A secret commercial channel being used by all the smartest sports bodies in 2024

You know the old joke.

A Swiss, a Spaniard, and an Italian walk into a bar.

Looking around, the Swiss says: “I see a huge opportunity here”.

The other two, it turns out, wholeheartedly agree.

OK, not funny at all.

But certainly very interesting once you know that: A) the bar has a massive TV in it B) who the specific characters in this meeting of minds are...

- Gianni Infantino - President of FIFA

- Javier Tebas - President of La Liga

- Stefano Domenicali - CEO of Formula One

As we see it, the smartest players in global sport now understand the potential for out-of-home sports viewing (watching socially in pubs, bars or fan zones) to become the next significant growth channel for their organisations.

Don't worry, we've got receipts. In this newsletter, we’ll explain:

• How we’ve reached that conclusion
• What the next moves to look out for are
• Who the likely winners of this nascent category will be
• And why time is short to avoid getting left behind

?? Follow The Money

Since 2020, while everyone has been obsessing about broadcast rights and sponsorship, these three global giants have been quietly building strategies for what lies between the home and the stadium: the “third space” as Unofficial Partner helpfully coined when we met for drinks last year.

The Third Space offers a tantalising mix of elevated fan experience, genuine community and significant scale - more than 2M people watched the Euro 2020 final in a UK pub.

It’s the next best thing if you can’t make the stadium. Which, with increasingly global fan bases, is the case for the vast majority of fans.

?? Concepts Proofed

In 2020, La Liga launched Twenty Nines, a global network of immersive football bars offering the very best in fan experience.

Formula One followed suit with F1 Arcade in London and have announced significant global expansion plans.

FIFA took it a step further and brought Budweiser on to sponsor the Men’s Football World Cup FIFA Fan Festivals in 2022 (nothing to do with pulling the beer taps in Qatar, of course).

All well and good, but mighty expensive and not exactly ticking that ‘scale’ box.

?? Filling The Strategic Hole

FMCG companies (kings and queens of commercially successful brand building at scale) like to think with the numbers 1/9/90 when it comes to activation strategy.

• 1% is your big play - a huge experiential takeover that lands PR fame and influencer hearts everywhere you scroll.
• 9% is up-weighted investment - site takeovers in key retail outlets; brand engagement, product sampling etc.
• 90% is the scale - Byron Sharp’s bread and butter; posters and wobbly banners raising awareness everywhere your brand is available to buy.

If the actual stadium is your 1% and these fan zones are the 9%, how do you activate at scale?

?? Use Last Year’s Rugby World Cup As Inspiration

That’s exactly what World Rugby and Asahi achieved with eye-catching results during last year’s World Cup.

This emerging mini-industry isn’t just centred on fans and brands, though. The money trail gets really interesting when you consider…

?? How Broadcasters Are Reacting

The anticipated wave of rights being swept up by internet companies hasn’t quite materialised in Europe yet, but it’s certainly happening in the US where YouTube bought the rights to Sunday Ticket (NFL) for a cool $2B /year.

YouTube - great platform at home. Terrible distribution in bars. Fortunately for the NFL - they were wise enough to consult their crystal balls.

As a result, they've syphoned off the rights to distribute Sunday Ticket in bars and sold them to EverPass (a company they set up themselves in partnership with Red Bird Capital).

This is not entirely new in the US. Companies like Joe Hand Promotions have specialised in distributing rights to pubs, bars, and restaurants for decades, including exclusively for the UFC.

So our attention was piqued when something similar happened in Europe last year.

Facing a down round in rights valuation for their annual club competitions, UEFA split out the in-home and out-of-home rights, selling the former to Telefonica and the latter to a dedicated new out-of-home service, LaLiga TV Bar.

It all feels similar to the masterstroke Richard Scudamore pulled when moving away from a title sponsor for the EPL.

Sure, it’s likely no single deal matched whatever Carling or Barclays paid for naming rights, but the diversification of revenue opened up by category partners and international sponsors remains iconic.

It’s how nearly every major league operates now. It’s why Man United once boasted official noodle, laundry and tractor partners.

And why this golden video of Wayne Rooney, gamely pretending to fret about losing his place to some wine from outer space, will far outlast his achievements on the pitch.

??? How We’re Calling It

In light of all that, here are two bold predictions for 2024.

1. The smartest rights holders will clock that out-of-home audiences present an opportunity to make more money from broadcast and to develop a new channel of fan engagement and partner activation.

2. We’ll see a whole host of new companies set up to serve this dedicated sector and join the likes of EverPass, La Liga TV Bar, and Joe Hand Promotions

What are your predictions for out of home sports viewing in 2024?

Reply in the comments, send me a DM, or if you'd like to receive this newsletter direct to your inbox, just fill in this form.

Best,

Leo MacLehose and Dominic Collingwood

Also in this month's newsletter:

• If you doubt the rise of celebrity boxing, just wait until you see the number of fans looking for it in out-of-home.
• Who are the different venue operators taking live sport seriously and signing up to FANZO in 2024?
• Why the biggest and best events on TV in December may not have been the biggest opportunities for bars.
• What's the most exciting brand and partnership work going on this quarter?