The Premier League, the IPL and Watch: what are Facebook’s intentions in sport?

With the launch of its new Watch video platform and a plethora of content already live, speculation is rife as to Facebook's sporting strategy. Head of global sports partnerships Dan Reed took questions from journalists in London on what might be next for the social media giant.

The Premier League, the IPL and Watch: what are Facebook’s intentions in sport?

Dan Reed, Facebook’s head of global sports partnerships, is in London this week for discussions about the social media giant’s new video platform. On Wednesday, he held a roundtable Q&A session with members of the media to discuss Facebook’s ambitions in sport and how the company is helping to define the future of sports content and consumption.

A presence on Facebook has already become an essential part of the marketing and promotional strategy for almost every sporting organisation in the world, providing reach and scale as well as a direct link to their fanbases. Part of Reed’s mission, however, involved educating the sports industry on this side of the Atlantic about the merits of the new Facebook Watch video platform, launched in August and currently the subject of a controlled rollout into the marketplace.

Watch is intended to be a home for live and packaged video, providing a more natural setting than the news feed and homepages with which users have been familiar for over a decade. It also allows Facebook to show off the benefits of integrating video with live chat, measurable reactions, native advertising and branded content, cross-pollination with ticketing and merchandising sales services, and lines into its Instagram photo-sharing network.

The development of this new platform is intended to make video on Facebook more engaging - at present, viewers will spend less time watching video content on a Facebook news feed than they would on a dedicated platform like YouTube - and it has inevitably given rise to discussions about Facebook’s wider plans as a media player. This is particularly true in sport, where its strong ties and deep pockets - with US$26.885 billion revenues reported for the 2016 financial year - could make it a force to be reckoned with very quickly indeed.

Will Facebook get involved in the Premier League rights race?

Needless to say, the Premier League was top of the agenda for the assembled journalists, with Reed’s trip to the British capital coinciding with club discussions over revenue-sharing and with mounting speculation over whether Facebook will make a long-mooted play for global streaming rights to English soccer’s top flight.

Recent reports in the UK press suggested the company has already shown strong interest in acquiring streaming rights to the competition, while Manchester United vice-chairman Ed Woodward has said both Facebook and Amazon will likely “enter the mix” when discussions over the next round of rights sales covering the period 2019-2022 begin later this year.

Facebook has been linked with a bid for rights to English soccer's Premier League, with a tender process imminent

Asked if Facebook would indeed enter an offer, Reed would not be drawn on the speculation but he also refused to rule out a bid. “The Premier League is a very important partner of ours,” he said. “We work with them on an ongoing basis to help them grow their audience and optimise their presence on Facebook. It would be premature to speculate on how we might approach that opportunity but they are a very important partner of ours.”

Reed also declined to comment on the suggestion that talk of Facebook’s interest might have been a ploy by Premier League clubs looking to stoke competition in the marketplace and drive up the value of their rights. “I’m not going to speculate on why or what those in the Premier League are saying,” he said. “They’re going to make that decision, they’re going to say whatever makes sense for them.”

Facebook's unsuccessful bid for the digital rights to the Indian Premier League was a statement of its interest in leveraging the popularity of cricketers like Virat Kohli on the subcontinent

How about that US$600 million bid for the Indian Premier League?

While it remains to be seen whether Facebook will enter the next Premier League bidding war, the company has already demonstrated it is serious about acquiring premium rights elsewhere. Last month, the company made headlines when it entered a bid in the region of US$600 million for a five-year deal to stream matches from cricket’s Indian Premier League (IPL) on the Indian sub-continent.

As with its other sports coverage, Reed confirmed, IPL matches would have been made available free-to-access on Facebook for local fans, with the considerable advertising interest that accompanies one of the world’s most avidly followed competitions helping to cover the company’s investment.

Though Facebook ultimately lost out on those coveted rights to Star Sports, which ended up paying US$2.6 billion for both broadcast and online rights, the company’s decision to make such a substantial offer was a clear statement of intent. So what motivated that particular bid?

“We see first-hand on our platform that the IPL is incredibly engaging in India,” explained Reed. “It connects communities, it’s immensely popular in that market, and so it’s consistent with this approach to add interest and being home for that kind of content on a more robust basis.”

Had Facebook won those IPL rights, the deal would have been by far its biggest investments in sports rights to date. Hypothetically, then, what would the company have done with them? Might it have looked to collaborate in some way with the IPL’s linear broadcaster, for example?

“I probably shouldn't speculate hypothetically about what might or might not have happened in that situation but that’s certainly a possibility,” Reed said. “You can imagine a situation where that would be a mutually beneficial relationship but you never know.”

Which rights is Facebook interested in?

Until recently, Facebook has acquired rights to lower-tier sports as well as less valuable or geo-gated content from premium properties such as Major League Baseball (MLB) - where teams like the champion Chicago Cubs have made local TV rights available out of market. But as it looks to build out its sports offering to better serve its more than 650 million sports fans worldwide, plus a further 200 million-plus on Instagram, will Facebook begin to seek big-ticket rights it can exploit globally?

Though he avoided specifics, Reed did provide some insight into Facebook’s acquisition strategy. “All things being equal,” he said, “content that flows to the broadest possible audience, and lights up all of the community of Facebook, is more interesting. That said, all things are rarely equal.

“Different properties have different levels of popularity in different countries. There are different values of different content in different regions, and so it’s really on a case-by-case basis.

