"You have the world's largest media companies investing in the game and making soccer a major strategic priority. That this is happening concurrently is unprecedented."
The global leader of Entertainment and Media at PwC’s Strategy&—and Liverpool supporter—on football’s strong position, the future of streaming, and why the sports media rights bubble might not pop.
By Noah Davis
ND The media market is fracturing. How, if at all, does that benefit soccer?
CV We are in a media landscape where there’s been a lot of movement from traditional linear media environments to ones that are more on-demand and OTT-focused. That’s increased the value of live sports a lot. That is to the benefit of soccer in the United States. I look at my son who’s 15 and loves the game. On a Saturday, he can access more soccer content across more different platforms in the US than anywhere else in the world. All these networks—ESPN, Fox, beIN, etc.—they all need live sports content, and there’s a lot of soccer. It’s not so mature that it’s exorbitantly expensive, and it hasn’t been as locked up as traditional sports.
Then look at where things are going, whether it’s ESPN, Turner, or others. Soccer is playing an important role in how they’re launching some of their OTT offerings. Bleacher Report Live has Champions League front and center. The Premier League is a big part of the NBC Sports Gold package. MLS is a big part of what the value proposition will be for ESPN+. These companies are marketing machines. Soccer will benefit from that exposure.
How can MLS take advantage of these trends and potential new revenue streams?
I think it’s gonna be really dependent upon MLS’ ability to drive things that the companies will value. MLS has been a great live attendance product, but it has not yet become a great television product. It still has room to equal what it can do in the arena. MLS doesn’t truly have dominant teams or recognized players and personalities.
The flip side is that MLS’ proposition has been, ‘Hey, we’re younger. We’re where all the growth is because we’ve got millennials. We’ve got Latinos. We have audiences that are otherwise hard to reach.’ MLS’ rights value will remain in a growth mode if it can show that despite these disruptions, it’s still delivering or can deliver an otherwise hard to reach audience.
The other thing is, can it be a driver of these OTT packages? Will people really make a decision to subscribe to ESPN+ because it has MLS? Can MLS really be a subscription driver for them? That’s different than driving ratings. The NBA is in a good spot, in part because it has been able to stay young, stay relevant, and blow it out in digital. If MLS can emulate a playbook like that, I think it’ll be in a good spot rights fees-wise.
Also, many casual fans and non-MLS soccer fans will watch the World Cup. MLS and Fox alike should benefit from that increased exposure.
“ESPN+, I think, has to work.”
There’s talk of a sports media rights bubble. At the same time, there are a lot of new players entering the space: YouTube, Amazon, Netflix, Twitter, Yahoo, etc. How does that affect the prices companies will pay?
In the near term, I think it does help from a valuation standpoint because you have more of an auction situation. More distributors competing for a finite number of rights is going to benefit the rights holders. The downside is that it makes a much more complicated landscape for the fan, especially for casual fans. A more fragmented environment requires effort in terms of discovery and acquisition. At some point, it just becomes both too complicated and too expensive for anyone but the hardcore fan. And we’re probably years from a situation where it gets re-aggregated.
Do you think offerings like NBC Sports Gold and ESPN+ are going to be successful?
On some of them, the programming is so niche that I’m skeptical that it’ll be a big driver. There is so much product that’s available on other distribution channels. Only the most dedicated, determined, or defined fans will go all the way to purchase the extra content.
Are these offerings experiments or do they need to succeed?
NBC Sports Gold is an example of something that’s more of an experiment to see if they can really build a business around more niche sports and communities. ESPN+ is much more than an experiment. It’s a big part of their transformation. ESPN+, I think, has to work. MLS isn’t the only thing that has to appeal to people for it to work. There are going be a lot of other things there, too. It’s not all on soccer’s shoulders to make ESPN+ a success, but I do think it will have to show that it can contribute.
“The NBA is in a good spot, in part because it has been able to stay young, stay relevant, and blow it out in digital. If MLS can emulate a playbook like that, I think it’ll be in a good spot rights fees-wise.”
Where does eSports fit into this whole conversation?
For soccer, the game FIFA is one of the most important—I wouldn’t call it a video game franchise; it’s an entertainment franchise—in the world. It’s an entry point for a lot of fans, probably more so than television these days. If you look at the hot pockets of growth in the media world, eSports is one that everyone in sports entertainment focuses on. They have a fanbase that’s not reachable through traditional media outlets and traditional representations of the game. You want to get those users engaged in your brands and your franchises. And there are revenue streams in media rights, live events, merchandise, sponsorships, and advertising. That’s why you see the leagues and the video games publishers teaming up to build those game experiences.
What’s the next big thing in terms of fan engagement?
I do think OTT offerings have the potential to add to the video experience. Innovating around that could be pretty interesting. Can they come up with different ways of integrating social community, different feeds and data to give you more user control over how you consume the game in a video environment? We’re still a bit away from VR, although they’re coming. If they can deliver on the technology, the demand would be there, particularly for fan bases that are large and global. I’m never gonna get a chance to really be at Old Trafford, but VR could make me feel somewhat like I was there. That would expand the accessibility of unique moments and games. There would be a lot of fan wallet there, too.
Christopher Vollmer specializes in strategy development and capability building for leading entertainment, media, and digital companies. His areas of expertise include developing strategies for revenue growth, building digital businesses, and creating innovative user experiences, and he speaks and writes frequently about major trends in media, marketing and sports. He is also a passionate NYCFC supporter.