTURE BREAKS MOLD WITH FOCUS ON LINEAR BROADCAST DEALS THE IMG AGENCY has told TV Sports Markets the decision to embark on its ELeague joint venture with media conglomerate Turner “was not influenced by other esports companies and events”. Ben Nicholas, senior vice president, UK media and head of digital at IMG, said the agency was excited at the prospect of owning a league in order to “manage its authenticity and direction”. IMG is also responsible for sales outside markets in which Turner exploits the rights. Turner is handling the rights in Southeast Asia, the US and Latin America. It will either exploit the rights on its own commercial and pay-television channels, or sell on to broadcasters – as it has to pay-television broadcasters Sports Illustrated and Astro. It is thought the agency has earned between $1m (€890,000) and $1.5m in media-rights revenue for the inaugural 10-week ELeague tournament, which involves 12 teams. The tournament began on May 24 and will end on July 30. A second 10-week tournament will begin in October, with a new round of sales. The most lucrative deals are, in order: in China with esports streaming platform Huomao; in the Nordics with multiterritory commercial and pay-television broadcaster Modern Times Group; and perhaps most impressively – given its tough rights market – in Russia with esports streaming platform Starladder. These deals are all worth between $100,000 and $500,000. The remaining deals IMG has agreed range in value
between zero and $60,000. All broadcast deals are underpinned by a non-exclusive digital rights deal with videogame-streaming platform Twitch. Twitch is not paying a rights fee, but the platform will extensively market and promote the league to its more than 100m monthly users. LINEAR PRODUCT
In order to reach their target audience more effectively, rights to esports leagues have predominantly been exploited on specialist online esports platforms as opposed to linear broadcasters. But by selling rights to the latter, esports and television experts believe IMG and its broadcast partners can appeal to a different audience. With linear television viewership among young people in decline, broadcasters are keen to acquire programming that will lure back a younger demographic. By creating an esports league with 10 weeks of content – as opposed to the more traditional one-off tournaments held in South Korea and Japan – IMG has helped to create a property with greater long-term value. As one esports expert explained: “You can make better use of your production spend, promotion and marketing with a league. With a one-off tournament, all the promotion and marketing you’ve done is gone after two weeks.” The agency hopes positioning the ELeague on linear channels with high levels of penetration, alongside specialist platforms, will keep hardcore fans happy while also reaching a more traditional sports audience.
The ELeague’s current game of choice is first-person-shooter Counter Strike: Global Offensive, considered ideally suited to competition gameplay due to its high difficulty level. CS:GO was chosen for the inaugural ELeague season for two main reasons. First, the game’s genre and gameplay is more appealing to a western audience than esports standards like Starcraft 2 and League of Legends – complex real-time strategy games which are popular in China, South Korea and Japan, and require extensive gameplay experience to understand. Second, CS:GO is considered by IMG and Turner to be more attractive from a production standpoint, with less time needed to explain rules and player tendencies, and more emphasis on action. The agency has not ruled out expanding into other games in other genres, and will almost certainly have to do so in order to grow the ELeague’s brand in Asia. JOINT VENTURE
IMG’s contribution to the joint-venture is all value-in-kind. IMG Media – IMG’s London-based arm – is offering Turner the sales and esports expertise of Ben Nicholas; Oliver Boden (head of esports Europe and international sales; and Charlotte Moore (esports co-ordinator). It is also providing 12 of the 24 teams that make up the ELeague roster. Each season comprises a 12-team, 10-week tournament. Turner is responsible for all production costs and technical distribution.
Rights Tracker is a business intelligence tool from TV Sports Markets. The first of its kind, Rights Tracker is an interactive platform which allows clients to interrogate the TV Sports Markets deals database. Since 1997, TV Sports Markets has brought its clients unrivalled accuracy and insight into the trading of sports media rights through the pages of its fortnightly newsletter. Now Rights Tracker provides the most sophisticated service yet to help you with your media rights strategy. Rights Tracker enables you to find out: when media rights are available with our unique renewal timeline where properties are distributed around the world by different rights-holders and agencies, and which territories generate the most revenue what broadcasters and agencies have in their rights portfolios, what they paid for them and the relative importance of the rights to their strategies how historic trends might affect the value of rights in a particular market and much, much more Constantly updated by our new research analyst team, the platform also features analysis by the renowned TV Sports Markets team as well as up-to-date company financial and key market data.
