I found this a fascinating article. Not everyone's taste but definitely a good read.
Wont happen anytime soon, but in 10-15 years time ? Like in cricket
Copy Pasting from the Athletic
At a recent conference hosting more than 140 club delegates from Europe and beyond, an executive presented the room with one glaring and troubling statistic.
During the 2018-19 season, the live match audience for Champions League football dropped from an average of two billion during the previous three-year cycle to 1.3 billion in the last campaign. In a single year, therefore, the Champions League experienced a traditional television audience fall of 35 per cent. The Europa League also experienced a 17 per cent drop.
For the sport’s most vaunted club competition, this is a concerning trend and insiders suggest that the evidence from the early stages of this European campaign is that the pattern will continue. For a long time, the economic security of football has depended on its ability to capture extraordinary deals for television rights but as traditional audiences tail off, tension is growing in the boardrooms of Europe’s leading clubs.
Last summer, European clubs spent in the region of £6.67 billion on player transfers but intermediary costs and transfer factoring takes this figure up towards £9 billion. Six of Europe’s top 10 leagues (Italy, Spain, Belgium, Germany, Holland and Portugal) broke their spending records. Yet while transfer activity is the highest on record, so too is the percentage of transfer spend set against revenue. “It all paints a picture of increased risk,” a director says. “If television revenue slows down and clubs have depreciating assets they can’t deal with on the balance sheets, then cash problems become more common.”
This is a fast-changing industry and European football has, for the past few decades, adapted. European club revenues have grown, on average, by 4.4 times over the past 20 years.
“This is unheard of in other entertainment industries,” says one source close to UEFA. “This level of sustained high inflationary growth is very rare. But now we have a challenge. We are living in the age of choice and gone are the days when the match on Saturday played in the local stadium is the main source of attraction. There are a plethora of platforms and markets to find and we are in danger of losing fans if they are not captured at an early age.”
The worries are clear. A 2019 report by consultancy firm PricewaterhouseCoopers has found that sporting leaders consider a shift away from traditional television consumption to constitute the biggest threat to sporting revenues, with 65.6 per cent of respondents identifying this as a concern.
In 2018, a different PwC report declared that “threats abound from shifts in consumer behaviour.” Most of these perceived threats will not surprise. A shift in consumer behaviour from younger fans, access to alternative entertainment content, a decreased willingness to pay for sports content and piracy/illegal streaming were identified as obvious worries. Yet the one causing most introspection is access to younger audiences, with this issue up from 56 per cent the previous year to 71 per cent in 2018.
The PwC report warns: “This comes as no surprise, as recent studies have shown that younger generations are transitioning their entertainment time away from traditional TV in favour of mobile devices. Understanding their behaviour is a top priority for the industry and sports content and distribution channels will increasingly need to be tailored to their preferences.”
There is an obvious question that follows: What are these preferences and how far does sport go to capture these audiences? The 2019 report found that 94 per cent of sport industry leaders believe “innovation is important or very important for sport organisations”. Yet what does innovation mean?
A review by academics from Oxford University, Kings’ College London, Harvard University and Western Sydney University found that attention times are shortening while Ofcom found earlier this year that the average British adult is now spending 50 whole days per year online. An explosive and unspoken question, therefore, stalks the mind of football executives: Is a 90-minute football match really the long-term format for the sport?
“It is a very valid question to ask,” says one executive. “When fans engage, what behavioural characteristics are they exhibiting? How long do they remain attentive? Do they switch over? What is their moment of gratification? Is 90 minutes of live football really the right product for that?”
Consider, for example, that last weekend’s Manchester derby on Sky Sports enjoyed a peak audience of 2.4 million on Saturday night. Yet three YouTube videos of highlights shown by Sky’s official channel, plus United and City’s club ones, had a combined audience of 5.7 million less than a week after the game. None of those videos exceeded three minutes and seven seconds.
