Athletics and Television

Ingredients for Successful Partnerships

Index

1. About MnS Ignite

2. European Television Market

3. European TV Sports Market

4. Position of Athletics

5. Ingredients for Successful Partnerships

MnS IGNITE Athletics & Television

About MnS Ignite

Activities

Sports Project Development • Events, Programs, Platforms

Consultancy • Media Rights Exploitation

• Commercial Strategies

• Competition Optimisation

• Production Aspects

Implementation

Network

Customers

• Media Companies

• Sports Federations

• Intermediaries

Specialist Network

• TV Production & Digital Media

• Sports Marketing

• Event Management

There are 3 Types of Organisations:

Those who make things happen.

Those who watch things happen.

Those who wonder what happened.

Anonymous

MnS IGNITE Athlethics & Television

European TV Market Broadcaster Revenue Trend 2011-2015

Slow Market Growth (1.9%)

MnS

IGNITE Athletics & Television

20.9 21.3 21.7 22.1 22.6

35.2 37.6

40.3 41.7 42.7

34.5 36.5

38.3 39.3 41

0

5

10

15

20

25

30

35

40

45

2011 2012 2013 2014 2015

Public Funding

Advertising

Subscription

SOURCE: IDATE WORLD TELEVISION REPORT 2011

European TV Market Shift of Revenue Streams

Stagnating PSB Revenue

Volatile Advertising Revenue • Growth until crisis 2008

• Slow recovery (some regions only)

Pay TV dominates • Pay TV/PPV

• Cable retransmission fees

• Online revenue

MnS IGNITE Athletics & Television

37

40

24

European TV Revenue 2013 (%)

Advertising

Pay TV

Public Funding

European TV Market Advertising: Stagnation in Traditionnal Segments

MnS IGNITE Athletics & Television

European TV Market More Restrictions for Public Service Broadcasters

Budget Restrictions • Budget Cuts (European debt crisis) (e.g. GRE & POR)

• Stagnating or declining license fees (e.g GBR & GER)

• Uncertain funding through new advertising or telecom taxes (e.g FRA & ESP)

Advertising Restrictions • Prohibition of advertising (e.g ESP, GBR)

• Less commercial airtime and fewer advertising windows (e.g FRA, GER)

• Online advertising restrictions or prohibition

Restrictions of Program Offerings • Closure of channels

• Program restrictions (e.g.: no sport)

• No expansion of offerings (channels, programs)

• Limitations for online offerings

MnS IGNITE Athletics & Television

European TV Market Fragmentation

8000 channels in Europe!

Over 400 Sports Channels • Pay TV with premium sports

• FTA channels for minority sports

• Special case Eurosport

Massive Growth of HD Channels • Attractive network distribution fees

• Higher ARPU for Bouquets

Rapidly growing Online Offering • Media Enterprises

• New Media Giants (YouTube etc)

• Sports Federations

MnS IGNITE Athletics & Television

425 419

318 281

252 251 250 224 223

121

050

100150200250300350400450

Quelle: Europäische Audiovisuelle Informationsstelle / MAVISE

0

100

200

300

400

500

600

700

800

900

1000

2009 2010 2011 2012

Other

Adult

Kultur/International

Children

Music

Lifestyle/Travel

Entertainment

Fiction

Documentary

Generalist

Movies

Sport

274

612

941

423

Increase of HD Services by Genre (2009-2012)

Quelle: Europäische Audiovisuelle Informationsstelle / MAVISE

European TV Market Fragmentation

Declining Market Shares since 80’s … and trend Continues

MnS IGNITE Athletics & Television

0

5

10

15

20

25

2005 2006 2007 2008 2009 2010 2011

ARD

ZDF

BBC 1

BBC 2

France 2

France 3

RAI 1

RAI 2

RAI 3

TVE 1

TVE 2

European TV Market Fragmentation - Examples

United Kingdom

• Grosser Verlust von Marktanteilen

• Durch breite Senderpalette gestoppt

Others:

Turkey 3 % Market Leader: Kanal D (14.8 %)

Greece 3.5 % Market Leader Mega (20.8 %)

Ukraine 2.2 % Market Leader Inter (19.2 %)

Marginalised Public Service Broadcasters !

MnS IGNITE Athletics & Television

European TV Market Fragmentation creates Pressure

Defending of Remaining Market Shares • High market shares through premium sport

• Reduction of sport with lower ratings

• Less programme changes for one-off sport events

Political Pressure on Public Service Broadcasters • Many different sports – show variety of society

• Limitation of sports right expenditure

• Maintain relevance of programmes (market shares)

Changing Competition for Sports Rights • Growing prices for premium sports events

• Leagues and series dominate pay TV

• Often insufficient market shares for niche sports

MnS IGNITE Athletics & Television

European TV Market Positionning of Broadcasters

MnS IGNITE Athletics & Television

•Other Events

•Highlights (Leagues, Premium Events)

•Key national & int. leagues

•Premium int. events

•International Premium Events

•Highlights Key Leagues

•Key National Events

• No sport or

•Few premium events

Commercial Broadcasters

Public Broadcasters

Thematic Channels

Online Platforms

Pay Broadcasters

European TV Sports Market Production Becomes Cost

• Wide variation of prices and quality

• Production resources increasingly outsourced – Commercial Broadcasters and Pay TV Channels have no own production resources

