Could The Decline in Ticketed Events be a Win for Fans?
As live sport has begun to trickle back into our daily lives, there has been a collective sigh of relief and an acknowledgement of how much we missed it. The drama, the joy, the agony. It’s all therapeutic in it’s own strange way. It represents more than 22 men kicking a ball around a field of grass. It’s a form of palliative care for a terminally addicted strain of our society.
Although the Premier League has returned with a flourish, the absence of fans has made it a very different viewing experience, especially if you are brave enough to watch without the artificial crowd noise that is pumped into the broadcast. The spectators add so much to any sporting event as the players on the pitch respond to the energy of the crowd willing them on, or baying for their blood.
However, it is more than the atmosphere that the fans provide. Commercial revenues of rights owners have been decimated by the absence of gate revenue. The FA, for example, are forecasting potential financial losses of up to £300m, as well as making 124 jobs redundant. The RFU is staring down the barrel of £107m in lost revenues and is projecting a four-to-five year recovery with cumulative revenue reductions of around 20%. The list goes on and on.
Rights owners have long since been over-reliant on gate revenue as a primary source of income and why not? Who could have predicted that a global pandemic would swoop in from the East and deprive of them of a core revenue driver? At the turn of the year, a world without fans at sporting events would have seemed utterly unthinkable. Yet, here we are.
Although there is hope on the horizon and events are now returning at a pace, that doesn’t equate to bums on seats. Even if we begin to see partially decorated stadiums before the end of the year, that merely places a plaster on a gaping wound. Sparse crowds are a help but by no means resolve the wider commercial issues.
Therefore rights owners need to mobilise to create new revenue streams or accelerate those that were planned for further down the track. And what is the one thing that rights owners can provide that fans crave more than anything else? Access.
This can take many forms but we have already seen the trend of streaming services paying top dollar for behind-the-scenes documentaries. Man City, Spurs, Sunderland and Leeds are among the English football clubs to let the cameras in and the fans have responded in kind. In the modern era, match footage and highlights have become ubiquitous, but an insight into Pep Guardiola mania on the training pitch, or Jose Mourinho’s first Spurs team meeting - that is a rarity that we value.
Yet modern technology means that we don’t need an intermediary like Netflix or Amazon to take us inside the ropes. The OTT or Direct to Consumer model has been an emerging area for some time amongst rights holders but it feels like we are entering the next iteration of that product.
There has been a shift from incremental content you can access on your favourite team’s website to a paid service which brings you closer to the team you love. Liverpool are often heralded as the poster boy of this model with a strong start to their paid offering on YouTube, which offers fans enhanced video packages and ‘non-traditional’ content.
How long before we see more teams or federations follow this path? Up until now, they have had the buffer of gate revenue and have potentially resisted access on a macro scale out of respect for privacy of the process. However, how valuable is a camera crew in a dressing room, on the training pitch, in a key team meeting or on the team bus? We would argue: very. Any rugby fans and viewers of the original Living With The Lions documentary would vouch for this.
With the shackles now off and a need for a new revenue stream, we would expect to see more and more rights owners offering this type of premium content as a paid service. The industry was heading in that general direction as it were, but it has just taken an unexpectedly sharp turn. The big beneficiaries here are the fans, who can consume this highly valued content at a reasonable price.
Of course, not all teams have the commercial wherewithal to invest in producing access content, particularly in the current climate. Smaller teams/clubs and franchises will likely look to monetise their own archive assets, which hold their own value.
Beyond content, technology has offered much deeper revenue opportunities for the prestige players in the sports arena. Incredibly, Barcelona were able to generate $1.3m in less than two hours from sales of $BAR tokens - a virtual club currency powered by blockchain fintech provider Chiliz. The fan tokens will enable purchasers to
‘…vote in club-specific polls to be in with the chance of winning digital and real-life rewards, such as VIP experiences. The first Barca poll using $BAR will let supporters decide on a piece of fan-designed artwork to go inside the home dressing room at the Camp Nou stadium.’
Although a totally different and complementary concept to their Barca TV+ offering, the proposition remains broadly the same: offer fans a paid solution for increased access and premium privileges.
To conclude, we are entering an age where teams, leagues and federations will more aggressively look to monetise their internal assets, leveraging the power of their brand, to plug the gaping hole of gate revenue. Access and content look to be the weapons of choice. The fans may never look back.
At Fifty-Three Six we specialise in converting fans into customers, whatever form that may take. We have built out bespoke Direct to Consumer models, leaning on our production and digital acquisition experience. If you’d like to chat, please get in touch below!