It is not all bad news for the live television market. Sky’s figures are UK alone, while digital and social engagement is growing at an astronomical rate for the Champions League. The rights’ industry is currently being safeguarded, to an extent, as tech firms such as Amazon, DAZN and Facebook explore the market and add competition. But there is uncertainty. There is no doubt that live sport remains hugely popular — one poll of young people aged 16-20 last year recorded 90 per cent of respondents watching live through online platforms — but the question is whether the product could be more engaging.
For many reading this, talk of altering football will provoke shudders and visions of a dystopia. Are these conversations really happening? The executive, who has a seat at a number of meetings with European’s most influential clubs, explains: “Absolutely, they do. A lot of well-resourced clubs now have professionals coming in from other industries who analyse football in a fresh-eyes, analytical way. They have people ask questions that otherwise would not be considered, matters considered sacred cows. At the moment they are brainstorming. There is no serious movement about to fundamentally change the nature of the game but it is only a matter of time. Is that five years or is that 50 years? It has to be a matter of time.”
How this plays out in reality will surely be a long game. Clubs and their supporters are conservative in defending the traditions of their sport, even if attention spans suggest more adventurous ideas such as high-paced, shorter-length games would guarantee new audiences and appease broadcasters who seek to maintain subscriptions.
Players themselves are recognising the need to appease a rapid-sharing social media generation.
One Championship footballer told me a story recently about how he had been advised by his commercial agent to do tricks and flicks during competitive games to increase his commercial value. The theory, he explained, was that if he performs a nutmeg, it will be edited for Instagram or Twitter, his following will increase and his personal brand improves.
This idea of young people following players over teams and competitions is solidifying. An example can be seen in the current strategy for Champions League consumption in Brazil.
One source close to UEFA says: “This is something to consider with the downturn in the figures. TV Globo — the free to air broadcaster in Brazil — where we were reaching 40 million, ceased to become the rights holder between cycles. It went to Esporte Interativo in partnership with Facebook in Brazil. But the viewing went down, even though some games are available for free.
“An interesting dynamic emerged. It was the first time Facebook was a live-rights holder. The initial agreement mandated that the stream was on a Facebook UEFA competition page. Facebook then came to UEFA and said, ‘This is not reflecting how people use our platform. Wouldn’t it be better if Inter Milan vs Dortmund, for example, we could stream the game on Inter and Dortmund’s Facebook pages, as well as UEFA’s, so we can capture competition fans and the team’s fans?’ But then they also came and said it would be good to explore putting it on players’ pages. Are we fans of competitions, clubs or players?”
As individual players become, in some case, more commercially appealing than clubs, is it completely absurd, therefore, that the product changes to suit this? To suggest football devises new formats, such as cricket’s Twenty20 and Indian Premier League or rugby’s seven-a-side competitions? Could there be more moderate changes, such as the lower-ranked club always playing at home in FA Cup or Carabao Cup ties? The Champions League group stage is one example of a format that feels tired and in need of a shake-up.
Jamie Maclaurin, an esports agent at Veloce Esports, says: “The patience for watching and consuming is simply not going to be there. Cricket had to change drastically and my honest opinion is that too many people who operate in the football market can’t see the need for change. Remember when Ronaldinho and FIFA and Joga Bonito came along? This was an obvious idea, a five vs five tournament of the best players. I can’t see it happening, but it absolutely should.”
A leading television executive says: “It is absolutely the case that Sky and BT in the UK, as well as Facebook globally, have sport-strategy teams, analysing how people watch and engage. At Sky, they identified a long time ago that the numbers around discussion pre-match and post-match are not doing what they once did. They also outlined that sports fans want the second-screen experience, whether that is following Twitter or Facebook on their phone at the same time as watching or even watching two games at once.
“There were never serious discussions around doing things like eight vs eight games as the broadcaster has always been in a position where football has the power and is in demand from other television platforms. We could be approaching a turning point for that. Other sports such as darts, tennis, rugby league and Formula 1 have been far more beholden to format changes by television companies and this will happen with football too. I do not expect this in the initial stage to happen with the big leagues but take the Scottish Premiership: they were always very keen to do whatever broadcasters wanted to protect the revenue of clubs. I remember times they were open to becoming a summer league. They would play in the middle of the night if it was right for broadcasters.”
