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Steve McCaskill | The X Games and the shift towards broadcast-owned events in the OTT era

ESPN’s decision to sell its majority stake in the X Games might mark the end of an era but, as SportsPro’s technology editor writes, the partnership has paved the way for a period of deeper collaboration between broadcasters and rights holders.

4 November 2022 Steve McCaskill

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An Olympic gold medal is considered the ultimate achievement in most sporting disciplines but there are a few notable exceptions. The Olympic Games are not the most prestigious event in soccer or tennis for example, and the same could be said for some of the more recent additions to the calendar.

The International Olympic Committee’s (IOC) efforts to appeal to younger audiences have seen it adopt more ‘extreme sports’, such as skateboarding, surfing, and freestyle skiing and snowboarding, in recent editions of the summer and winter Games.

Olympic inclusion is a huge sign of legitimacy, and medal-winning athletes are hugely proud of their achievements. But some have mentioned the Games in the same breath as another event – the X Games.

The X Games was created three decades ago by ESPN to tap into a Gen X market that was underserved by the sporting establishment and is now arguably the most successful example of a sporting property that was created by a broadcaster.

You could argue that Kerry Packer’s World Series Cricket (WSC) changed the sport forever, but the ultimate goal here was to reunite with the cricketing fraternity and acquire Australian cricket rights for the Nine Network. Sky Sports unquestionably transformed the Premier League into the biggest soccer league in the world but doesn’t have an ownership stake.

And for every successful venture there are plenty that don’t go to plan. NBC entered a joint venture with WWE to create the XFL American football league at a time when it was not on the NFL’s broadcast roster but folded after a single season.

ESPN created a property that was not just entirely different to what came before, but became the pinnacle for the sports involved. Its recent decision to sell its majority stake to MSP Sports Capital marks the end of an era, and is curious at a time when greater collaboration and part-ownership models between broadcasters and rights holders is becoming more common.

For the past three decades, the sports media industry has largely been founded on a model that sees broadcasters rent rights from federations, clubs and others in the hope they can attract advertisers and subscribers. If the partnership is successful, then the cost of those rights ultimately goes up too. Broadcasters only indirectly benefit from the value they help create.

By entering joint ventures or deeper partnerships with rights holders, broadcasters can take long-term bets on new competitions that will deliver value for both parties. This was most recently on display with DAZN’s announcement that it would launch the Professional Fighters League (PFL) competition in Europe.

The rise of streaming can help explain ESPN’s decision. The Disney-owned broadcaster will still retain a minority stake in the X Games and will be the broadcast home for the event as part of a multi-year arrangement.

However, MSP believes there is potential beyond linear broadcasting and paywalls and is eager to expand the event’s presence on digital platforms, including Twitch and YouTube.

An event created for Gen X and embraced by millennials, will now be reinvented for Gen Z.

Is there such a thing as too much sport?

Last week I visited the Sportel sports business conference in Monaco to hear some of the biggest names in the industry discuss the latest trends in broadcasting, governance, and beyond. The fact that it was held in spectacular weather on the Cote d’Azur was an added bonus.

One panel that I was keen to attend was entitled ‘Can there be such a thing as too much sport?’. As someone who panic-recorded every available live sporting event the weekend before the UK descended into lockdown in March 2020 (and emotionally watched a BBC live stream of a K-League game two months later), my answer was an emphatic ‘no’.

But beyond the rhetoric was a more nuanced discussion about how to create value for viewers rather than force feeding them huge volumes of contextless content. The NFL’s natural scarcity was cited as an example.

“It’s not just about delivering more quantity, it’s about delivering more value for fans in terms of quality,” noted IMG president Adam Kelly.

“The NFL has this incredible scarcity value and therefore drives the biggest single premium of any sport in the world. The NBA has created storytelling, personalities, and heroes where it’s more than just a game – you tune in to see a bit of LeBron magic or to see some of the narrative between all these mega stars. And then fans consume the digital material to [continue that experience].

“The Premier League appears to have struck the right balance. The have volume but every game means something. On the final day last season, every single one of the ten games had something riding on it.”

But what can rights holders beyond the elite do to stand out? The answer might come from better scheduling and aggregation.

“I think [aggregating] existing events in the calendar and coordinating schedules is the way forward,” suggested Glen Killane, the executive director of Eurovision Sport, citing the example of the recent European Championships as a way to create something that is greater than the sum of its parts to appeal to viewers.

“It’s the same with the [unified] world cycling championships in Glasgow next summer,” he continued. “The winter sports also get together to create a unified schedule.”

The panellists were less keen on the suggestion of a Fifa World Cup every two years, a move that has been touted by some within world soccer’s governing body.

“If you eat caviar and truffles every day they lose their appeal,” observed Frank Leenders, director general for the International Basketball Federation’s (Fiba) media and marketing arm, who suggested smarter delivery rather than oversupply was the answer.

“You need to have just one World Cup every four years. But there are ways [to grow] by offering the right content to the right person at the right time.”

Barcelona’s game against Valencia was the first to be commentated on by a Twitch creator stationed inside the stadium

LaLiga brings Twitch into the stadium

One of the more prominent trends on social media in recent times has been the ‘watchalong’ format where influencers offer a more partisan, overdramatic description of a sporting event from a virtual or physical studio, responding to comments and other community participation.

LaLiga is keen to tap into this fandom by letting streamers into the stadium so they can deliver their commentary from a dedicated box in the venue. Although these commentators won’t be able to show any live action, they will have a dedicated box to help them convey the atmosphere of a particular match.

It’s a clever way for the league to capitalise on demand for this kind of social experience among younger audiences and bring them into the LaLiga ecosystem without sacrificing more valuable media rights.

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