Marc Watson has been here before.
Just a few years ago, he led a sports broadcasting newcomer on an incursion whose effects have been as dramatic as any in recent years. As chief executive of BT TV – a media offering from the UK’s former monopoly telecoms operator that was in its relative infancy when he joined in 2009 – he was one of the main creative forces behind BT Sport, which emerged from nowhere to secure live rights to a glut of premium properties in short order.
BT’s arrival not only created a durable challenger to the country’s long-dominant Sky Sports, it also changed perceptions of the kind of companies that could deliver live sports content and the way fans would pay for and watch it.
In March 2014 Watson, who previously advised the likes of the Premier League at rights consultancy Reel Enterprises, stepped away from the insurgency he had helped to foster in search of a new challenge. By the turn of the following year, he had found it. Andrea Radrizzani, another man with a background in rights arbitrage in his capacity as the co-founder of the MP & Silva agency, was keen to move across the aisle and set up a broadcast network of his own. Watson was a natural fit for the new venture and by August 2015, Eleven Sports was live.
Now operating in seven markets – Belgium, Luxembourg, Poland, Singapore, Taiwan, Italy and the US – Eleven is both a product of and response to a broadcast marketplace that is fluctuating with a kaleidoscopic intensity. It has taken a platform-agnostic approach to distribution – available with linear cable operators in some countries, and as a direct-to-consumer digital offering in those territories where the market supports it.
Different routes have been taken to its audience. In the US, Eleven acquired distribution assets from and took the place of cable network One World Sports in order to find a way into the biggest media market around. In Italy, it bought a majority stake in the over-the-top (OTT) service Sportube – securing its rights to Lega Pro, the national third tier of club soccer, in the process. In the days before this magazine was going to press, it also secured digital rights to three live Serie A soccer games a week. Fans are now able to pay €1.99 per match or €3.99 for full weekly access, as desired.
That speaks to the probing approach Eleven takes to its rights portfolio. Where possible, Eleven has made itself the home of premium competitions like the Premier League, Germany’s Bundesliga, or Formula One. But it is also sensitive to local interests, building much of its presence in Poland, for example, around domestic affection for speedway.
The on-air production carries a local flavour, and responsibility for each national operation is devolved to a local team. But this remains a broadcaster with global ambitions. Its worldwide base is at the offices of Radrizzani’s Aser investment group – whose interests, since early summer, have also included sleeping English soccer giants Leeds United – in the high-end London district of Mayfair. It is there that SportsPro meets Watson to discuss how Eleven intends to extend its network further.
Eleven has made local knowledge and expertise a cornerstone of its business, hiring experienced broadcasting staff in each of its seven territories
SportsPro: What was it that first drew you to the opportunity here at Eleven?
Marc Watson: Well, initially it was the chance to work with Andrea Radrizzani – and the opportunity to build an international sports network. That’s what we set out to do back in about January 2015 when we started working together. That, for me, was what I wanted to do and was a very exciting prospect.
We started, really, with a blank sheet of paper. We had some rights; there were some markets where rights were available. So we looked at those rights and we looked at those markets, and then we started moving at speed. We set Eleven up as a company in about March 2015 and we launched in August.
On a day-to-day basis, what’s your level of communication with Andrea and with Danny Menken, the group managing director?
Danny and I work constantly together, dividing up the tasks to run the business. Generally he is focused on the day-to-day operations and I am more focused on strategy, people and the numbers. The big deals, we tend to divide up between us. Andrea is not involved in the details of running the business but he is very close to what we are doing; we talk all the time and he helps a lot with driving the business forwards. He’s a great asset for us.
In each market, you have someone operating the national channel in a role that varies from set-up to set-up. How do you manage that structure?
We have a global-local model. What we’re aiming to do is set up a global platform which is able to capture some global synergies in running a sports business – in the acquisition of rights, in our branding and marketing, in our production and distribution of content, and particularly in our management of consumers. So wherever we can find cost synergies and savings at a global level, we’re looking to do that.
But what we’ve realised about sport, unlike other genres of content, is that to be successful you have to do it locally. Sport is consumed on a local basis by fans, so you have to be very local. That means that we’ve put together a local operation in every market with, as you said, a local managing director running the business, local studios, local production, and a localised service for the fans that we’re targeting. So that element of our structure is incredibly important to how we operate and to our future success.