European clubs do admire a step taken by broadcasters in America, where the National Basketball Association and Turner Broadcasting announced a new “fourth quarter pass” scheme by which people could purchase a portion of an in-progress game. This means fans can purchase the remainder of a game once the buzzer sounds for the end of the third quarter.
A football equivalent would go a little bit like this: It’s the Manchester derby. United were 2-0 up but, in the 65th minute, City have pulled one back. Fans could then purchase the final 25 minutes for a couple of pounds and watch the most intense period of the match. “We imagine a situation where a fan has dinner at 8pm and only has 30 minutes and can choose to buy half-an-hour of a game,” said NBA commissioner Adam Silver in 2018.
Is it so much of a stretch, therefore, to suggest that those leagues squeezed out and asset-stripped of their finest talent by the top five leagues, could be ripe for product disruption? Consider, for example, that 96 per cent of the 250 most valuable players are concentrated in the top five leagues of Europe and distributed across only 50 clubs. Football is a story, therefore, of increasing consolidation across the hands of the few and clubs outside a tightening elite must adapt to survive. It is why UEFA are keen to introduce a third tournament that allows more clubs participation and relevance in European competition but, amid falling live audiences, is there really the public appetite?
On the flipside, larger, more successful clubs are seeing television audiences drop and this will only intensify speculation around a European Super League that safeguards their elite.
“Consider this,” says one director. “Barcelona played Slavia Prague in the Champions League group stage. Slavia’s budget is £40 million and Barcelona’s is £1 billion-and-40 million. That is the Champions League group stage. What do we think about that? Is it right? Barcelona won’t sell out the Nou Camp for that game, which is a disaster. They can’t get players motivated for the game. For Barcelona, it is a massive spiral but for Slavia, they have nothing to lose.
“Then, we cling to the one occasion it creates a shock and Slavia win. The populist view is: of course it is good, that is what we need, the underdog against the big boy. The industrialist view is that it is not good, every Barcelona game should be top-billing, satisfying fans and exciting players. Then it gets tied up in discussions about solidarity. For now, it is secure.”
But for how much longer?
Wont happen anytime soon, but in 10-15 years time ? Like in cricket
Copy Pasting from the Athletic
At a recent conference hosting more than 140 club delegates from Europe and beyond, an executive presented the room with one glaring and troubling statistic.
During the 2018-19 season, the live match audience for Champions League football dropped from an average of two billion during the previous three-year cycle to 1.3 billion in the last campaign. In a single year, therefore, the Champions League experienced a traditional television audience fall of 35 per cent. The Europa League also experienced a 17 per cent drop.
For the sport’s most vaunted club competition, this is a concerning trend and insiders suggest that the evidence from the early stages of this European campaign is that the pattern will continue. For a long time, the economic security of football has depended on its ability to capture extraordinary deals for television rights but as traditional audiences tail off, tension is growing in the boardrooms of Europe’s leading clubs.
Last summer, European clubs spent in the region of £6.67 billion on player transfers but intermediary costs and transfer factoring takes this figure up towards £9 billion. Six of Europe’s top 10 leagues (Italy, Spain, Belgium, Germany, Holland and Portugal) broke their spending records. Yet while transfer activity is the highest on record, so too is the percentage of transfer spend set against revenue. “It all paints a picture of increased risk,” a director says. “If television revenue slows down and clubs have depreciating assets they can’t deal with on the balance sheets, then cash problems become more common.”
This is a fast-changing industry and European football has, for the past few decades, adapted. European club revenues have grown, on average, by 4.4 times over the past 20 years.
“This is unheard of in other entertainment industries,” says one source close to UEFA. “This level of sustained high inflationary growth is very rare. But now we have a challenge. We are living in the age of choice and gone are the days when the match on Saturday played in the local stadium is the main source of attraction. There are a plethora of platforms and markets to find and we are in danger of losing fans if they are not captured at an early age.”
The worries are clear. A 2019 report by consultancy firm PricewaterhouseCoopers has found that sporting leaders consider a shift away from traditional television consumption to constitute the biggest threat to sporting revenues, with 65.6 per cent of respondents identifying this as a concern.