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SPORTEL BRIEFING TWO DECADES OF TV VIEWING FOR PREMIUM PROPERTIES IN THE TOP FIVE EUROPEAN MARKETS 50,000 45,000 40,000
Uefa Champions League
35,000 Audience in 000s
Summer Olympic Games
Winter Olympic Games
Fifa World Cup
Uefa European Championship
Source: TV Sports Markets, SportBusiness Intelligence, BARB, Eurodata TV Worldwide/Mediametrie - Mediamat, Kantar Media Spain, Auditel/Nielsen Television Audience Measurement, AGF/GfK
MEGA EVENTS STILL MUST-WATCH
In association with
SPORTBUSINESS ANALYSTS MIKE KIERNAN, DAVID SVENSON & LUKAS ZAJANCAUSKAS, IN CONJUNCTION WITH EURODATA TV WORLDWIDE, REVIEW THE SUMMER’S SPORT VIEWING IN THE 2014 edition of this Briefing SportBusiness Intelligence illustrated that, despite an ever-changing television landscape, major sporting events continued to deliver strong audiences for free-to-air broadcasters in the big five European markets of France, Italy, Germany, Spain and the UK. This remains the case two years later as, despite fluctuations usually associated with time zone differences, the summer and winter Olympic Games, football’s Fifa World Cup and Uefa European Championships continue to deliver higher cumulative audiences than in 1996, the first year of this survey. In the cases of the Uefa Champions
League and FIA Formula One World Championship, the cumulative audience across the big five markets has declined since 1996 due to the impact of both properties moving either partly or entirely to pay-television in certain markets. MAJOR EVENTS IN 2016
As did 2014, the summer of 2016 featured two quadrennial mega-events, this time the Uefa European Championships and the summer Olympic Games. Cumulative average audiences fell for both events. Both had registered their highest total audiences (in this survey) in 2012.
The cumulative average audience for the European Championships – the first of the summer’s mega-events – was 40.3 million, a seven-per-cent decrease on the audience across the same markets in 2012, when it was 43.5 million, though it was higher than in 2008. The decline is in large part due to the increased number of matches – 51 in 2016 compared to 31 in 2012 – which meant that more matches were broadcast at unattractive times and featuring less well-known teams. This, alongside the poor performance of the English national team, led to an audience decrease of 18 per cent in the UK.
AVERAGE AUDIENCE & MOST-WATCHED MATCH/EVENT, EUROPEAN CHAMPIONSHIPS & RIO OLYMPIC GAMES, BIG FIVE MARKETS European Championships
Portugal v France - 20.84m
Day 16, incl men's boxing super-heavyweight final - 5.17m
Germany v France - 29.85m
Day 11, incl women's beach volleyball semi-final - 8.55m
Germany v Italy - 16.56m
Day 16, incl men's volleyball final - 2.87m
Croatia v Spain - 10.72m
Day 14, incl men's basketball semi-final - 1.89m
England v Iceland - 15.01m
Day 11, incl men's track cycling Keirin final - 8.58m
Source: TV Sports Markets, SportBusiness Intelligence, BARB, Eurodata TV Worldwide/Mediametrie - Mediamat, Kantar Media Spain, Auditel/Nielsen Television Audience Measurement, AGF/GfK
AUDIENCE DATA ANALYSIS CUMULATIVE VIEWING FOR THE UEFA EUROPEAN CHAMPIONSHIPS IN EUROPE’S BIG FIVE MARKETS
CUMULATIVE VIEWING FOR THE SUMMER OLYMPIC GAMES IN EUROPE’S BIG FIVE MARKETS
UK Spain Italy Germany France Source: TV Sports Markets, SportBusiness Intelligence, BARB, Eurodata TV Worldwide/Mediametrie - Mediamat, Kantar Media Spain, Auditel/Nielsen Television Audience Measurement, AGF/GfK
Audiences also decreased in Germany, but increased in France and Spain. The average audience remained relatively flat in Italy. The average audience for the Rio Olympics was always going to fall below the 2012
London Olympics, when the majority of the most popular events were broadcast in European primetime, rather than in the early hours, as many events did from Rio. But while the cumulative audience of
8.057 million was significantly lower than the 2012 cumulative average of 12.952 million in 2012, it was higher than the total of 7.585 million registered for the Beijing Games in 2008.
