Altman Solon is the largest global TMT consulting firm with expertise in media consulting. This insight explores how sports rights owners can adapt to a shifting media landscape by expanding reach, innovating distribution models, and focusing on long-term value creation.
Media rights have long been sports organizations' main source of income. But in today's fragmented and economically challenged media landscape, some rights are facing potential devaluation. Factors like cord-cutting, market saturation, and competition from other sports have already led to flat domestic rights revenues for four out of five European soccer leagues. Even though rights deals continue to climb for top-tier U.S. sports, some 85% of industry leaders believe that rights owners are not actively addressing the changing needs of their media partners.
Rights owners need to think and act like entertainment franchise owners. Creating more assets and inventory with relevant products and services to attract, entertain, and retain new, adjacent and younger audiences.”
— CEO, Sports Media Company
Despite this challenging media environment, the reach of top leagues and athletes has never been more global, with fans in some markets willing to pay hundreds of dollars a year to stream games and events from their favorite leagues. Sports organizations can innovate their product offering and experiment with new direct-to-consumer distribution models geared toward these fans – especially given that elite domestic leagues, like the NFL and major European football leagues, appeal to over 80% of fans in their respective domestic markets.
For rights owners to mitigate market risks, they should expand their addressable market by:
The sports industry is undergoing a massive transformation, and sports organizations must adapt their business models accordingly and take a more active role in their media rights. By better understanding who their fans are, and getting clarity on their business model, including distribution strategy, buyer profiles, and ways to innovate, sports rights owners can thrive in uncertain times while rewriting the playbook on monetization.
Single-mindedly focus on fans, obsessively build strong products/propositions and seamlessly collaborate with stakeholders including licensees, for maximization of value (commercial and non-commercial).
— Sanjog Gupta, Head of Sport, Disney Star