We try and devolve a fair bit of authority to our local MDs to run the business in the way that they want to run it but we are, in reality, working very closely with them every day as we run the business and build it out.
How does that affect what you do, particularly strategically? The other role that you’re best known for in sports broadcasting was in heading up BT Sport in the UK, where you were running one national market top to bottom. How does that compare with having all of these different nodes?
It is quite different, and it is a challenge. Running a small business is just as complicated as running a bigger one, is what you find out, and each market is different.
It comes down to selecting the right people and having great people in every market who really know their market. We’re not taking someone from London and dropping them in Warsaw or Taiwan and asking them to run the business, we’re picking someone who’s local and really understands the market to work with us to run that business and build it.
We are trying to create localised services but with a single global machine working underneath, leveraging scale in rights acquisition and distribution and finding synergies on production, technology and transmission. Finding the right balance between delegated local control and central interference is always a healthy tension. In the end, we know that the more you try to homogenise into a global service, the more you lose traction with local customers. So we try and keep this in mind with everything we do. In practice, we review the local businesses every month, visit regularly and then in between we get directly involved in the bigger stuff, wherever that might be happening.
Looking at Eleven from the top down, how are you trying to establish a point of difference? When you and Andrea sat down two and a half years ago and started talking about putting a broadcaster together, what did you see that broadcaster as being?
When we started out we were initially pretty opportunistic, based on where we saw good rights deals and felt there was a gap, but since then we’ve become a bit more sophisticated, starting with the cost and availability of rights and then focusing on potential demand, collecting all the local audience and usage data we can get our hands on.
We look at this past audience data, fan sites, live gates, social media stats and so on. Then finally we’ll try and make a judgement about future competition on rights and the impact of our entry into the market. We’re looking for an unserved market of fans, for whom Eleven will be a premium service, low rights costs, and an absence of inflationary pressures. All that said, in the end it comes down to a judgement – and whether we can find the right people to run the business locally.
Are you replicating your approach from market to market and developing a set of best practices or do you start from scratch each time?
No, we absolutely have a model that we’re looking to roll out across the world. And our approach to producing content and our approach to making content available – and our focus on the fans – is the same wherever we go. And actually, it’s the same regardless of what content it is we’re broadcasting.
So in some markets we have some quite big rights, and in other markets we have smaller rights, but the approach for all of it is pretty consistent.
It developed, by necessity, very, very quickly.
Let’s look at a recent example. The move into the US is a few months old so it’s still at an early stage even relative to the age of the global company. What was the nature of the opportunity you saw there?
We wanted to be in America because it’s the biggest media market in the world, but what we saw in the States was a market that’s changing extremely quickly and is very dynamic. And we saw very large number of sports which are currently underserved for their fanbase: they’re not covered in the way that their fans want and to the degree that their fans wanted. So we saw an opportunity to change that and to build a business on the back of it, and that’s why we entered into the marketplace.
We’ve started with a pretty traditional linear channel, actually, which we took over in March. Since then we’ve tripled the television audience – from a small base, but we’ve tripled the audience – and stabilised the business. It’s doing pretty well.
We’ve gone from zero hours of content when we took it over to 1,700 hours of live content a year, and we’re continuing to build that out. And what we’re really focused on there is not taking on the big guys in that marketplace but looking for sports which are underserved where we think we can make a difference to the fans’ experience. So we’re right at the beginning of our journey in America but we see a lot of potential, we see that we can take this business a long way in that marketplace, and I think you’ll see a lot of activity from us in the coming 12 months or so in that market.
If you’re making a service available to a dedicated fan then, for that fan, you are a premium service.
What level are you pitching it at? What sports do you see as being underserved and what role do you think you can play in the market? What will the Eleven Sports identity be there?
Our identity there is still evolving – it’s early days – but we’re targeting younger, dedicated fans of sports that are not generally covered by the big networks. They may cover a little of each sport – the occasional match here and there – but they’re not giving consistent coverage of these leagues, and we see an opportunity to give more consistent coverage to those fans.
That might be international sports. It might be national sports. We recently did the world championships of Frisbee which did very well for us, actually, and was not covered anywhere. It sounds small from the UK but actually, in America, it played very, very well. We’re looking at high school and college sports which are underserved. We recently took the rights to Ivy League football, for example, which again has proved a very good product for us – good value and quite high-profile. And then we’re looking at local teams and local sports where, again, the fan is not able to access all the content they want to see.
