It's not rocket science

Judging by the media circus around the Super Bowl, you would imagine new records were set for something never achieved before, like a billion viewers. Yet it was a headline in the Financial Times that caught my attention “Super Bowl most watched US broadcast since Apollo moon landing”. Really?

Yes, the 58th edition of Sunday’s Super Bowl drew 123 million viewers across all platforms, which was the second most watched television broadcast in history. And this was including all the extra Taylor Swift fans who tuned in! The most watched TV broadcast was the Apollo moon landing in 1969 with an estimated 125-150 million viewers. And then the US population was only 200 million…..

This snapshot captures and reflects a challenge for most of the sports industry. NFL is the ‘must have content that stands above the crowd in a fragmented television universe’ according to George Cheeks, CEO of CBS Entertainment. Replace ‘NFL’ with the number one sport in your home market and the picture remains the same. Despite all the advances in technology since 1969, somehow the biggest sporting events struggle to capture and retain sports fans, especially younger fans whose consumption habits are different to their parents who grew up with network TV.

In 2021 NBC, Fox, ESPN, ABC, Amazon, and CBS agreed a $110 billion package for the NFL rights for a period of 11 years. This valued NFL content at $10 billion a year and doubles the previous $5 billion valuation of media rights. Champagne all-round. Admittedly the new agreement allows the networks to present games on streaming platforms, hence the inclusion of Amazon, as well as traditional TV. And guess what, Paramount, an OTT streaming platform that sources content from CBS, generated $500 million in advertising revenue across its networks and streaming service from Super Bowl 58.

Clearly sport is an extremely valuable commodity for media companies and their ability to attract subscriptions and advertising revenue. And this is reflected in the recent announcement by Disney, Fox, and Warner Bros Discovery to bundle their sports assets, which would bring an estimated 55% of US sports rights under one umbrella. This new streaming service will be direct-to-consumer including content from the NFL, NBA, MLB, NHL, PGA Tour, international soccer, and the FIFA World Cup. This feels like pulling up the proverbial drawbridge and trying to create a moat around the media ecosystem. Safety in numbers….

And the reason is obvious. According to the 2023 Global Sports Survey from Altman Solon, fans spend over one-third of their TV and video budget on sports, claiming that 70% of fans would switch TV providers to retain access to their favourite sports. But these are the core fans. Over 35% of fans in this survey interested in watching sports do not consume sports weekly. They are classified as the casual or more fluid fans where traditional monetization strategies used for legacy media (TV) are unlikely to generate the same revenues from streaming. And they are more willing to de-bundle sports content.

Almost 66% of global sports executives predicted a subscription-based monetization model where sport is bundled with other content will contribute to a refinancing of sports rights in the future. In simple English this means a price reduction or market value correction. And the solution to prevent any decline in value or churn in subscriptions is to diversify content libraries, augment live experiences, personalized recommendations, offer multiple formats and loyalty schemes. In other words, something the tech aggregators and OTT streaming services are very good at delivering. In the words of one senior executive “engage end users, understand what they want and when they want it: not all consumers want the whole menu – some just want live sport, others highlights and others behind the scenes documentaries.” It’s not rocket science, just ask the fans what they want and deliver it at a fair market price. Then perhaps the next Super Bowl might attract more viewers than the 1969 Apollo moon landing.