“I’ll give you an example. Our Major League Baseball deal is geo-gated to the United States, whereas our Stadium college football deal is global. Our WSL deal is global but our Fox Uefa Champions League deal is geo-gated to the United States. Different circumstances will have different approaches but I think a key thing is you can do all of those things.

“We can do one-stop global distribution but we can also geo-gate in any number of countries successfully. Our Cubs broadcast we even geo-gated at the zip code level in the United States.”

Facebook carries geo-gated coverage of Chicago Cubs games outside of the team's local TV market

Can rights holders across the board expect Facebook to splurge on content?

In short, no. Of the more than 3,500 live broadcasts of sports events Facebook has shown in the first six months of this year, the vast majority have not come through paid partnerships. While the company has made undisclosed financial investments to license rights from some of its content partners - Major League Soccer (MLB), the World Surf League (WSL) and MLB included - it has typically not stumped up any cash whatsoever.

It is for that reason that Reed describes Facebook’s service as “free consulting”. He says the benefits of partnering with the company are not necessarily monetary, especially for smaller sports that may struggle for mainstream airtime but are looking to ramp up distribution and grow their fanbase.

He explained: “The typical relationship or partnership we have with a club, for example, is we’ll ask them, ‘What are you hoping to accomplish, generally, as a business?’ Inevitably [they say,] ‘I want to grow my fanbase, I want to engage that fanbase, I want to convert them into revenue streams that I have, monetise this’. So we work with them in a variety of ways that do that.

“Most of the time it doesn't involve money changing hands because we can help them do those things and they can do it on their own on our platform. But we provide the service and the insights and resources to do it effectively. And that’s obviously good for us because we’re helping them reach their objectives but their content drives time spent on our platform, which is only good for our business as well. That is the currency of the partnership.”

According to Reed, Facebook's free-to-air, ad-supported model is unlikely to change anytime soon. He said Facebook remains “bullish on ad-break and branded content” but it does have other means of monetisation at its disposal and could look to build a paid-for platform further down the line - although, he added, “it’s too early to say definitively what the monetisation strategy will be”.

What does the future hold for Watch?

Facebook launched its Watch video service in August as part of an ongoing push to put original video content at the heart of its platform. The new feature includes content produced exclusively by Facebook partners and has initially been rolled out on the company’s mobile, desktop and TV apps to a limited number of users in the United States, before a broader release across the globe in future.

Sports programming available upon launch includes Major League Baseball (MLB) games, WNBA All-Access, streams of Mexican soccer’s Liga MX, and Golden State Warriors’ ‘Championship Rewind’, a documentary that looks back at the team’s championship-winning 2016/17 NBA season. More content is set to be added in due course, with Reed saying the platform is ideal for sport as it combines "episodic, longer-form viewing" with the broader conversation that has become the hallmark of Facebook's network.

“The Watch platform is designed to be an open platform,” Reed said. “It’s still in its early days so it’s not fully fleshed out but it’s designed to be an open platform, where anybody can watch a show page and publish a show to Watch.

“Of course, you have to prime the pump. You have to start to stimulate the ecosystem, so many of the shows that are on Watch today are actually the result of a paid partnership, like some of the live sports deals.

“But we expect, over time, that more and more content will come organically on to the Watch platform and, like Facebook, there will be more self-service monetisation in the form of ad-break and branded content.”

By opening up the Watch platform to all of its users, Facebook expects content creators big and small to utilise the service in future. While that could create visibility challenges for smaller leagues and clubs, including those at the grassroots level, Reed says Facebook’s technology and capabilities when it comes to user data and targeted marketing will enable distributors to “deliver the right piece of content to the right audience”.

“Obviously a big football club will automatically, if they’ve been doing the right things to build reach and build engagement, they will reach a much larger audience, whereas the youth sports might care about activating the parents of the kids that are performing on the floor or on the pitch,” he said.

“For them, 1,000 viewers would be a huge success. We think the power of our platform is that we both deliver that broad global distribution for the biggest properties, but we can also aggregate a niche audience very effectively on a global basis.”

Facebook: friend or foe?

As Facebook’s ambitions in sport take shape, it stands to reason that traditional broadcasters and media companies should see the company as a serious threat - if they don’t already. Although Facebook currently collaborates with some of those traditional players on content distribution - Fox Sports and Univision in the US among them - the company’s continued interest in rights acquisitions will inevitably put it in direct competition with some of its existing partners.

That could pose headaches further down the line but, for now, Reed says Facebook’s partnership proposition for broadcasters is “pretty compelling”, and he sees many areas in which the company can build “mutually beneficial, collaborative relationships” with traditional outlets.

“We can help them,” he said. “Certainly there are rights that they have, virtually all broadcasters, that they’re not distributing. We can help them think about distribution and monetisation and footprints.

“Frankly - put aside for a minute the actual streaming of games - we work with broadcasters all around the world to actually help support their current television business. For example we work with Fox in the US to help them devise a counter-programming strategy during the live events and get people to tune into the live event on television, which is a bedrock of our relationship with broadcasters.”

Strategically speaking, Reed noted there is “no template for defining what our partnership approach should be”, not least since Facebook’s sports strategy is only now taking shape and market circumstances vary across the globe. Nevertheless, he said Facebook is “intending to be complementary to broadcasters and rights holders”, even if it does have designs on becoming a major force in the sports media landscape.

“It’s so early in the process,” he said. “I wish I had a simple answer. It would make it a lot easier but the reality is there is no template.”