Naturally, the approach is one that’s going to make Eleven a premium broadcaster in some countries where you’ll be carrying major local rights or Premier League rights, while your positioning in the US is going to be markedly different from that.
I’m not sure it is, actually, because if you’re making a service available to a dedicated fan then, for that fan, you are a premium service. Because you’re giving them what they want – and charging for it. So actually, all over the world, we’re a premium service. If you’re taking what you might call smaller sports and putting them on a free-to-air network, that might be different, but that’s not what we’re doing. We are looking to serve the unserved fan with a premium product, and we’re doing that the world over.
The content may change from market to market, and the size of the fanbase may change from market to market, but the proposition is actually pretty consistent.
Germany's Bundesliga has been a strongly performing rights acquisition for Eleven
How consistent are you aiming to be with the rights you’re acquiring? Where you can buy a set of rights in every market that you serve, do you prioritise those opportunities at all?
Definitely. If there’s an opportunity to do that, we will do it, and you’re maybe seeing the beginnings of a trend towards the globalisation of the selling of rights. But as you know, most of the major rights are sold on a fairly localised basis, still.
But that is interesting for us and the more global scale you get, the more that’s something you can look at, and that is a potential advantage of having a business across multiple markets around the world. Certainly, in the future, that’s something that I see as being a key benefit.
What about your allocation of resources to each market? You’re allowing each company to run with a degree of independence but are you, from your seat here, looking to give a company support in terms of rights acquisition in one market, and looking for another to sustain itself a bit more? What’s the approach?
It’s a bit of a balancing act, depending on the maturity of the marketplace and the people that you’ve got there. But really, we’re very involved in every market is the truth. The key is to have very good people locally and let them get on with running the business but get involved enough so that you can bring some global synergies to what they’re doing.
In practice, that means that it depends a little bit what’s going on at a particular time in each market as to where your focus goes but, really, we are pretty involved everywhere. And we could probably have done a lot more markets – we’ve done seven markets in two years – but we’re moving at a pace which we think is sustainable in terms of the size of the business that we’ve got, both in terms of the capital of the business that’s required and the people that we’ve got.
So we’re pretty happy with what we’ve done so far. We’re now starting to look at the next set of markets that we want to roll the Eleven brand out to. If you look at where we’ve got to so far, you’ll see 18 services now, seven markets, more than 15 million paying customers, available in more than 70 million television households and many more via the internet. We’re producing over 20,000 hours of live content a year. Last weekend, we did well over 100 live sports events. We were the number one and number two sports channel in Poland on the opening weekend of the football season, and we’re growing fast in all of our markets.
The last few months we’ve gone through a period of consolidating the businesses that we launched and really focusing on getting them right. We’re now coming to a point where we’re ready to start expanding again.
You’re only operating in a few markets at the moment but it’s quite an esoteric spread of very different types and sizes across three continents. Are you finding that there’s a uniformity to the performance of any given rights? Have there been any that have really surprised you in terms of how they’ve done?
There is some uniformity in sport but there are also real differences wherever you go – in every market. And, actually, it’s understanding the differences that is key to your success. We’ve now got a very good portfolio of rights around the world – it differs a little in every market, but we’ve got a very good portfolio of rights – and, overall, they’re performing very strongly.
Just to give you a couple: the Bundesliga in Poland, which we’ve just taken, is performing very strongly for us. As I said, in the opening weekend of the season we were the number one and number two channel in that market, which is pretty phenomenal because we’re not as well distributed as some other channels. So that’s performed extremely well for us; Formula One in that market has done extremely well for us, too.
The Lamigo Monkeys, a local baseball team which is top of the league in Taiwan, is doing really well for our Taiwanese business. In Italy, Lega Pro is a different model and a different sort of right but it’s doing very well for us. It’s a very dedicated fanbase which was very underserved; there were very, very few matches available before we came into the market. And for that fanbase, it’s doing extremely well – and, by the way, it’s a premium product. For those fans, Eleven Sports is a premium product.
In the end, you’ve got to give consumers what they want because if you don’t give them what they want, they’re going to take it. That is the lesson from the music industry, and there’s a lot of lessons of that from the sports industry, too.
