The typical soccer fan does not, apparently, follow a single club team, but an average of 4.6 around the world.
That nugget of insight, which speaks more to remote interest than the traditional investment of the weekly match-goer, was one of the inspirations for Dugout, a digital video producer and network that operates on behalf of 77 clubs internationally. Nine of those teams have an equity stake in the company.
Since its launch in 2016, Dugout has produced 18,000 short and longer-form videos for viewing across digital platforms. It currently creates 250 per week, operating in dozens of markets around the world. Earlier this year it acquired BallBall to establish a presence in south-east Asia while launches are planned in North America and China for the fourth quarter of 2018, with a South American rollout expected in the opening months of next year.
The majority of the work Dugout produces is around out-of-game footage, following teams through training, tours and transfers.
“50 per cent now, we estimate, of sports content is nothing to do with the game itself,” says Dugout executive chairman Elliot Richardson (left). “So that’s what we do, that was the spot we found and, thank goodness, it’s growing. And if you hear some of the themes here, I strongly believe that 90-minute games will get cut into pieces and sold in increments by the new people that are playing in it – because they’ve seen the data the same as us and they’ve got more than we have.
“The two years’ work we did before we launched was that customer analysis, saying: ‘Where’s the gap?’ And the gap was there. Probably, at that time, five or six years ago, it was only about ten or 15 per cent of the market. Now it’s exploding – so we got a little bit lucky as well.”
Richardson is speaking at the first Dugout Commercial and Content Symposium in London, held at the end of June. It brought together representatives from a number of partner clubs – including Uefa Champions League winners Real Madrid, Premier League sides Arsenal and Crystal Palace, and French champions Paris Saint-Germain – with agency collaborators and the media.
Together, they sketched a picture not only of Dugout’s intentions but of what it might take for soccer clubs to thrive in a changing media ecosystem.
The opportunity for clubs: a value shift from broadcast rights to content
Telecoms investor David McCourt (below, right) set the tone at the symposium with his keynote address, laying out a succession of developing market conditions to which soccer clubs must respond.
There is a broadcast revenue model emerging, he warned, which cannot hold. Not long ago, pay-TV companies bought premium sports rights and made a direct profit selling them on to viewers. Now those rights are increasingly picked up by other kinds of companies to deliver benefits elsewhere – by telcos selling mobile data packages, for example, or digital media companies seeking a bigger pool of user information. In some cases, those rights operate almost as loss leaders. Once they serve their purpose, their value to those companies will inevitably decline.
At the same time, wider patterns of viewer behaviour will put the value of TV rights under further pressure. Centennials – those born after the year 2000 – will soon enter the workplace and, McCourt noted, they are a generation completely unused to the idea of paying for TV bundles. Meanwhile, viewership of traditional and live TV is declining at a rate that is more or less consistent with rising engagement on social media.
Increasingly, of course, soccer clubs are taking it upon themselves to create original content for fans on those social platforms. McCourt sees the next great opportunity for those clubs in developing granular data about those fans that will be of greater value to partners. An understanding of behavioural and psychographic data, he noted, will drive the future of media performance and soccer clubs, if they can pool their resources, have access to what he calls “the biggest group of like-minded people” acting together at any one time.
If clubs can find a way of harnessing this effectively, McCourt believes they will be able to take a chunk out of a media agency market he values at US$330 billion.
50 per cent now, we estimate, of sports content is nothing to do with the game itself. So that’s what we do, that was the spot we found and, thank goodness, it’s growing.
Nevertheless, Dugout also sees an opportunity here for clubs to drive value back to their TV partners. The company is not intent on pursuing any live rights itself but is working with broadcasters to create what is effectively shoulder-programming content around coverage of a live game.
“We give the broadcasters who have the rights something extra; everything around the game,” says Dugout president Matthew Baxter. “We’ve got something all these guys haven’t to supplement their journey and what they want to do. If you’re thinking about a game at three o’clock on a Saturday, then week to week, what are you going to do? You’ve got to fill that void with a great load of content. So that’s where we can help and work alongside them in a very good collaboration.”
As Richardson notes, fans are spending less time than ever watching the build-up to games on the TV broadcast, preferring instead to “look off their phone and switch on to watch the kick-off” before going back to their mobile screens at half-time. “So you can wrap around that really well because the live rights holders are losing the customer in those sections,” he adds.
“It used to be that we’d watch an hour of Sky Sports before the game would kick off. Now, the younger generation don’t do that. So on their digital channels, if they’re going to look, we collaborate together so we can help them engage their users.”
The majority of the work Dugout produces is around out-of-game footage, following teams through training, tours and transfers
Getting back ownership of content
As the data derived from content becomes more valuable, control over it grows increasingly important. Social media platforms have been integral to the explosive growth of clubs’ reach, but the models they provide are becoming less advantageous to those teams from a financial perspective.
One issue is scale. Alastair Shearly-Sanders is the chief commercial officer of Amplifi Global, the media investment arm of the Dentsu Aegis Network. Amplifi, he said, is Google’s single biggest customer and one of Facebook’s, yet clients of that size make up only 30 per cent of those companies’ business. Essentially, the near monopolies operated by those giants in the digital advertising space means the leverage is all on one side.
“Do you want to be part of your growth or their growth?” he asked.