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3,500+ 10,000+ SPORTING EVENTS HOURS OF FOOTAGE A YEAR
1+ BI L L ION
HO U S E HOL DS R E A CH E D
70+ 36+ 40+ SPORTS SPORTS RIGHTS
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20/9/16 7:54 PM
SPORTEL BRIEFING leverage for me. Today, darts is my leverage. The thing that opened the door with Viasat [in the Nordics] was darts. And it’s beginning to grow quite a lot. The other interesting area is China. We have quite a big contract with CCTV on a whole range of products, but they are now buying more and more darts. The Chinese model of sports rights is breaking all the rules – it’s unbelievable. From China obviously all the Asian market opens up. There’s an awful lot of soft tip darts throughout Asia, and now the conversion of those players into what is considered to be the real thing, which is steel-tip darts, is underway. And I think that’s going to be another massive market.
BARRY HEARN Chairman Professional Darts Corporation
ON THE PDC’S MEDIA-RIGHTS STRATEGY AND KEY INTERNATIONAL DEALS
You said that the audience for darts is growing internationally – why? What type of sport appeals to the millennials? The sheer basics are: it has to be fast; it has to be entertaining; it has to be technically excellent and produce moments of quality; but it also has to produce characters that interact with the audience and make everyone feel they’re involved. Put those four together and the answer is darts. We’ve educated the world through the media – predominantly broadcast. We’ve shown broadcasters around the world, whether there’s darts interest or not, “look at this”. And they’ve been staggered by the audience, the energy in the room. And on the back of that, the perception of the sport has changed. Outside the UK darts is not a pub game necessarily, because either they don’t play or it’s played at home. There are no barriers to entry – it’s inexpensive to play. What was missing was the flagbearers, and the aspirational returns of massive prize money. We launched the World Series of Darts three years ago. We launched that really
as a flag-waver, just for people that have bought TV rights here, and we said we’d bring an event as part of the service. That’s now changed on the back of the television exposure. For example in Auckland last weekend, we had 16,000 customers – that was a standalone profitable business. My first year’s turnover for overseas sales 15 years ago was $40,000. This year it’ll be above $10m. That’s a reasonable increase and it seems to be gaining momentum. Where are you seeing that growth? Germany in particular. We’ve always had a strong relationship with Holland. It was really a Dutch v English sport. But six years ago we did our first European Tour event in Germany and we sold 50 tickets; it was embarrassing. We did get another 50 walk in on the night but it was still embarrassing. Today we have 10 or 11 events in Germany, they’re all sold out straightaway and there are 3,000 to 5,000 people a night. Holland continues to amaze. Japan was a small darts customer looking like getting bigger, and Perform came in and said we want to buy your whole catalogue. In the early days snooker was big
Is there a particular strategy you pursue in selling darts internationally? We focus on the four predominant areas of any sport. Most importantly, the domestic broadcaster. Second is ticket sales, then sponsorship, and fourth is global syndication. That’s basically the four areas we’ve always worked on. We’ve established new markets through investment in markets we thought had potential. I’m not saying we got them all right but we’ve a pretty high percentage. What I tend to do is spend an awful lot of time looking at the map of the world, and colouring things in like a kid’s colouring book. Matchroom as a company has grown a lot over the last few years, creating about 1,000 hours of original programming, about half of which is darts… what you do is first look and see if there is local interest in anything you do. So that’s essential. And pricing is too, because it’s so much easier for me to do output deals. One-stop shopping is great. Why have you split your rights in the UK between three broadcasters, rather than selling exclusively to one? No particular reason. It was more of a timing issue or a creation issue. But it’s a very good plan to keep everyone on the edge of their chair, if it’s successful. At the moment, ITV are disappointed they’re not the only free-to-air customer. That’s good – keeps ITV on their toes. Sky can’t understand why they don’t own everything. And of course hovering out there, though I’ve had no conversations – though you never say never in business – is BT.
