Fun with media consolidation; Job loss euphemisms; What's the point of the Olympic Channel; Ecclestone wasn't wrong; Golf's Super League comms defence; No such thing as an old format idea
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Big Media consolidation is going to be every bit as much fun as it sounds
What happened?
WarnerMedia and Discovery have formed the world’s second largest media company by revenue, second to Disney. The Economist noted that, ‘the $19bn that the two companies spent on content last year was more than both Disney and Netflix’.
Why do we care?
Good people will lose their jobs, they always do, with the added indignity of being hidden beneath a variety of Linkedin-esque euphemisms: “$3 billion in expected [annual] cost synergies”. Never underestimate the casual cruelty of bureaucrats.
Sport is down the to-do list, but there’s some big rights in the new portfolio, with talk of them being ‘true differentiators of the future’. Never heard ice hockey called that before.
Where’s it going?
The magic number is four: The average American subscribes to four streaming services. And this will probably fall post-Covid. So the key question for the streamers, and the sports they carry, is obvious: are you in or out?
This deal carries some questionable underlying assumptions: Much of the early analysis is on the North America market, mainly because the numbers are easier to source and is where both firms are based. The theory runs that the winners of the streaming wars will have a global footprint, with deep enough pockets to outspend rivals in the money pit that is the video content market and spread the risk across territories. So, America is the starting point, where the thinking gets done, then rolled out. This needs strong devolved decision making, or it all ends up like the infamous Friends ‘London episodes’, all Big Ben, red buses and Dick Van Dyke cockney accents.
Global bundles are boring: The macro argument is easy to understand, but sport can be irritatingly local. That’s why Sky works and Discovery Eurosport is irrelevant. AT&T ended up licensing much of its content to Sky, so never built its own first person database locally. Discovery can help with that problem, a bit. But what rights would it need to buy to achieve a genuine foothold in the UK? The Premier League just renewed. Does anything else move that dial? Ask BT, or DAZN.
Rich get richer, you read it here first. Fewer, bigger media conglomerates chasing fewer, bigger sports rights holders. Sounds familiar.
What’s the point of the IOC’s Olympic Channel btw? Discovery’s headline sports asset is the Olympics, courtesy of the rights contract in place with the International Olympic Committee (IOC) covering 50 European territories in a €1.3 billion (US$1.5 billion) deal until 2024. But the Games is hardly the fodder to build a week by week streaming audience, particularly given the presence in the landscape of the IOC’s own D2C play, The Olympic Channel. Launched in 2016, I’m still not sure what role this plays: does it ‘take the game to a new audience’ or crowd out the market and turn rights holding media partners into competitors? Meanwhile, rumours of an IOC - Amazon hookup persist. So perhaps expect to see the Olympic Channel on Prime.
Old news: Bernie Ecclestone had a point
A graph from this week’s Washington Post reminded me of Bernie Ecclestone.
In 2014, Ecclestone was mocked for his views on sports marketing’s youth obsession.
Ecclestone: "I'm not interested in tweeting, Facebook and whatever this nonsense is. I tried to find out but in any case I'm too old-fashioned. I couldn't see any value in it. And, I don't know what the so-called 'young generation' of today really wants. What is it?
Now, you're telling me I need to find a channel to get this 15-year-old to watch Formula 1 because somebody wants to put out a new brand in front of them? They are not going to be interested in the slightest bit.
Young kids will see the Rolex brand, but are they going to go and buy one? They can't afford it. Or our other sponsor, UBS — these kids don't care about banking. They haven't got enough money to put in the bloody banks anyway.
That's what I think. I don't know why people want to get to the so-called 'young generation'. Why do they want to do that? Is it to sell them something? Most of these kids haven't got any money.
I'd rather get to the 70-year-old guy who's got plenty of cash. So, there's no point trying to reach these kids because they won't buy any of the products here and if marketers are aiming at this audience, then maybe they should advertise with Disney."
Sports format ideas never die, they just come back with Saudi money attached, part one
Super League Golf
1994: Greg Norman reveals a proposal for the first World Golf Tour, a limited field eight event series, guaranteeing prize money to the best players from the Official World Golf Rankings.
2021: Eleven leading players, including world number one Dustin Johnson and Britain's Olympic champion Justin Rose, have reportedly been offered contracts worth $30-$50m (£21.5-£36m) up front if they sign for the Saudi Arabia-backed super league project.
Dissecting the Tours’ comms defence:
They’re pulling three levers: history, morality and admin.
History - Key message, play in the super league and you won’t be teeing it up at The Masters (see previous note re, Punishment Tropes). Rory McIlroy seemed to be talking straight from the PGA Tour playbook, "We still talk about Gene Sarazen and Walter Hagen and Ben Hogan and all those guys because that's what this game is. It's steeped in history and the legacies that those guys have.
Human rights - shorthand, it’s Saudi Arabia, ffs. Quote from Amnesty International spokesman Felix Jakens:
Saudi Arabia is "sinking vast sums into sport as part of a strategy to 'rebrand' the country. It isn't just the similarity with the European Super League that may cause consternation among golf fans and the wider public, it's the fact that once again Saudi Arabia appears to be going full throttle with its sportswashing efforts. Any golfer tempted by a lucrative Saudi-backed tournament ought to be ready to speak out about human rights."
Admin - The Official Golf World Rankings is incomprehensible. Nobody knows or cares how it works. But just as Al Capone got done on tax, the OGWR could be enough to see off the golf super league. From Ewan Murray in The Guardian:
Tournaments on a tour must average fields of at least 75 players over the course of each season.” On this rule, the proposed tour clearly falls short; their 14 planned tournaments are for just 48 players.
However, this last point helps illustrate the basic pain point that any super league is attempting to exploit. Your view on the average size of the fields depends largely from which end of the world rankings you’re looking.
As Nathan Homer - former CCO of the European Tour, put it on UP Pod #67: Very few golfers sell tickets. Probably fewer than twenty, probably nearer ten. The Tours have a basic strategic problem that makes them vulnerable. They are membership clubs, they exist to serve their members, the players. All the players. As long as that’s the case, a breakaway threat is always there.
Sports format ideas never die, they just come back with Saudi money attached, part two
Two year World Cup cycles
From Graham Dunbar at AP:
Fwiw, I’m unsure of whether a biennial women’s World Cup would be good or not good.
My prior assumptions are based on the need for the women’s game to create famous club brands that drive week in week out followership.
So, does a more frequent Women’s World Cup crowd out the club game or promote it?
Answers, postcard.
Formats Unpacked is a great format
Hugh Garry of Storythings does a newsletter on media and other types of format. It’s really good.
Start with his latest piece: 10 Things I Learned About Brilliant Formats
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