We’ve talked a lot about rights but Eleven has also been willing to embrace digital platforms in new markets from the outset. What are some of the factors that influence what type of services you’ll be offering and where?
What you’re analysing in each market is what rights are available and what rights are interesting, where the fans are for those rights and what’s the best and most cost-effective way of reaching them. Now, in almost all of our markets, we are running linear channels as well as a full OTT service where fans can watch the channel and they can watch the particular matches they want to watch. The only exception to that at the moment is Italy, and that’s because the product we’ve got in Italy lends itself better to an OTT, live on-demand type of service than a linear service.
I think in most markets where we’re launching, you will still see a linear element to what we do. But increasingly, the SVOD and the live video on demand element of that is increasingly important. But we absolutely see a place for both in the present marketplace and I see that still being the case for a few years yet.
German soccer legend Lothar Matthäus has worked as a pundit on Eleven Sports’ coverage in Poland
A lot was made this time last year about the live audiences on TV for major, premium sports. Do you think the sports broadcast industry was late at all in seeing what was going on with OTT and direct-to-consumer video services, particularly given that live sport was the last thing that was outperforming the trend for TV audiences elsewhere?
You’ve seen some audience decline. It’s not clear to anyone whether that is due to piracy and unrecorded viewing or whether it’s due to an actual decline in audiences. I think it’s probably due to piracy; I don’t think there are less fans for sport and I don’t think fans’ propensity to watch sport is reducing materially. I think that there are just more ways of fans accessing the sport that they want to watch and some of that is not being recorded in the official data. That’s my guess.
There’s obviously a danger in that to the sports industry and I think the sports industry and the pay-TV industry has been a bit slow in responding to it, yes. There’s been an awful lot of value locked up in pay-TV for a very long time and I think the industry has been worried about impacting that value, and therefore slow to put new models out into the market. But I think that’s starting to change now. It has to change and it is starting to change.
Is that just a distribution issue or is it also a rights issue? Will there come a time when sport is sold differently?
In the end, you’ve got to give consumers what they want because if you don’t give them what they want, they’re going to take it. That is the lesson from the music industry, and there’s a lot of lessons of that from the sports industry, too. And if you are giving consumers what they want, and you’re giving them what they consider to be good value, then you’ll continue to have a good business. That’s what the industry has got to do and that’s the key challenge.
What is that about? It’s about the customer proposition and it’s about the retail proposition. So, yes, it’s about the content that you make available and how you make it available, and from a retailing perspective it’s about giving consumers what they want in the way that they want it. So all of these elements come into play in order to be successful and in order to keep the illegal side of the industry at bay. But if you put into the market a proposition which is stronger than illegal services, which is well priced, which is flexible at the point of demand, and which represents good value, then you’re going to be OK.
A lot has been made of the spectre of tech companies – particularly Amazon, who have been on the fringes of a few major sales processes as well as picking up some smaller rights – potentially making a serious move into the sector. What does that do to the marketplace?
I don’t know what the strategy of these companies is. I’m not privy to that. What I see from the outside is some very big companies who are interested in the space and interested in what sport can do for their core business – and are testing what sport can do for their core business, but are not quite sure of the outcome yet. That’s what I see from the outside.
I think from the point of view of a broadcaster like us, it’s very important to develop relationships with these companies, and to work with them, and, actually, to be willing to make your content available to these companies. That is the key.
If you look at why telcos have moved into sport, often it was driven by the fact that they couldn’t access content for their customers and they therefore felt obliged to go out and buy it for themselves. For these big companies, I think the first thing is to develop a relationship with them and find a commercial way which works for both sides to make your services available for their customers, and then we’ll see from there. Certainly, at Eleven, that’s what we are focused on doing and we’ve got some good conversations going with all of those companies.
Are your priorities different, given the scale and age of your operation, than they might be at an established market leader?
Everyone has their own business to protect and grow and their own strategy for doing so. We’re growing fast but we’re not a big player – we’re an independent operator and we’re two years old. So the key for us is to reach our fans and our customers wherever they want to be, and if they happen to want to consume our content via another platform – where it be an Amazon or another platform – then I think it’s our job to make sure that they can do so. That is what we’re focused on.
This article originally appeared in issue 96 of SportsPro Magazine. To find out more or to subscribe, click here.