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TV Sports Markets speaks to hundreds of the most important decisionmakers in sports media every year. We publish the full interviews on our website for subscribers to get an in-depth insight into their companies’ strategies. These are just two examples of interviews we have had in recent months. The full archive is available on our website.
ON THE ACQUISITION OF J-LEAGUE RIGHTS FOR 10 YEARS, 2017 TO 2026
Why have you acquired this property? The main driver is the launching of the new platform [DAZN] in August. We wanted to make sure we had as strong a portfolio as we could. And it’s a quality product on a longterm deal. Compared to domestic rights for other major sports around the world we think it represents great value. At the moment sports fans [in Japan] aren’t getting a great service or a great deal. Was your bidding for this property affected by losing out on English Premier League rights to SoftBank? In terms of international football we did a lot of research on international leagues and we acquired Serie A and the Bundesliga a year ago; they’ll be exclusive on DAZN from the summer. Those two rate ahead of the Premier League due to the number of Japanese players in the leagues. We’ve managed to buy some domestic baseball; we’ve got domestic volleyball rights. We started working on the domestic front after the international portfolio was completed. Soccer is going to be the focus of the service, along with some baseball. Of course we’d love every soccer league on there, but we felt we have the best two and didn’t want to spend any more on international rights. How did the deal get done? We started in the Japanese market summer/ autumn 2015. We started speaking to domestic rights-holders towards the end of that year so they knew what we were doing. The league ran a formal process in the
SIMON DENYER spring of this year. After that process they chose to move forward into a negotiation with us. Did the tender specify what a new deal would cover? The bidding process certainly provided us with an overview of the available rights and said they wanted as many matches as possible [to be broadcast]. The big difference an OTT service can offer is obviously we have no channel restrictions. I can’t think of any other country where a broadcaster has, as we are going to, shown every game from all the top three divisions. I think that was a big distinction. Why did you agree a 10-year deal? We are building a new platform, so in any rights deal we are looking as long-term as possible, because inevitably we will lose money in the early years and we need to be sure we have a long-enough term to make it back. We’re also investing quite a lot in infrastructure: on top of the rights fee there’s an investment in production, and we’ve got a partnership with [telco] NTT to wire up all the J1 stadia with wi-fi. SoftBank bid against you for these rights. Is it a direct competitor to DAZN? I think there are some similarities and some
Chief Executive Perform Group
differences. They plan, and have started rolling out, a mobile sports-streaming service. Which is good, because we want people like that, like Netflix etcetera to help people get used to this model. So they have acquired some rights which are mainly for mobile and streaming to their existing customers. The big difference for our service is that it’s available to all consumers and our main delivery method is television. Our app will be available on all the major Japanese smart TV brands, on games consoles, and Chromecast/ Firestick etcetera. How will you manage production on this scale? The J-League manages a lot of the production already. We will provide extra resources to the quite big team already there. We’ll be greatly scaling up the team for the next six to seven months. Sometimes it’s as easy to manage that number of events as it is just one league, because you still have to do all the logistics. We won’t be starting from scratch, but we’ll be bringing a lot of expertise from around the world. And we’ve already set up a major new office in Tokyo with production infrastructure because we were launching. Even before the J-League announcement we were already going to be showing 10,000 events per year on DAZN.
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THE TOP 10 DEALS THE MOST VALUABLE SPORTS RIGHTS DEALS SIGNED OFF SINCE SPORTEL ASIA 2016 *Exchange rates at deal announcement
CBS & TURNER RENEW ‘MARCH MADNESS’
SKY DEUTSCHLAND BUYS BULK OF BUNDESLIGA LIVE RIGHTS
PERFORM STRIKES J-LEAGUE DEAL
SKY SPORTS TAKES F1 TO UK PAY-TV
BUNDESLIGA HIGHLIGHTS BOUGHT BY ARD
RTL WINS GERMAN NATIONAL TEAM RIGHTS
EUROSPORT WINS BUNDESLIGA LIVE RIGHTS PACKAGE
CANAL PLUS RENEWS TOP 14
OTHER BUNDESLIGA HIGHLIGHTS TO ZDF
UPC & SRG BUY SWISS ICE HOCKEY LEAGUE
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