In 2018, a different PwC report declared that “threats abound from shifts in consumer behaviour.” Most of these perceived threats will not surprise. A shift in consumer behaviour from younger fans, access to alternative entertainment content, a decreased willingness to pay for sports content and piracy/illegal streaming were identified as obvious worries. Yet the one causing most introspection is access to younger audiences, with this issue up from 56 per cent the previous year to 71 per cent in 2018.
The PwC report warns: “This comes as no surprise, as recent studies have shown that younger generations are transitioning their entertainment time away from traditional TV in favour of mobile devices. Understanding their behaviour is a top priority for the industry and sports content and distribution channels will increasingly need to be tailored to their preferences.”
There is an obvious question that follows: What are these preferences and how far does sport go to capture these audiences? The 2019 report found that 94 per cent of sport industry leaders believe “innovation is important or very important for sport organisations”. Yet what does innovation mean?
A review by academics from Oxford University, Kings’ College London, Harvard University and Western Sydney University found that attention times are shortening while Ofcom found earlier this year that the average British adult is now spending 50 whole days per year online. An explosive and unspoken question, therefore, stalks the mind of football executives: Is a 90-minute football match really the long-term format for the sport?
“It is a very valid question to ask,” says one executive. “When fans engage, what behavioural characteristics are they exhibiting? How long do they remain attentive? Do they switch over? What is their moment of gratification? Is 90 minutes of live football really the right product for that?”
Consider, for example, that last weekend’s Manchester derby on Sky Sports enjoyed a peak audience of 2.4 million on Saturday night. Yet three YouTube videos of highlights shown by Sky’s official channel, plus United and City’s club ones, had a combined audience of 5.7 million less than a week after the game. None of those videos exceeded three minutes and seven seconds.
It is not all bad news for the live television market. Sky’s figures are UK alone, while digital and social engagement is growing at an astronomical rate for the Champions League. The rights’ industry is currently being safeguarded, to an extent, as tech firms such as Amazon, DAZN and Facebook explore the market and add competition. But there is uncertainty. There is no doubt that live sport remains hugely popular — one poll of young people aged 16-20 last year recorded 90 per cent of respondents watching live through online platforms — but the question is whether the product could be more engaging.
For many reading this, talk of altering football will provoke shudders and visions of a dystopia. Are these conversations really happening? The executive, who has a seat at a number of meetings with European’s most influential clubs, explains: “Absolutely, they do. A lot of well-resourced clubs now have professionals coming in from other industries who analyse football in a fresh-eyes, analytical way. They have people ask questions that otherwise would not be considered, matters considered sacred cows. At the moment they are brainstorming. There is no serious movement about to fundamentally change the nature of the game but it is only a matter of time. Is that five years or is that 50 years? It has to be a matter of time.”
How this plays out in reality will surely be a long game. Clubs and their supporters are conservative in defending the traditions of their sport, even if attention spans suggest more adventurous ideas such as high-paced, shorter-length games would guarantee new audiences and appease broadcasters who seek to maintain subscriptions.
Players themselves are recognising the need to appease a rapid-sharing social media generation.
One Championship footballer told me a story recently about how he had been advised by his commercial agent to do tricks and flicks during competitive games to increase his commercial value. The theory, he explained, was that if he performs a nutmeg, it will be edited for Instagram or Twitter, his following will increase and his personal brand improves.
This idea of young people following players over teams and competitions is solidifying. An example can be seen in the current strategy for Champions League consumption in Brazil.
One source close to UEFA says: “This is something to consider with the downturn in the figures. TV Globo — the free to air broadcaster in Brazil — where we were reaching 40 million, ceased to become the rights holder between cycles. It went to Esporte Interativo in partnership with Facebook in Brazil. But the viewing went down, even though some games are available for free.
“An interesting dynamic emerged. It was the first time Facebook was a live-rights holder. The initial agreement mandated that the stream was on a Facebook UEFA competition page. Facebook then came to UEFA and said, ‘This is not reflecting how people use our platform. Wouldn’t it be better if Inter Milan vs Dortmund, for example, we could stream the game on Inter and Dortmund’s Facebook pages, as well as UEFA’s, so we can capture competition fans and the team’s fans?’ But then they also came and said it would be good to explore putting it on players’ pages. Are we fans of competitions, clubs or players?”
