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Dec 03, 2015

News

Insights from the Sport Business Summit 2015 NY

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Digital, Growth, Sponsorship
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by Tomas Robertsson, Commercial Director, North America at deltatre

The growth of Leaders has been very impressive. The people at deltatre have particularly enjoyed watching the organization grow from a small start-up that started out renting space at deltatre’s Wimbledon offices to become an established thought-leader in the sports industry, not only in Europe, but also more recently in the US.

The second edition of the NYC Sport Business Summit was no exception. Building on the success of last year, the Summit not only enjoyed a significantly higher attendance, but also managed to improve upon last year’s outstanding agenda.

Interestingly enough, a lot of the CES themes were reinforced at the conference:

  • Drone-based production – FOX Sports are already working to integrate drones into their broadcast coverage. It doesn’t come without challenges as you need both an experienced pilot and cameraman, but the end results are incredible. Shots previously unattainable now become reality.
  • Virtual Reality – bringing the in-venue experience to the home is very close. It seems VR will become a significant part of our lives in the very near future.

The virtuous cycle of the sport industry

Another very interesting theme is the enormous brand value of sports and how all the actors in the industry ecosystem need each other to fully attain and exploit the value.

A league or a team on their own can only realize a fraction of the overall value of their brand. But with broadcast partners and sponsors, they can realize a value that is far greater than the sum of its parts. This is a virtuous cycle that keeps the sports industry very healthy because the league/team, broadcaster and sponsor interaction is win-win-win.

For example, Arsenal is dependent on NBC and Puma to acquire, maintain and engage fans. NBC is dependent on the brand value of Arsenal (and ultimately the Premier League) to acquire viewers and therefore revenue. And Puma needs Arsenal and its players to be relevant and create a new generation of customers.

The same can be said for almost every other relationship within the industry. Sport is one of the few things that breaks every barrier and gives a unified identity to people irrespective of culture, religion or language.

Soccer and USA

Another interesting phenomenon is the growth of soccer in the USA. The difference from 15 years ago is extraordinary. The World Cup has played a significant part, as has changing demographics, but the growth is undeniable.

When Real Madrid and Man United played a friendly in Detroit, almost 110,000 people attended the match. 25 million people watched USA v Portugal at the 2014 FIFA World Cup. Sure, that’s less than 25% of the number that watched the Super Bowl, but is more than watched the NBA finals (average 15.5m) and the World Series (average 14.9m).

Univision attracted on average more than 800,000 people for Liga MX. NBC attracted a little more than half of that for the Premier League. MLS, the domestic competition, attracted on average 300,000 on ESPN. These figures do, of course, not compete with the major US sports, but it shows the appeal is growing. Some predict the Premier League rights will triple in value in the next cycle.

The globalization of sports properties

Finally, there is a clear trend towards globalization of sports properties. While in the past sports tended to be regional, thanks to the rapid evolution of technology, sports properties now know no boundaries because their fans don’t. Liverpool had over a 100,000 people attend a friendly in Melbourne, Australia, even though it that was the FIRST time the club ever set foot on the continent.

NBA has a huge following in China and the NFL plays regular season games in London.

This drive for global expansion presents unique challenges, but also significant opportunities. Soccer and basketball have a unique advantage because they are global sports, whereas NFL and MLB need to address the grassroots level because participation is low outside the US. Regardless, almost all major sports properties see their major expansion opportunity to be global rather than local.

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