US major sports leagues: can European fans boost the rejuvenation of their fanbase?

A few weeks ago, the new Major League Soccer (MLS) season started. Besides the sports aspect, the excitement around the beginning of a new season lies in the start of the new global exclusive media rights agreements with Apple. One of the key objectives of the deal is to drive engagement and interest in the MLS. First in the US, where the league is lagging behind, compared to the 4 major American leagues (MLB, NBA, NHL and NFL), even though soccer – women’s or men’s - is gaining traction. And also in Europe, where soccer content is king. But if we reverse the equation, how do major US Leagues, especially Major League Baseball and National Football League, mostly dedicated to American-centric sports (baseball being also very popular in Asia), try to reach out to both young and international fans?

The long-awaited involvement of tech giants in sports has never been this much a reality

Before shining at an international level, major leagues’ priority remains their media rights on domestic soil. Over the last three years, they secured long-term broadcasting contracts, that will last at least seven seasons (a length that would make their European counterparts jealous). Thus, the MLB and the National Hockey League have deals in place until 2028, and the NFL until 2033. Those deals are crucial for broadcasters, as sports remains one of the last cornerstones of live linear TV (with news). The vital character of sports and the intensity of the competition – should it be traditional cable networks or streamers – led to a massive increase in their rights value. For instance, NFL’s new media rights agreements (with ESPN, NBC, CBS, Fox and Amazon) are now worth around $10 billion a year, nearly the double of the previous cycle. The NBA should follow over the coming weeks and expects the new cycle to be worth at least the double of current arrangements with Disney and Warner Bros Discovery’s former Turner Sports.

The increase in the value of those deals is also crucial for leagues, as over half of their revenues are generated through selling broadcasting rights. In that sense, streamers’ interest in sports has turned out to be a tremendous opportunity for leagues to maintain stiff market competition and inflating costs, despite cord-cutting, and to monetize at high cost dedicated digital and streaming rights. Over the last months, all the tech giants (Apple, Amazon, Youtube) and media conglomerates’ streaming platforms (ESPN+, Peacock, Paramount+, HBO Max) have accelerated their involvement in the sports broadcasting market. But until now, none of the American leagues had selected a streamer as the main rightsholder, using agreements with traditional major cable networks as their safety net. That is what makes MLS’ deal with Apple so bold, committing to a 10-year exclusive broadcasting contract, on a global scale.

Reaching fans through new distribution channels

But this move must be seen in the light of each sport/league fan base’s demographics. With soccer being highly popular among youngsters in the US, MLS’s choice made perfect sense. This refers to the issue of major leagues being able to make their content attractive to younger generations. The MLB, whose fanbase is the oldest among major sports, is often pointed at as having problems attracting younger audiences in an increasingly fast-paced and competitive entertainment world. Different reasons can be mentioned, such as the length of the game. A more interesting one, linked to social media strategies, lies in the lack of promotion of superstars. As young consumers tend to appeal more to star-driven content than the game itself, the NBA and the NFL have succeeded in creating storytelling around their biggest players, becoming ambassadors for their sports. The disparities in leagues’ fanbases are reflected through their activity on social networks. For instance, the NBA is the league with the highest share of its social media followers coming from Instagram, accounting for 42% of the total.

Hence, MLS’ agreement with Apple is all the more decisive to maintain, drive or create with cord-cutters and the younger generations, not only in the US but especially abroad. Even though the rather prohibitive pricing of the MLS Pass might deter some potential new fans, it will be interesting to witness the development of MLS among the most tech-savvy international fans. But in an already overcrowded streaming and entertainment market, resorting to not subscription-based models seems relevant. In this sense, MLB’s launch of a FAST channel in Europe through the Sportstribal platform makes sense. Having access to replays of the game for free is a valuable and complementary proposition to BT Sport’s live coverage. If FAST has become a buzzword lately, major sports leagues have yet to follow the path, as their business model remains centered around premium subscription-based offers. Indeed, if we look at the listing of FAST channels in Europe, the most represented disciplines are fighting sports, motorsports, esports, and outdoor/adventure sports. Major leagues still lack visibility on FAST platforms, compared to niche sports. The choice of MLB echoes the opportunity that FAST brings to monetize old content and to either connect deeper with current fans or reach out to non-fans.

Delocalizing games, before delocalizing franchises?

The launch of the FAST channel is the latest illustration of MLB and other major American leagues’ focus on the European market. For a few years now, they have started to organize regular season games in Europe, usually in London but more recently in France (for the NBA) or in Germany (for the NFL). This phenomenon is nothing new, but until recently, targeted markets were mostly Asia or Mexico. Major League Baseball has committed to playing regular season games in London in 2023, 2024, and 2026. This sports delocalization appears as key in growing fan engagement internationally and continuing to develop the sports’ global footprint. Therefore, a further step would consist in expanding franchises into Europe. NFL commissioner Roger Goodell already stated that they could consider creating two franchises in London, and even a proper division in Europe.

Even though such an expansion cannot be expected before a few years, other recent initiatives have been undertaken by leagues to promote their product to younger and more international audiences. Investing in non-live content such as series or documentaries has become a necessity, as fans are increasingly consuming behind-the-scenes content or highlights. Regarding live, offering tailor-made and micro-transactions such as the NBA with the last quarter of a game, will contribute to fueling this new way of consumption. Finally, betting and gamification will also have their role to play to guarantee leagues’ relevance to a young and international public, and ultimately to make sure that the media rights deals, the leagues’ bread and butter, keep rising.

Guillaume Perrin | Senior Analyst at Dataxis

This research highlight is based on our data coverage of Sports, OTT and Video and TV Distribution in North America. Please contact us to get a demo and see the depth of our service. Discover  CTV Ad Days New York, the event dealing with CTV, FAST, AVOD, hybrid SVOD/ad-supported, addressable and programmatic advertising in North America.

Published on: Thursday, 25 May, 2023

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