More money, more problems?

Earlier this month, the rights to broadcast the Premier League in the UK from 2016 to 2019 were sold for a combined £5.13 billion. At over £2 billion more than the equivalent package from 2013 to 2016, this works out at £10.19 million per game over that period, or a staggering £113,000 a minute (which is still three times cheaper than Wilfried Zaha...). It now means that, when the deal starts, all Premier League clubs will receive more money for their domestic TV deals than any other club in the world, save for the two Spanish behemoths, Barcelona and Real Madrid.

Whichever way one spins it (and there are a lot of ways – including this excellent analysis from The Swiss Ramble), it represents a dizzying sum of money, but what are the implications of the new deal for the sport?

For football traditionalists, there is no shortage of concerns, including the introduction of Friday night Premier League football and the increased dominance of the Premier League over other domestic competitions (the £3.5 million prize pot for the FA Cup compares fairly unfavourably with the projected £152 million for the Premier League champions). But, perhaps most intriguingly, the announcement has caused football fans to sharpen their focus on how clubs utilise these vast sums of money.

With accusations of greed and wastefulness already commonplace, the increase in TV money will be an added stick for supporters to beat clubs with if there is no tangible change in the way that most fans feel they are treated. Rising ticket prices, poor matchday experience, difficulty of getting to matches and poor administrative club staff pay are all familiar, justified gripes from football fans that will be inevitably magnified by this influx of cash.

At the announcement of the new deal, Premier League chairman Richard Scudamore declared that the Premier League would be putting more money towards grassroots football, but also called on individual clubs to act to help fans, specifically around ticket prices. This sentiment was shared by many in the footballing fraternity, who queued up to heap pressure on Premier League clubs: Gary Lineker commented on Twitter that football was now ‘awash with money’, and called for clubs to ‘cut ticket prices and make it affordable for real fans to attend.’ Jamie Carragher continued the theme by stating that ‘ticket pricing, especially for away fans, has to change’, advocating a policy of ‘£20 for the 20 away games.’

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Although ticket pricing should be the minimum that clubs are doing to improve their relationship with fans, it will be intriguing to see their different approaches to it, and will be a fairly simple aspect to track. Will we really see wholesale changes or will we see the continuation of a general theme of token gestures from clubs (I got a £2 discount off a recent away match ticket from my supported club, which knocked the cost down to a much more manageable £53…)?

If no substantial action is taken by clubs, it is clear that fans will waste no time in airing their grievances. In a world where fans feel increasingly ostracised from the football club hierarchy, there has been a noticeable rise in high-profile protests by supporters using the level of focus on the sport as an opportunity to push their agenda. This fan action is not focussed solely around the issue of ticket pricing and club treatment of fans, but in recent times has also included high-profile protests against clubs signing particular players, club owners who do not seem fit for purpose and even the use of WiFi in stadia.

In a world where Premier League clubs’ financial power continues to rise exponentially, and where fans increasingly feel marginalised, we are progressively seeing examples of supporters effectively undertaking their own PR stunts. It is a disappointing sign of the times that the public tarnishing of clubs’ images (often by their own fans) and those of governing bodies is seen as one of few viable ways to force action.

Of course, this sort of protest from supporters can also have a negative effect on club partners; Portsmouth shirt sponsor, Jobsite were probably not delighted to be associated with the above march against club owners, who fans believed were wrongly appointed to their powerful jobs. But outpourings of fan sentiment like this can often give sponsors interesting openings. Not only does it give useful fan insights that can influence creative activations (maybe fans aren’t desperate for WiFi in stadia?) but more importantly creates opportunities for sponsors to step in and add real value for fans when they may otherwise be feeling neglected.

This can be in the form of clear, tangible demonstrations of support like increasing opportunities to get to games or cutting costs of getting them there, but also can be through adding value to the matchday experience. Also, as has been seen in high profile examples such as with Ched Evans, sponsors can use their considerable clout to reinforce fans’ views to push for action and influence clubs in a way that fans simply cannot.

