Sky stalwart Barney Francis is talking about the importance of sport’s digital footfall during times of austerity and why clubs must act if they are to offset lost matchday revenues.
Early on in an interview with SportsPro, he cites a recent forecast for the 2020/21 Premier League season, which predicts that clubs in English soccer’s top division could lose in the region of UK£350 million (US$463 million) if fans are unable to return to matches during the coming campaign.
Acknowledging the damage caused by the coronavirus pandemic, he says that how they choose to adopt direct-to-consumer (DTC) media will inevitably determine the health of club finances when the dust finally settles.
“Even before lockdown – and bearing in mind ‘sport’ is too big to generalise this way – sport’s biggest concern was the rate of growth; the rate of growth of broadcast revenues, additional commercial revenues, fanbases, and all these sorts of things,” Francis says.
“There was always going to be a levelling-off point, maybe even a dip, to find a new way to drive additional revenue. Projecting ahead, the value of sport will continue to increase but it will have bumps in the road – it is bound to. The way to get out of those bumps is for companies to find new ways to indulge the passion of sports fans.”
It is closing in on 20 years since Francis joined Sky as an executive producer at the turn of the century. As he prepares to move on from the pay-TV broadcaster, the former Sky Sports managing director is also turning his focus to the digital space, just as the industry is doing the same.
Socially distanced fans watch Brighton and Hove Albion take on Chelsea during a pre-season friendly at the Amex Stadium
Last week, Francis joined the board at London-based performance marketing agency WePlay in an advisory capacity. As part of that role, he says he is looking to draw from his experience purchasing the rights to sports that Sky’s audiences enjoy the most in order to help properties, many of which he previously negotiated with, better understand their digital audiences.
“This is not the only industry where people move from the buy side to the sell side,” Francis continues. “I like to think that, while Sky are a hugely professional organisation – and if we also take Amazon as an example – as with any successful business, they invest in things giving huge thought to customer appetite that’s going to generate revenue and is going to allow them to continue investing.
“I used to have heads of sports coming in and telling me, ‘You don’t like my sport, that’s why you’re not buying the rights’.
“I would say that it doesn’t matter what sport I like, I have to have an understanding of what customers want and, if customers want something, then we will always do an analysis to see whether the economics work. It doesn’t matter what I like. If it had been my view, Aston Villa would have been on every Sunday at 4pm. But that would have been a poor way to run a business.
“Jumping from one side of big business to small business, or from buy side to sell side; if you work on either side of the business, and you don’t look at the other, then you are disrespecting the industry and you are not going to be successful.”
The China situation is fascinating. The Premier League will be challenged, not only by ripping up an overseas rights contract, but whether they can now go OTT in China.
Barney Francis, WePlay advisory board
While fans can’t attend games for now, Francis insists that the teams that will come out on top in the aftermath of Covid-19 will be those who try to recoup some of their lost matchday revenues by finding alternative ways to monetise fans.
“Don’t assume that [the user’s] enthusiasm for the product translates into buys,” he continues. “You’ve got to have buys because you don’t have a business there. Big business often thinks, firstly, what does the customer like.
“What I’ve learnt in recent years is that, if you just bought the rights and plonked them on the telly, you are not monetising them correctly. I think what Chelsea are doing [by monetising] their new fans training app, for example, is brilliant because the challenge facing Premier League clubs is that, when you sign a player, you may also buy his image rights, but you are not buying much exclusivity from them.
“If you look at Lionel Messi, he will have a contractual obligation to provide content to Barcelona, but also for Adidas, and then his other personal deals such as Otro. Then there’s also Barcelona’s relationship with Dugout, of which I believe they are a shareholder and have to provide original content, so of course the one person they want original content from is Messi.
“When you sign a player now, you are signing a content creator that is going to have to create a lot of content for a lot of people. So, considering Chelsea and their app that has a catchall around how they train, that is going to be really appealing the Chelsea season-ticket holder and fanbase.”
Manchester United fans in Shanghai show their support during the 2019 International Champions Cup
All eyes on China
Francis also comments on how digital adoption is shaping the current rights market, including what he sees as an option for the Premier League to launch and test its very own over-the-top (OTT) service in China, following the recent termination of the league’s contract with its former Chinese rights partner PPTV.
While China remains a lucrative market for the Premier League and its teams, the collapse of that deal, coupled with recent political tensions between the UK and Beijing, has left the league in a predicament. Days out from the 2020/21 season start on 12th September, chief executive Richard Masters said that the competition is “taking steps” to get its games back on Chinese television, but a satisfactory resolution is by no means guaranteed.
With Chinese fans desperate to see their team in action, Francis says he is eager to see how the Premier League reacts next. Whether the organisation will find a new deal in a country that garners US$700 million per rights cycle remains to be seen, but it could also look to go it alone by finally building out its long-mooted OTT streaming service.
“The China situation is fascinating,” Francis continues. “It does cross over into geo-politics. However, what won’t have changed is the amount of football fans in China who want to watch [clubs like] Manchester United.
“I don’t quite know the answer that the Premier League will have … but I do know that they will be challenged, not only by the ripping up of an overseas rights contract, but whether they can now go OTT in China.
“It’s no longer bound by the same rules as the rest of the world. I don’t know what the answer is but the one key thing is that [Premier League] fans still exist in China and they will still want to find a way to watch the games.
“It [depends on] whether international and state politics intervene and deny them that, which the Premier League will of course be hoping is not the case. They will have an answer to it.”
Former Manchester United captain and Sky Sports pundit Roy Keane
Speaking ahead of the Premier League’s return last weekend, Francis is also expecting a fruitful month for the league’s broadcasts in its home market. With matches being played behind closed doors, the Premier League has made the decision to make all 28 fixtures in September available to watch via its domestic broadcast partners.
Francis says the move appears to be an olive branch to club season ticket holders shut out from matches, though he does not foresee it causing a long-term shift to the current rights model. Some clubs had requested the opportunity to live stream non-televised fixtures themselves to help boost revenues in the absence of fans, but Francis says every club will also be cautious not to dilute the value of existing broadcast deals.
“Even more so now, every sport, club and federation needs to know its revenue for the year ahead,” he says. “If a sport just went to OTT but had a transfer window amongst its 20 teams right now and didn’t know what its revenues were for the year, how on earth are you going to reinforce your squad or build a new training ground or enhance your stadium?
“What you can’t do is change that [to allow clubs to stream games] mid-term because the contracts were sold on the basis of a tender. That’s why September is so fascinating but the idea that a club can also go direct to their fans – despite what Sky, BT and Amazon have paid for live rights – would rip up the value that these media companies have spent on it.
“Going forward, I still maintain that in any sport anywhere around the world, they are still going to know what their income is and, if you just go pure OTT, driven by the clubs themselves, and only transactional, no one will know what the revenue streams are going to be.”