Digital is driving new business models and new ways to engage sports fans

Sport has seldom been more popular with the public or as valuable to media owners but even at a time when broadcasters are paying out record sums for the right to screen iconic events, changing consumer behaviour is calling old business models into question.

Digital is driving new business models and new ways to engage sports fans

Sport has seldom been more popular with the public or as valuable to media owners but even at a time when broadcasters are paying out record sums for the right to screen iconic events, changing consumer behaviour is calling old business models into question. TV remains the dominant medium for live sports coverage but thanks to time-shifted viewing and online streaming, viewers are no longer slaves to schedules or passive recipients of advertising. And in the age of social media, nor are they content simply to consume. Sharing and voicing opinions are now part of the experience for many fans. These changes have profound implications, not only for broadcasters, but also for rights holders, advertisers, sponsors and talent, presenting new ways to engage with fans.  

The shifting sports business landscape is to some extent disguised by the big rights deals. For instance, last year the English Premier League sold the domestic broadcast rights to BT and Sky for UK£3 billion over three years. The agreement marked a 71 per cent increase in the Premier League’s television income, with each individual televised match costing broadcasters UK£6.6 million. Since 1992, Premier League TV revenues have increased by 1,000 per cent.

Football remains the frontrunner but golf, tennis, rugby, cricket and motorsport have all benefited from surging consumer demand for screened sport. The value of the Olympics’ TV rights increased 400 per cent since 1996. The order of magnitude varies, but the trend for popular sports is the same. Their value defies gravity.

"85 per cent of sponsorship heads have said they would like to see sports bodies becoming more inventive in engaging fans."

Just as the broadcasters are prepared to pay more, so are sponsoring brands. A recent report by accountancy firm Pricewaterhouse Coopers predicts that by 2015, sports sponsorship will be a UK£29 billion industry, worth more to clubs and governing bodies than ticket sales. But behind the headlines, something else is happening. In parallel with the TV deal, the Premier League also sold the digital rights. For the privilege of screening goals and highlight videos through their websites and apps, News International was prepared to pay UK£20 million until the 2015/16 season.

That agreement illustrates the growing importance of digital media channels such as online, tablets and mobile phones. The public appetite extends well beyond the widescreen TV in the living room or pub. Fans want the facility to watch live events, highlights and clips any time, anywhere and on a device of their choosing. As such, digital rights have established themselves as valuable in their own right. Once they were bundled with the broadcast package. In recent years those rights are increasingly disaggregated with companies from a multitude of sectors competing for them.

The story is not simply one of rising value and disaggregation. Engagement between brands and sports fans has become the priority with time-shifted viewing having potential implications for the value advertisers place on major sporting events. And while sport brings huge audiences to broadcasters, the TV companies – and by extension their advertisers – are increasingly focused on how to engage viewers through other devices.  In a survey carried out by IFM Sports Marketing, 85 per cent of sponsorship heads said they would like to see sports bodies becoming more inventive in engaging fans.

So there is a circle to be squared here. Sport is popular and increasingly valuable but to maintain that value to rights holders, broadcasters, brands and talent it is important that fans continue to engage both with their favourite sports and the sponsoring brands. The question is: how can this be achieved? 

"Social entertainment provides a platform to speak directly, and with meaning, to a target audience."

The role of social media is an important one. Sportsmen and women are often keen bloggers and tweeters and the popularity of this form of communication can certainly be made use of by sponsors, but there is a tension here. Take football – my field – as an example. Many players tweet, but their employers often fear that individuals will say things that run counter to the interests of the club or the coach. In the non-sporting world, brands are increasingly sponsoring social media communications between celebrities and fans but sport is a different marketplace, where organisations not only protect their rights but also their reputation and the dynamics of the coach/player relationship. 

But there are other, more controlled ways to build engagement between fans, organisations and brands in the digital marketplace for sports content. One way forward is to adopt the principles of social entertainment – combining audiovisual content with narrative and ongoing consumer interaction. Not only is this more measured than the relatively unregulated world of tweets and blogs, it also enables content creators to give sponsoring brands, and sports fans themselves, a key role in the interactive elements of the content. 

The potential here is for much greater engagement. Brands are already heavily invested in sport through advertising and sponsorship. By integrating their own messaging and brand values into interactive content, brands can deepen their relationship with fans.

At a time when brands are calling for deeper fan engagement and also facing lower viewing figures for adverts, social entertainment provides a platform to speak directly, and with meaning, to a target audience that is already receptive to their brand messages. Its power to form and shape opinions is unquestionable, its ability to involve and engage fans is both innovative and proven.  


Christian Purslow is the owner and non-executive chairman of World of Golf and former chief executive of Liverpool FC.

The article was written for ‘The Frontier of Social Entertainment’, a whitepaper published by social entertainment company We R Interactive.