In response to those conditions, Amplifi is seeking to build “the biggest consumer network in the world” and sees working with a battery of soccer clubs as part of that process.
We give the broadcasters who have the rights something extra; everything around the game. We’ve got something all these guys haven’t to supplement their journey and what they want to do. If you’re thinking about a game at three o’clock on a Saturday, then week to week, what are you going to do? You’ve got to fill that void with a great load of content.
As Real Madrid general manager Begona Sanz noted, the time is also approaching where content and sponsorship revenues will converge.
“You have to really bring value,” Richardson says. “It’s the same everywhere. Our job is to keep bringing value. The benefit you’ve got with clubs is that they’re businesses but they’re so consumed around these moments in a week that can change the whole way the business thinks about things. So it’s always very hard to think long-term.”
Richardson notes the difficulty clubs have internally with building content strategies independently of matchdays – which naturally dominate operations – and results. “When you think about that it’s very hard because you then multiply that across multiple clubs,” he adds. “Our job is to fill that void and bring that value.”
Dugout boasts partnerships with a number of European soccer powerhouses including French champions Paris Saint-Germain
Improving quality to get attention
“We’re content creators – we’re storytellers,” says Baxter (below, right). “So we’ve got a whole group of people who work for Dugout, not only all the people who work within the clubs. All the time, they’re trying to find new ways to appeal to the audience, work with the clubs, try and get to the consumer in a different way. It can be everything from the documentary level to a short piece of content.”
Steve Martin, the global chief executive of the M&C Saatchi Sport and Entertainment agency, highlighted on one panel the fact that Facebook users miss around 70 per cent of the content that passes through their feeds. In that context, the quality of any publisher’s output is vital in capturing attention.
According to Tom Glick – the chief commercial officer of the City Football Group of clubs, which includes English champions Manchester City, Melbourne City and New York City FC – content has become the second most valuable product for teams, after the football on the pitch.
Richardson suggests that Dugout “could do 500 videos a week” for its partners, “but we went to 250 to spend more time getting those right”. That output is gaining in sophistication, though the more adventurous work is coming from the fringes.
“Often, it’s not necessarily the monster-sized teams that do the more edgy content,” says Richardson. “At the moment, we’re doing a really cool documentary with Crystal Palace and Steve Parish. It’s never been done before but I’ll have a bet that a lot of the big clubs will want to copy it.”
Making efficient use of time is also essential and, with that in mind, Richardson says that Dugout’s “favourite time of the year is pre-season”.
“We get more time with the players on pre-season tours with the clubs than anywhere else in the year,” he adds. “We create a load of footage that lasts us through the year because they treat them as campaigns throughout the world.”
He points to Dugout’s production of video around Neymar’s transfer from Barcelona to Paris Saint-Germain last year as an example of the impact a well-timed suite of video can make in the close season.
“It’s a brilliant time of year for us,” he continues. “There’s the build-up, and then brands are going, ‘Oh, it’s the season.’ And everyone’s always behind because of the holiday season in the northern hemisphere. We love it, and the day after the World Cup is the day that everyone starts focusing on the domestic season.”
Richardson reveals that Dugout is working on a "really cool" documentary with Crystal Palace that lots of top clubs will want to copy
The value of inter-club collaboration
“The nice thing about this environment,” says Baxter, “when you’ve got those shareholders sitting round the table together in that unique environment – it doesn’t happen anywhere else, there’s no other business like it – they sit around and talk about these content ideas.”
The uniform Dugout model for revenue-sharing on each piece of content is a 50:50 split. “They’re bringing value, we’re bringing infrastructure and investment,” says Richardson. “At every single club, no matter how big or how small, they get exactly the same deal – so you have the whole transparency piece, too.”
When more than one club is involved in generating that content, there is a pro rata arrangement. “If it’s five clubs and there’s 50 per cent,” Richardson explains, “they get ten per cent each.”
The model is also founded on the idea that members will bring value to each other. Dugout has worked with clubs on developing joint media packages – for example, with the four semi-finalists in the Uefa Champions League last year or with Real Madrid and Barcelona ahead of El Clasico. And those collaborations can go beyond creative elements to incorporate knowledge-sharing, with clubs learning from better-placed peers about new markets.
The nice thing about this environment when you’ve got those shareholders sitting round the table together in that unique environment – it doesn’t happen anywhere else, there’s no other business like it – they sit around and talk about these content ideas.
The scale of the global soccer market is such that there is no expectation Dugout will become active outside of it, even if it is possible to envisage similar projects popping up. “But what we are going to do is collaborate with other sports, crossing over the two audiences,” Richardson says. “Formula One is an example; we’re already talking to a couple of other sports about crossing over – and other genres. It could be the music business; there’s an opportunity to bring those two audiences together and produce a really great experience.”
With clubs undertaking all of this activity under their own steam, at a time when the competitive landscape is uncertain and new tournament concepts and potential breakaway threats are looming, there is bound to be cause for competition operators to feel anxious. Richardson believes those fears can be assuaged. Dugout, he says, has met “two or three times” with the Premier League.
“We’re already thinking of ideas where we could potentially collaborate together,” he adds. “Like everything, the biggest problem is that there’s so much nonsense spouted about everything that it’s nice to get to the facts and say this is what’s happening.”