Sports streaming rights: par for the course

Iain McDonald, senior associate at law firm Lewis Silkin, examines the PGA Tour's deal with Twitter and the potential disruptive effects of internet companies circumventing traditional sports broadcast distribution methods.

Sports streaming rights: par for the course

If anyone was still harbouring doubts about the inevitable rise of social media streaming as a legitimate player in sports broadcasting, they shouldn’t be any more.

The news that Twitter has secured the rights to stream more than 70 hours of action from the 2016/17 edition of golf’s PGA Tour may not be earth-shattering, but further consolidates the platform’s position in the new sports media landscape.

The PGA deal, on its own terms, is a slightly odd one. While Twitter and the PGA have collaborated before with Amplify, and both Facebook and Twitter trialled streaming the Tour in 2015, the commercial value of the rights secured are debateable. The live coverage streamed on the platform will likely be the first 60–90 minutes of play on Thursdays and Fridays at tour events. In audience interest and ‘action’ terms, it is at best equivalent to the opening half of a mid-table Premier League soccer match. It is unlikely that the traditional broadcasters would have been champing at the bit to win/protect this package, with the key focus generally being on the back nine on the Sunday evening.

This latest development is, though, a statement of intent – a starting point which gets the ball rolling between the PGA and Twitter. It is also a tremendous PR opportunity for the PGA, which is able to showcase the package as an innovative new service for its fans who are already actively engaging with the sport online, and on Twitter in particular. In turn, this plays well with potential sponsors, who increasingly expect traction with consumers online as part and parcel of any decent rights package.

How to engage on digital platforms and attract new generations of fans is an existential issue for golf. Like many ‘traditional sports’, it is playing catch-up in a new media landscape which has seen a groundswell of audience movement away from traditional broadcasters and sports and on to new platforms and sports that have integrated more readily into the digital environment.

However, platform evolution is nothing new. The original home of sports was on free-to-air TV before paid subscription services, with Sky leading the way, revolutionised and heavily monetised many sports – chief among them soccer. Next came the connected network providers, like BT, to challenge the status quo, offering telephone, internet and television packages with sport often at the fulcrum.

Now we are seeing a new phase of this evolution, with the pure internet companies and social media platforms capitalising on their huge captive audiences, many of whom are avid sports fans. For a long time, the social media giants were able to benefit from these audiences interacting on their platforms around sports, and often sharing clips and sometimes links to pirated streams. Now, sports bodies have been making moves to ensure that their rights are not only protected online, but also bringing significant ROI in the form of audience engagement and digital advertising revenue.

However, this latest stage is a double edged sword. One the one hand, greater demand and competition for rights (particularly those rights which may not have had much commercial value previously) may increase overall revenues for sports bodies and improve interaction with their fans. On the other hand, there is a real risk that rights will become fragmented with questions asked over the extent to which streaming or social media rights can be effectively, and legitimately, split from the packages that are bought by the traditional broadcasters. The billion-dollar question is the extent to which live streaming can co-exist with traditional broadcast deals versus the extent to which it cannibalises these audiences, thereby diminishing the overall value.

Some have dived in at the deep end and switched completely from a traditional TV deal to an online structure. Japan’s J-League announced just such a streaming deal in summer 2016, which is both purely online and also the largest broadcasting deal in Japanese sports history. Others, like the PGA, are treading a more conservative path via integration with Twitter, Facebook and the like.

As a further nuance to this media mix some sports have developed their own platforms and subscription streaming services, with Major League Baseball’s (MLB) highly successful MLBAM held up as the benchmark. Others are setting up new social channels, such as football’s ‘Dugout’, to provide exclusive content to fans unavailable elsewhere and this may evolve to include streaming in the near future.

Questions remain as to what the optimum structure for rights holders is. However, what is clear is that in a new media landscape characterised by convergence and technological disruption, streaming will be, and to a large extent is already, critical to sports rights holders. The PGA and Twitter have shown how even comparatively low-value content can have high-value impact, but for sports bodies more broadly, particularly those with rich broadcast relationships in place, streaming will require a careful approach so as not to kill the goose that laid the golden egg.

Iain McDonald is a senior associate at law firm Lewis Silkin