The future of the sports media and sponsorship ecosystem

Despite the clear and obvious challenges of the Coronavirus pandemic, sport remains unmatched at reaching emotionally engaged and demographically diverse audiences, at both global and local levels, in real-time. It also offers relative safety for brands who are striving for growth. The cumulative financial, brand and fan value of leading sports franchises continues to increase year-on-year.

Virtual fan screens at the NBA bubble in Florida during the 2020 Playoffs.

This is supported by the knowledge that brands led by the best marketing people know that now is the time to invest in the right properties, at precisely the moment when competitors may be looking to reduce their portfolios. This can create a significant competitive advantage in terms of share of voice and sport remains a hugely attractive investment opportunity.

The biggest reason for optimism post-Covid-19 is that all sponsorship stakeholders have had to reset, review and innovate their whole approach to the traditional model. We are entering an era of partnership, based on true collaboration and finding creative solutions that meet the objectives of both rights holders and owners, the success of which can be measured empirically and not just emotionally.

To that end, data will begin to define all future partnerships and will be the currency by which deals are agreed and measured. Digital inventory is not only the quickest way to gain valuable first-party data, but also the primary method for rights holders to create better impact and value for brands.

Data will begin to underpin the entire partnership value proposition and ensure that digital rights are no longer seen as an add on in negotiations, but a key differentiator.

The days of sponsorship as a pure branding exercise are well and truly over. In future, ideas will be co-created by brands, rights owners, athletes and ambassadors, underpinned by purpose and centred on developing intellectual property and tangible first-party data. This will lead to more inventory, assets and revenue streams being created.

Part of this evolution will be the increase in personalisation and customisation of products and services as all media, brands and rights owners try and optimise consumer experiences and drive advocacy. If the fan is not truly at the centre of a proposition, then it will more than likely fail.

As NBA commissioner Adam Silver has said: “The next generation not only expects the product to conform to their schedule, they want to mould the product to conform to what it is they want to consume.”

The way we produce, deliver, consume and share content is rapidly evolving too. Leagues, Governing Bodies and rights holders will speed up investment in DTC platforms, while continuing to diversify their distribution across OTT, Pay-TV, FTA and social media platforms. We are already seeing this with a raft of OTT launches, including the Premier League.

It will be fascinating to see the mid and long-term impacts of the global pandemic on sports rights valuations. There are competing arguments as to whether the increasing number of players in the market will continue to drive up valuations, or whether we are reaching a ceiling, which has now been lowered considerably by the financial implications of the Coronavirus. The sports rights market remains incredibly fragmented and there could be some opportunistic consolidation, taking advantage of those sports media companies that are overexposed.

Finally, the podcasting phenomenon will continue to grow as part of a wider trend for more authentic ways to deliver brand messages. We’ve seen big investments made by Spotify, Google and others, and listenership generally is on the rise. With an increased focus on tech development to assist in accurate measurement, more and more advertisers will be tempted into this space.

There is no denying the pandemic has been catastrophic on many levels, but it has also forced the sports industry to fix some fundamental flaws and innovate faster than anyone could have imagined. Those who embrace change are laying firm foundations for success in the future.

Dan Tunna is a sports marketing and communications consultant with extensive experience across brand, media and rights owner organisations. For more information please visit https://www.dantunna.com/