In late 2019, Peter Hutton (director of global sports partnerships, Facebook) told Digiday that despite widespread anticipation the tech giant (along with Amazon and Google) would become a serious player for exclusive national broadcast rights to the big four sports leagues, the company has no plans to pursue them “in the near future.” Instead, the social media and technology giant will work with pro sports teams and leagues to help them build their fan bases and grow incremental revenues. Hutton explained that the platform’s reach and social elements “can help rights holder monetize their audience [above and beyond rights fees]. [Facebook] can be a free-to-air funnel [to generate ticketing, subscription and merchandising sales.]”
Howie Long-Short: The transition from linear television to digital is slow (if steady) and with behavioral data showing social platforms haven’t “lent themselves well to long-form content consumption” one can understand why Facebook is hesitant to pour billions into rights fees. But it’s inaccurate to characterize the company as having abandoned their live sports content strategy. Several years remains on many of their existing broadcast deals (see: La Liga in India, UEFA Champions League in Latin America) and the social network remains committed to learning more about the types of content and formats that work best on their 2.5 year old video platform (Watch).
It didn’t take Facebook long to realize that serving up a differentiated broadcast (think: interactive) is the key to drawing viewers (not maintaining exclusive rights), which explains why the company has begun to sub-license some if its live sports programming back to linear broadcast networks (which in turn helps to off-set some of the costs). But Facebook’s decision to sub-license content wasn’t financially driven; the company believes that by offering fans the chance to watch games on both linear television and the Watch platform, viewers can migrate to the OTT service at their own pace (there was strong pushback from older MLB fans when the league forced the medium change on them with exclusive Facebook broadcasts during the 2018 season). While the strategy sounds logical enough from the Facebook perspective, it’s reasonable to assume the company’s league partners support it too; it simply gives them the chance to reach a wider audience.
In addition to select live rights, Facebook offers sports fans short-form game recaps (+ some shoulder programming). The propensity fans have to both consume and share highlights and the platform’s native ability to facilitate social interaction and engagement has made Watch a desirable place for rights holders to place content (MLS announced a deal to license recaps of every match to Facebook on Wednesday, the league joins the NFL, NBA, MLB and PGA Tour in doing so). But pro sports leagues shouldn’t just be looking at Watch as another distribution outlet (and not just because of their ability to reach a global audience). Facebook provides rights holders with sophisticated marketing tools – that can be used to grow revenues – that do not exist within the traditional one-to-many broadcast environment. As a several MLB clubs have found, serving up ads to individuals who have engaged with free-to-air video content is an effective way to drive ticket sales. The four clubs who used Facebook’s retargeting capabilities during the 2018 season combined to generate +/- $500,000 in new sales, with each achieving a positive ROI on their advertising spend (some saw a return as high as 10x). The Miami Dolphins implemented a similar program during the 2017 season and reported that 25% of new season ticket memberships sold during the campaign originated via Facebook ads. Other teams/leagues/companies have successfully retargeted viewers of social video content and converted those leads into increased merchandise sales, subscriptions (UFC sold 1,000 Fight Pass subs in Germany and saw a 4x ROI on the campaign) and app downloads (TB12 +56.7%).
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