It will certainly to be interesting to see if, and how, Premier League clubs look to help fans with the increased TV money. But, equally, if there is continued inaction, then the reaction from sponsors to these ‘injustices’ will be worth keeping an eye on.

Watch this space.

ESports: It’s in the Game

Banana, Fenrir and ppd. No, that’s not a profound spellcheck error, but actually three superstar players who, as part of separate teams, competed for $10.1m in prize funds at a single tournament earlier this year. To make a comparison, this is only 19% less than what UEFA paid out to Real Madrid for winning La Décima in 2014.

Unlike Bale, Benzema and Cristiano Ronaldo, however, you probably haven’t heard of them, their teams or even the sport they play. They won their money playing Dota 2, an online multiplayer battle arena game, think digital chess combined with fantasy gaming, and they represent top members of the growing eSports community.

ESports is a catchall phrase for what is essentially competitive computer gaming: organised tournaments, put on either by game producers, game players or independent bodies. The range of competitive games is, as you’d expect, huge, but they mostly fit within competitive categories; from the lesser-known computer-based multiplayer games, such as League of Legends and the aforementioned Dota 2, to major console gaming titles such as Call of Duty and the EA Sports FIFA Series.

ESports have long been part of gaming culture, but as this generation of tech-savvy gamers has grown up with high-speed Internet in conjunction with the growth of free-to-use video stream sites, such as YouTube and Twitch, the growth of the competition and consumption elements of eSports has sky-rocketed. We spoke with Kyle Bautista, General Manager of compLexity Gaming – one of the world leaders in competitive gaming – who told us: ‘Players and teams have been competing in these games for decades, but the problem was being able to expose a large enough audience to them to get people to know they existed, let alone sustain any substantial growth. The biggest contributor to the growth of eSports is likely Twitch and other livestreaming services.’

Following its growth in 2014, which saw its number of visitors surge by 513% from 371m to 1.9bn, Twitch was purchased by Amazon, and whilst the parent company’s influence has so far been minor, Twitch’s recent purchase of the company ‘Good Game’ – which manages eSports teams ‘Evil Geniuses’ and ‘Alliance’ and also curates eSports tournaments – suggests that Twitch is looking to integrate itself even further into eSports culture.

Amazon will be hoping to replicate Google’s success with YouTube (which sees successful content creators having their streams and videos sponsored by advertisers) on Twitch as a long-term monetisation programme. The advertising streaming option is beneficial as it promotes both great content creation from its users, as they receive a cut of the money, but also encourage brands to spend their valuable ad money on successful channels. To make Twitch as accessible as possible for brands, however, it has to rely on its predicted growth coming to fruition and provide detailed audience segmentation for brands to tap into.

Unlike traditional sports, whose history lies within live events and then TV or radio broadcast, eSports have grown out of an Internet-connected audience and their users exist almost exclusively online. Where big sporting rightsholders have been catching up with new Internet consumption habits, eSports were moulded by them and will continue to grow because of them. It’s unlikely that those habits are going to break, with Vice President of eSports at Riot Games Dustin Beck describing eSports fans as ‘a generation who aren’t consuming their content on TV’, going on to describe TV as ‘not a goal or a priority’.

These changing habits reflect the wider change in content consumption in the Western world: the same access of high Internet speeds that spawned the success of eSports also created a Netflix generation who watch what they want, when they want and on the platform of their choosing. In the future, as this generation matures, the consumption rates of eSports will continue to grow: it already surpasses the likes of NBA Finals and the MLB World Series in viewing figures.

The average eSports fan consumes 10.5 hours of content a week compared to traditional sports fans who watch 7.5 hours a week. Furthermore according to IHS, eSports video will bring in $300m in online advertising revenue alone in 2017, with consumption of eSports to double in size to 6.5bn.

