Transformations Changing the Game for Sports Fans & Brands | Industry Insights | All MKC Content | ANA

Transformations Changing the Game for Sports Fans & Brands

Share        

Like most industries, the pandemic accelerated unforeseen consumer trends in sports that have opened up a realm of new opportunities for leagues, teams, and athletes. Legal and regulatory advances have placed sports in an optimal, yet disruptive position that will impact consumers, media companies, and other brands who participate in the business of sports.

The sports audience is extremely valuable and increasingly mobile, and as the industry races to beat the buzzer to keep up with the changing consumer landscape, brands need to be prepared to change with them.

Mobile sports wagering drives engagement.

In 2018, the Supreme Court opened the floodgates for legal gambling across the United States, with the repeal of PASPA opening up a new revenue stream and providing a way to engage a different audience for the business of sports. Mobile sports wagering is now legal in 36 states and slated to be adopted in three more by the end of the year.

Sportsbooks spend, on average, $400 to acquire and engage a user. The financial incentives for the leagues and their media partners are obvious, but the real accelerant is the resulting newfound interest in sports content, driving viewership and engagement on social media, online video, and streaming.

Revised NIL (name, image likeness) standards fuel monetization.

Historically, college athletes were not compensated for their participation in college athletics. In spite of the NCAA profiting $850 million on the names, image and likeness of athletes through March Madness in 2021, athletes were prohibited from receiving compensation while enrolled in a NCAA Division I or II institution.

In 2021, former West Virginia college athlete Shawne Alston sued the NCAA and the Supreme Court ruled unanimously that limiting consideration to "education-related benefits" was an antitrust violation and that college athletes should be able to pursue compensation for their name, image and likeness.

Since that time, each state and university has adopted NIL standards that permit college athletes to pursue sponsorships and monetization while maintaining eligibility as an amateur college athlete. These new standards also give brands and media companies a new group of influencers to endorse products and star in content, helping them better engage with and reach college sports fans.

Sports are fans cutting cords.

Following the pandemic, streaming emerged as a competitive and disruptive force in the world of sports. Sports has long been regarded as the last bastion propping up paid cable television in the United States. Long-term regional sports network rights agreements made it difficult for sports fans to "cut the cord," but that is changing quickly.

Diamond Sports, an affiliate of Sinclair Broadcasting, who owns the regional sports network (RSN) rights for MLB, NBA, and NHL following the $9.6 billion acquisition from Fox Sports in 2019, recently filed for bankruptcy protection as audiences and ad revenue are unable to keep pace with their rights fees.

RSN rights fees are the lifeblood of teams across the MLB, MLS, NBA, and NHL, who are slowly being pushed to find alternative direct to consumer media packaging to replace this shrinking revenue stream. Most recently, Warner Bros. Discovery, the owner of AT&T Sportsnet, announced that it will halt participation in the RSN business, in part due to the increasing rates of cord cutting, leaving MLB teams such as the Pirates, Astros, and Rockies to quickly scramble to find alternatives to fill a massive revenue stream.

This comes at a time when new streaming media entrants, Amazon (NFL Thursday Night Football), Apple (MLS & MLB), Peacock (Premier League, MLB), YouTube TV (Sunday NFL Ticket) are upping the ante with traditional media companies for these rights as they push to accelerate the adoption of streaming services as an alternative to traditional paid television.

Brands must adapt in the age of streaming.

Brands and agencies rely on sports to reach and engage a key and valuable consumer segment. A survey by GlobalWebIndex found that nearly 80 percent of women surveyed watch live sports online or in person, following closely behind the 90 percent of males surveyed who said the same. Broadcast television and radio have provided these audiences packaged up at scale for brands over the last 50 years.

As audiences are increasingly mobile, athletes and tangential content creators are building new ways to engage with their audiences through video, and more premium sports content is moving exclusively to streaming, brands need to adapt to scale.

Brands must also be on the lookout for trends in viewers' favorite teams and sports segments; for instance the growing interest in women's basketball provided agile brands with new opportunities to engage consumers during March Madness this year.

As the entertainment of sports evolves with sports wagering and amateur athlete content proliferating traditional and streaming video and audio, brands need to rethink their guardrails. What are the limits when being associated with gambling? Though it's legal in many states, there are negative associations that don't align to many brand standards. Like NIL amateur sports content, brands need to ask themselves how they will monitor the content of young athletes, who are capable of posting inappropriate social content that could potentially harm their brand.

Shift to online video and streaming.

The NFL has consistently been the highest rated programming on television. According to Nielsen, the top six highest-rated programs this January were NFL playoff games. As more of this audience moves to streaming, and especially in the months from February to September without the NFL, marketers will need to supplement their investments beyond TV into online video and streaming to keep pace with sports fan engagement and content consumption.

Though sports rights are quickly moving to streaming, most of the engaged content is tangential to live games. Pre-game and post-game commentary, wagering and fantasy sports content, entertainment, gossip, weather, and news are all examples of content that sports fans engage with and rely on that fall outside of the games themselves. These are great opportunities for brands to engage with sports fans efficiently and can be targeted contextually in streaming and online video/audio.

The sports audience is a valuable one with brands, but as the target audience moves, brands need to be prepared to move with them.


The views and opinions expressed are solely those of the contributor and do not necessarily reflect the official position of the ANA or imply endorsement from the ANA.



Mike Caprio is the SVP/GM of the Americas for Connatix.

Share