As individual players become, in some case, more commercially appealing than clubs, is it completely absurd, therefore, that the product changes to suit this? To suggest football devises new formats, such as cricket’s Twenty20 and Indian Premier League or rugby’s seven-a-side competitions? Could there be more moderate changes, such as the lower-ranked club always playing at home in FA Cup or Carabao Cup ties? The Champions League group stage is one example of a format that feels tired and in need of a shake-up.
Jamie Maclaurin, an esports agent at Veloce Esports, says: “The patience for watching and consuming is simply not going to be there. Cricket had to change drastically and my honest opinion is that too many people who operate in the football market can’t see the need for change. Remember when Ronaldinho and FIFA and Joga Bonito came along? This was an obvious idea, a five vs five tournament of the best players. I can’t see it happening, but it absolutely should.”
A leading television executive says: “It is absolutely the case that Sky and BT in the UK, as well as Facebook globally, have sport-strategy teams, analysing how people watch and engage. At Sky, they identified a long time ago that the numbers around discussion pre-match and post-match are not doing what they once did. They also outlined that sports fans want the second-screen experience, whether that is following Twitter or Facebook on their phone at the same time as watching or even watching two games at once.
“There were never serious discussions around doing things like eight vs eight games as the broadcaster has always been in a position where football has the power and is in demand from other television platforms. We could be approaching a turning point for that. Other sports such as darts, tennis, rugby league and Formula 1 have been far more beholden to format changes by television companies and this will happen with football too. I do not expect this in the initial stage to happen with the big leagues but take the Scottish Premiership: they were always very keen to do whatever broadcasters wanted to protect the revenue of clubs. I remember times they were open to becoming a summer league. They would play in the middle of the night if it was right for broadcasters.”
European clubs do admire a step taken by broadcasters in America, where the National Basketball Association and Turner Broadcasting announced a new “fourth quarter pass” scheme by which people could purchase a portion of an in-progress game. This means fans can purchase the remainder of a game once the buzzer sounds for the end of the third quarter.
A football equivalent would go a little bit like this: It’s the Manchester derby. United were 2-0 up but, in the 65th minute, City have pulled one back. Fans could then purchase the final 25 minutes for a couple of pounds and watch the most intense period of the match. “We imagine a situation where a fan has dinner at 8pm and only has 30 minutes and can choose to buy half-an-hour of a game,” said NBA commissioner Adam Silver in 2018.
Is it so much of a stretch, therefore, to suggest that those leagues squeezed out and asset-stripped of their finest talent by the top five leagues, could be ripe for product disruption? Consider, for example, that 96 per cent of the 250 most valuable players are concentrated in the top five leagues of Europe and distributed across only 50 clubs. Football is a story, therefore, of increasing consolidation across the hands of the few and clubs outside a tightening elite must adapt to survive. It is why UEFA are keen to introduce a third tournament that allows more clubs participation and relevance in European competition but, amid falling live audiences, is there really the public appetite?
On the flipside, larger, more successful clubs are seeing television audiences drop and this will only intensify speculation around a European Super League that safeguards their elite.
“Consider this,” says one director. “Barcelona played Slavia Prague in the Champions League group stage. Slavia’s budget is £40 million and Barcelona’s is £1 billion-and-40 million. That is the Champions League group stage. What do we think about that? Is it right? Barcelona won’t sell out the Nou Camp for that game, which is a disaster. They can’t get players motivated for the game. For Barcelona, it is a massive spiral but for Slavia, they have nothing to lose.
“Then, we cling to the one occasion it creates a shock and Slavia win. The populist view is: of course it is good, that is what we need, the underdog against the big boy. The industrialist view is that it is not good, every Barcelona game should be top-billing, satisfying fans and exciting players. Then it gets tied up in discussions about solidarity. For now, it is secure.”
But for how much longer?