Whilst the access to and usage of Internet-enabled devices has had a major part in the growth of eSports, so has the public perception of gaming as both a pastime and art form. Corporations such as Sony, Microsoft and Nintendo have helped power a global growth in console gaming, popularising a wealth of highly intelligent and beautifully designed games.

This, in conjunction with the proliferation of home PCs, has helped make gaming, as a mainstream activity, become more socially acceptable. As growth in ownership of powerful devices such as smart phones, tablets and consoles continues, so will the perception of gaming itself. For the masses, eSports still represent a niche corner of the more acceptable scene. As growth continues, however, this is likely to become a more widely accessed sporting event.

Where previously the sponsorship of eSports has been dominated by endemic brands such as Alienware – whose activations have been mostly restricted to logos on apparel and a few sponsored streams – we’re now seeing the likes of Coca-Cola, Red Bull and American Express stepping into the space and bringing their unrivalled sponsorship experience to the fore.

Coca-Cola has a large following on its @CokeESports Twitter account, delivering both a Millennial-focused platform for Coke Zero, alongside a few simple activations such as printing out fans’ League of Legends characters on bottles and cans at tournaments.

Meanwhile, American Express released personalised debit cards for fans, citing the hard to reach Millennial demographic being the exact reason for their sponsorship. ESports for these brands offer unique opportunities to access a global consumer audience, mostly Millennial, who are bypassing traditional advertising routes. For Bautista, these big brands create an entirely new proposition for eSports: ‘The addition of someone like a Coca-Cola, a MasterCard, or Nissan certainly brings a higher level of expectation to an event or team, but it also opens up more doors. The ability of a blue-chip company to create an extensive and innovative interaction between their world-renowned product and their targeted audience is what makes the non-endemic sponsors so exciting.’

It is debatable, however, how both the non-gaming public, Media and Government would welcome heavy brand investment in a move towards more sedentary ‘sporting’ activities. Here in the UK, the Government pushes a number of healthy living initiatives, notably Change4Life which encourages movement, whilst stories about the apparent ‘obesity crisis’ are never far away from the news.

Meanwhile, to the concern of many, sedentary gaming activity appears to be on the rise. A recent study by Nielsen revealed that on average US gamers play for 6.3 hours a week, an increase of over one hour since 2011; moreover a UK Government briefing reported that 55% of English boys play video games for two hours or more every day. Overly heavy brand sponsorship of this sedentary activity, therefore, has a certain risk factor; with the wrong PR and communications angle, it could have a negative impact on the brand’s relationship with both stakeholder groups. The latter especially might lead to a reduction in brand perception metrics, in particular trust.

Admittedly it is true that major sporting events, such as the FIFA World Cup or the Olympics, are often watched in sedentary (and arguably unhealthy) environments at homes and pubs. However, the key difference is that these traditional events have the potential to inspire movement (in children especially); Coca-Cola GB, for example gave away one million footballs during the 2014 FIFA World Cup, and McDonald’s, as a sponsor of the Home Nation FAs, are heavily involved in the grassroots game. ESports, on the other hand, lacks an obvious link to promote physical activity, over just simply inspiring more consumption of gaming and sedentary spectating. Sponsors, therefore, will have to work hard to come up with creative solutions if they are to fully justify their sponsorship with some important stakeholders.

Another point for consideration for brands must also be the perceived danger of video games on the psyche of young people. Over the past few years there has been a great deal of debate over the link between violent video gaming and real life aggression. Although Twitch users have to be aged 13+, and there are barriers (such as age gates and profanity filters) to underage consumption of adult-themed material and language, this is by no means foolproof. While the argument hasn’t been proved, the perception alone could damage a brand’s image; especially if the brand involved directly appeals to children and teens in other areas of their marketing.

ESports are the future, the next big sporting phenomenon set to eclipse some traditional properties in the coming years. 2015 has the potential to mark a dramatic shift in the sponsorship landscape, which provides a ripe opportunity for global brands to speak to millions of young people worldwide. It is a truly global platform that levels the playing field by taking no account of geo-political sensitivities.

