Sports Media and OTT Platforms Quiz

Emerging Trends and Disruptive Forces in Sports

• Emerging trends and disruptive forces impacting professional team sports include breakaway leagues, OTT broadcasting platforms, private equity firms, governance and regulation reform, esports, cryptocurrency, Socios, NFTs, and the Metaverse.

Introduction

• Emerging trends and disruptive forces may affect the economic and financial landscape of professional team sports. These include:
  • Breakaway leagues
  • OTT broadcasting platforms
  • Private equity firms
  • Governance and regulation reform
  • Esports
  • Cryptocurrency, Socios, NFTs, Metaverse

Breakaway Leagues in Professional Team Sports

• Breakaway leagues are not a new concept, with examples including the English Premier League and Rugby League Super League.
• Modern breakaway league concepts are often driven by individual club interests rather than collective action.
• Most breakaway league proposals in football have been unsuccessful.
• The 2021 European Super League (ESL) proposal failed due to significant stakeholder backlash, including fans, players, and several national governments.
• The ESL's failure highlighted concerns about elitism, competitive balance and the lack of inclusivity in the competition format.

European Super League

• The ESL was a proposed seasonal club football competition contested by 20 European clubs.
• 12 of the founding members were among the biggest European clubs.
• The league was organized by a commercial enterprise aimed at rivaling the UEFA Champions League and
• aimed to improve the economic standing of the member clubs.
• The ESL proposed to have 12 founding members and 3 more invited, who would be permanent members governing the competition.
• Other clubs were invited but refused to accept the offer.
• The competition format involved a double round robin format for 18 group matches per team.
• The top three in each group would qualify for the quarterfinals.
• The remainder of the competition would take place in a four-week span.
• Revenue distribution model was created.

Broadcasting Platforms and Commercial Shifts

• OTT (Over-the-Top) streaming services, such as YouTube and Netflix, are changing how people consume sports content.
• OTT services provide content directly to viewers bypassing traditional TV providers,
• allowing for more personalized and personalized experiences.
• OTT is changing the viewing experience and revenue structure in sports.

Advantages of OTT Platforms

• OTT platforms offer hyper-personalization of sports viewing experiences through data analysis.
• The platform allows users to choose specific content and viewing methods independently of the content producers.
• Many features can be customized to a high degree.
• Users can now watch every shot played by any player in the PGA (Professional Golf Association) tournament, which benefits golf and other sports.

Advantages of OTT Platforms (cont.)

• Cost savings are possible with live streaming, with personnel potentially located at different locations.
• Additional content like behind-the-scenes documentaries are achievable with the live stream format.
• The shift to live streaming provides a benefit to fans and stakeholders.

Formula 1 and "Drive to Survive" on Netflix

• The Netflix series "Drive to Survive" focused on the drivers and races of the Formula One World Championship.
• The show first launched in 2019.
• Season four (2021) had the largest audience and attracted the top 10 rankings in over 50 countries.
• Viewership increased in the US.

Disruptive Potential of OTT

• Individual match passes can be purchased to access games, and there is debate around allowing clubs more freedoms in selling TV rights.
• Conversations have begun about removing the traditional TV blackout of matches.

Disruptions in Commercial Revenue

• Sponsorship of sports events may be impacted by ethical considerations and government regulations.
• In the past, tobacco and alcohol have dominated the sponsorship market, but this is now being challenged by newer demands.

Private Equity Firms

• Private equity firms are an alternative form of financing that don't utilize public markets.
• They invest in and manage companies using funds from institutional investors.
• Investment and management fees are charged to investors.

Private Equity Firms (cont.)

• Private equity investment can lead to company improvements relating to competition formats, cost control, and commercial revenue generation.
• There are potential benefits in terms of liquidity and venture capital supporting early-stage development outside the public markets.
• Drawbacks of private equity investments include the difficulty in liquidating holdings and the necessity of finding buyers in the first place.

Governance and Regulation Reform

• UEFA's Financial Fair Play reform aims to ensure Financial Sustainability.
• Rules have changed regarding deviation from break-even rules for losses, squad costs, and commercial contracts.
• UEFA has taken actions against clubs for suspected inflated commercial dealings.

Multi-Club Ownership

• Clubs are increasingly owned by large, multi-sport groups.
• Groups like City Football Group and Fenway Sports Group own multiple clubs in different sports.

Esports

• The esports market is growing rapidly, with predicted revenue figures exceeding $1.6 billion in 2024.
• Esports leagues are emerging that resemble established professional sports like the NBA and NFL.
• Many big professional European and American football clubs have their own esports divisions.
• A number of professional athletes have entered or become more involved in this area.

Esports and Sports Leagues

• Partnerships between established sports leagues and esports entities, like the NBA, are growing.
• This structure is intended to create more stability and profitability opportunities for these entities.

Esports and Sports Clubs

• Professional teams like Wolverhampton Wanderers have expanded their brands and following using esports.
• This is now a significant tactic used by many teams.

Esports and Athletes

• Professional athletes, such as Jesse Lingard and David Beckham, are investing in or creating their own esports teams.
• The opportunities for athletes to invest in this area are potentially significant and ever-evolving.

Cryptocurrencies

• Many sports and teams partner with cryptocurrency firms, including major sponsorships with leading teams.

Socios (Fan Tokens)

• Socios.com provides fans with voting rights on club decisions using fan tokens operated via cryptocurrency exchange platforms.
• This platform has the potential for clubs to capture revenue by creating engagement via interactions with fans.

Non-Fungible Tokens (NFTs)

• NFTs are unique digital assets representing real-world objects.
• In sport, NFTs allow fans to own pieces of content or memorabilia relating to their favourite athletes.
• Artists and content creators can use NFTs to directly engage with fans and monetize their creations.

NFTs in Sport

• Specific clubs have been among the first to use NFTs.
• Notable examples include Legia Warsaw in European football and many more American leagues.

Pitfalls of the Crypto World

• Issues in the crypto markets include the volatility of assets, potential fraud, and regulatory uncertainty.
• There are concerns relating to the legitimacy, stability and transparency of some crypto-related organisations.

Into the Metaverse

• The metaverse is a virtual world offering unique fan experiences and potentially significant revenue streams.
• The possibility of clubs creating virtual stadium environments that fans can interact with is a relatively new prospect.

Test your knowledge on the evolving landscape of sports media, focusing on OTT platforms, competition restructuring, and the influence of technology. This quiz covers key concepts such as the metaverse, streaming experiences, and partnerships in professional sports.