Anyone familiar with the art of reading tarot cards – and by familiar, I mean you have heard a fortune teller deliver at least two lines of dialogue in any motion picture – will know that Death does not often mean death, but change.
Yousef Al-Obaidly, chief executive since last November of Qatar-based BeIN Media Group, may not be inclined towards such a generous interpretation.
“I’m here to tell you how the endless growth of sports rights is over,” he said, speaking at the Leaders Sport Business Summit at London’s Twickenham Stadium last week. “Not only that, but in certain cases, rights values are going to drop off a cliff, and the very economic model of our industry is going to be rewritten.
“Any rights holders who think that the technology companies of the West Coast are their financial saviours are going to be swiftly disappointed.”
Al-Obaidly and his employers have special cause to bash this message over the head of the people they buy live sports rights from, of course. For the past couple of years, BeIN’s feed has been plundered by Saudi-based pirate operation BeoutQ. Demands for support from rights holders have grown more urgent by the month, and a series of partnerships have come under review.
“If you don’t get your house in order and quickly, the sports rights market will disintegrate beyond recognition,” Al-Obaidly warned. “In fact, winter is already here.”
Yet while that argument has some substance, and the weather’s been pretty dire lately, that might be a minor overstatement. Change is definitely coming to the sports rights market, and profound challenges as well, but an outright freeze could well be avoided.
According to a new study being released this week by the data-driven sports marketing agency Two Circles, the proportion of sports content watched live by fans will drop from its current 55 per cent to 53 per cent by 2024. In spite of that, live rights sales account for 86 per cent of the market.
Things, as you might infer, will not stay that way, although Two Circles projects a correction rather than a collapse of overall sports media revenues. Its research suggests that worldwide annual income as a whole will swell from US$48.2 billion in 2019 to US$60.9 billion in 2024 – a five-year growth rate of 29 per cent that is more modest than others have prophesied.
But the balance of what’s sold may start to shift considerably. Live rights sales could hit an estimated US$49.1 billion in 2024, growing 18.7 per cent. Meanwhile, Two Circles projects a 76 per cent rise in the value of in-play ‘near live’ clip rights to US$1.7 billion and a 101 per cent rise in the value of short-form highlights rights to US$3.2 billion.
Those numbers are based on the input of 100 different global rights holders and what Two Circles chief executive Gareth Balch describes as “the largest pool of sport fan data in the world”, cross-checked with the wealth of media-buying information held by parent agency WPP. All these findings come with Balch’s caveat that “anyone who says they know exactly what’s going to happen is a little bit deluded”, but few could argue that they don’t correspond to what we understand, even on an anecdotal level, about changes in how people watch what they watch.
If those estimates are roundly accurate, then live rights would still very much be the economic lifeblood of elite sport but the role played by other formats would become more prominent.
“It’s live sport and…,” Balch says, speaking to SportsPro earlier this week. “Live sport and short-form near-live. Live sport and long-form post-live. Live sport and archive, long or short-form, gamified or non-gamified. It’s additive, in our experience.”
The most straightforward implications of this are financial. Two Circles’ own collateral around the launch of these figures points to the recent US$100 million, four-year digital clips rights deal between the International Cricket Council (ICC) and Facebook, which made a US$600 million bid in 2017 for live digital rights to the Indian Premier League (IPL) for five years.
The nascent over-the-top (OTT) sector is also creating opportunities – DAZN secured live in-play cut-in rights to Major League Baseball (MLB) games last year to serve notice of its long-term plans for a premium multi-sport offering in the US – while the motivations behind short-form clip buys are proliferating further and further. Last month, bookmaking group Tabcorp picked up the Australian rights to the NFL’s RedZone in-play highlights programme as part of a multi-year betting partnership.
For rights holders, a growing appetite for on-demand video might be converted into more powerful connections with new fans. The kind of behavioural datasets that Two Circles is working from, Balch notes, have made it possible to understand the path prospective followers take from “ignition all the way to avidity” in more detail than ever before.
“What you realise,” he says, “is that all those interactions with all those different formats of media are additive to help people build up to have the anticipation and the dedication to commit to watching live sport.”
Other possibilities present themselves as well. The prevailing tastes of live TV audiences have inspired shorter, punchier formats – the player draft for the Hundred is on Sunday, folks – but Balch is confident that longer-form events are “more likely to be consumed and thrive” if they can build a strategy that capitalises on the “latent demand” for different kinds of sports media.
There will be greater complexity in how rights are packaged, with exclusivity less significant and for some rights holders less desirable in the clips market. Than in turn incentivises a more creative approach to how video content is produced and a more holistic view of the importance of its many forms, from live coverage to highlights, original programming and – as suggested recently in a latte-frothed weekly column not far from here – archive footage.
Unlocking the commercial potential of non-live video would also give rights holders a way of emulating the most successful companies in entertainment media. Speaking on the SportsPro Podcast a few weeks back, Lucien Boyer – founder of Global Sports Week, former president of Havas Sports and Entertainment and former chief marketing officer of Vivendi – noted that while the likes of Disney had become ever more sophisticated in “creating a universe around IP” in the digital media environment, sport was still dependent on “the excitement of live and performance”.
Were rights holders to have stronger impetus to tell stories in different ways, that could change. If nothing else, you could expect more wholly owned media events like Eliud Kipchoge’s two-hour marathon moonshot in Vienna last Saturday.
A thriving market for non-exclusive, non-live rights could also open up space for aggregated services, making Boyer’s related call for a “Spotify for sports” more viable. Balch predicts that aggregating rights will only become more lucrative for buyers in the next few years.
It all makes for interesting times in the sports industry, for dispassionate observers at least. Ultimately, Balch suggests, reading the expectations of audiences, the prospects of rights holders and the intentions of established and incoming media companies is an exercise in “trying to retrofit” a fresh set of conditions “over an existing world”.
“We’ll still sell media rights,” he adds. “But the way we’re going to sell media rights is going to change in the most radical way since it was first imagined in the middle of the last century.”