Already, some big players are getting involved – Amazon’s purchase of Twitch TV is a sign of things to come – and more are sure to join the party in 2015. Now is the time, if done both sensitively and with due regard given to the dangers of encouraging sedentary behaviour, for brands to become synonymous with eSports before the wave crests.

Christian’s blog comes from Synergy’s Now, New & Next sponsorship outlook for 2015, which can be viewed in full here.

Corporate Japan Gets Behind Tokyo 2020 Olympic Sponsorship

It’s been quite a week on the sponsorship front for Tokyo 2020, which announced three new Tier One sponsors – Canon, NEC and Fujitsu – in 48 hours. Here’s a quick take on the implications for Tokyo 2020 and Olympic sponsorship.

1. Tokyo 2020 already has five Tier 1 sponsors – NTT and Asahi having signed up last month – putting it level with Rio 2016, which has however been marketing its domestic packages since 2009 whereas Tokyo has been in the market only since 2013. So it looks like Tokyo’s pace of sponsor acquisition is going to be more in line with London 2012 than with Rio 2016: as I’ve written previously, Rio 2016 has consistently lagged behind London 2012 in deal volume.

2. Early indications that Tokyo 2020 looks like living up to its bid promise of being a safe bet will no doubt prompt a collective sigh of relief at the IOC, given both Rio 2016′s well-publicised problems and the recent audit that revealed Pyeongchang 2018′s sponsorship and finances are in crisis. (Related point: Rio 2016 is yet to publish its accounts, in striking contrast to London 2012, which published annual financial statements. One to watch.)

3. Assuming that Tokyo 2020 is achieving its $128m Tier 1 sponsorship pricing, it has already surpassed the $568m Tier 1 revenue total projected in its candidature files, and is well on its way to surpassing its $958m total revenue projection. However, as I wrote back in September 2013 when Tokyo won the 2020 Games, these revenue projections were extremely cautious, and I continue to expect Tokyo to achieve sales of well over $1 billion, and perhaps as much as $2 billion if Japan’s economy remains stable. Remember however that these figures will include VIK, which Tokyo 2020 estimated would be 34% of sponsorship revenue, an unusually low VIK figure for a modern Games – London’s VIK figure was just under 55%.

4. Category boundaries are a key negotiating point in any sponsorship, but particularly in the Olympics, which always produces more than its fair share of obscure designations owing to the crowded dynamics of the Olympic sponsorship landscape. The latest batch of Tokyo 2020 sponsors continues proudly in this tradition – ‘Data Centre Hardware Provider’, ‘Specialist Public Equipment & Software Provider’ and so on – and a related curiosity is that none of the latest categories featured in Tokyo’s candidature file projections of what its Tier 1 categories would be, proving once again that bid books are more honoured in the breach than in the observance. Finally on categories, if I was a Panasonic shareholder I’d want to know why Panasonic’s new 2016-2024 TOP sponsorship agreement left the camera category open to Canon for Tokyo 2020, something that Canon is clearly already enjoying given its mischievous reference to ‘sharing the emotion’ in its Tokyo 2020 media releasePanasonic’s long-running Olympic tagline being ‘Sharing The Passion’.

5. Judging by Tokyo’s early success there will be many hotly-contested Tokyo 2020 sponsorship tenders, but arguably the most competitive will be for Tokyo’s automotive sponsorship, given the fiercely competitive Japanese auto marketplace, which grew 3.5% in 2014, and the numerous domestic and international brands operating in Japan. Only time will tell which brand emerges victorious, but candidates are sure to include Nissan, already heavily invested in the Olympics worldwide including in particular Rio 2016, and Japanese market leader Toyota, which made an untypically public and embarrassingly unfulfilled declaration that it intended to be Tokyo’s 2020′s first sponsor just before Tokyo’s final bid presentation. Watch this space…