– Public Channels are reducing/closing own production resources

• Competitive pricing on open market – Broadcasters often operate with expensive overhead cost

– Sometimes ineffective procurement procedures

• Strong Impact on Athletics – Athletics Productions are expensive

– Athletics Events become more expensive for Public Broadcasters

– Liability risks for sport

MnS IGNITE

European TV Market New Competitors

Telecom Operators • Need to stop telco price erosion

Cable Operators • Need USP in Internet subscription sales

Hardware Manufacturers • Exclusive sports content

as sales argument

Online Platforms • Direct media market access

• Niche target group access

• Mobility

• Wide offer variety of offers

MnS IGNITE Athletics & Television

European TV Market New Competitiors

Online Media

• Small market, rapidly growing

• Uncertain Business Models

• New Strong Competitiors – Betting Industry

– Google/You Tube

– Microsoft

• Growing Rights Prices

Who is Future Aggregator?

MnS IGNITE Athletics & Sports

European TV Sports Market Development Total Expenditure EMEA

MnS IGNITE Athletics & Television

0

2'000

4'000

6'000

8'000

10'000

12'000

14'000

16'000

2011 2012 2013 2014 2015

All Events Ongoing EventsSource:PriceWaterhouseCoopers LLP

Position of Athletics Revenue Distribution

MnS IGNITE Athletics & Television

0%

20%

40%

60%

80%

100%

TV Sports Market 2014: 12.7 bn USDRegular Events Only

International Football

National Football Leagues

Motor Sport

Other Sports Athletics: 0.35 %

Position of Athletics Distribution Development

0

500

1000

1500

2000

2500

3000

3500

4000

4500

FIFA World Cup UEFA Euro

Premier League Olympic Games

MnS IGNITE

Position of Athletics Distribution Development

0

200

400

600

800

1000

1200

1990 1992 1996 2000 2004 2008 2012 2016

Olympic Games Athletics EAA

Swimming Gymnastics

MnS IGNITE

Position of Athletics Average Market Shares

MnS IGNITE

Positon of Athletics Development Perspectives

• Football further builds position

• Many other Sports structure their Events

• Funding Problems for smaller events and sports

• Increasing dependence from Olympic Games

GROWING PRESSURE ON ATHLETICS FROM ALL SIDES

MnS IGNITE

Position of Athletics Key Questions

Is Athletics a small big sport? • Long term product development strategy

• Comprehensive system covering entire sport

• Sophisticated exploitation systems

• Challenging market shares of big sports

Is Athethics a big small sport? • Reactive: living from media rights contract to next

• Adaptation on pressure from outside

• Driven by tradition and politics

• Trying to defend share against small sports

MnS IGNITE

Ingredients for TV Partnerships Careful Evaluation of Needs

What do sports have to deliver for Television? • Relevance of Events for Society

• Sufficient market shares

• Sufficient advertising revenue

• Generate subscriber interest

Competitive Advantages!

MnS IGNITE

Ingredient for TV Partnerships Careful Evaluation of Needs

Why do you need television? • Exposure? Revenue? Profile?

• Other?

For which Events? • All? Season highlights? Specific Events?

What kind of television do you need? • Free-to-air? Pay TV? Online?

• Live? Highlights? News? Background stories? Athlete profiling?

Clear definition of challenging but realistic objectives essential !

Good partnerships create benefits for both parties!

MnS IGNITE

Ingredients for TV Partnership Coordinated Long Term Development

Consider Sport as Product

• Constant Market Monitoring

• Long Term Strategy

• Build

• Brand

• Promote

• Distribute

Analyse & Develop Potential

Ingredients for TV Partnerships Build on Traditional Strenghts

• Strong heritage and Movement

• Athletics is «The» classic sport

• Everybody has tried it

• One of few truly universal sports

• Still Strongest Olympic Sport

MnS IGNITE

Ingredients for TV Partnerships Adress Weaknesses

• Lack of innovation in championships

• Too many meetings without sufficient connections and coherence

• Athletics season: weak story – peak in middle of season

• Too long and slow event for internet age

• Too little direct competitions between athletes

• Weak competition dramaturgy & lack of stars

• Is athletics still perceived as «cool»?

MnS IGNITE

Ingredients for TV Partnerships Top Down – Strenghten Top Events

• Improved ompetition system and Dramaturgy

• Pyramid structure

• Obvious connection between events

• Use qualification

• Think about Europe

• Aggregation

• Keep it all Simple and Clear!

Flagship Events are key for awareness of sport !

MnS IGNITE

Ingredients for TV Partnership Top Down – Example European Sports Championships

Ingredients for TV Partnerships Top Down – Use Power of Aggregation

Rejecters

Main Eventers Free to Air - Prime

Time

General Sports Fans Free to Air - Channel 1

Free to Air - Channel 2 Fans of Specific Sport

Thematic Sports Channel Dedicated Fans of Specific Sport

Ingredients for TV Partnerships Top Down – Use Power of Aggregation

MnS IGNITE

Ingredients for TV Partnerships Strong Top Series & Meaningful Competitions

• Real competition instead of individual results – Create alternatives to World Records

– Athlete participation in ALL events of competition

– Ranking lists?

– Fastest man/women on earth

• Right number of Events – Less is more

• Each Event needs to be relevant – Title

– Qualification/Relegation

– Duel

MnS IGNITE

Ingredients for TV Partnerships Dramaturgy

• Stars

• Story

• Set the right scene – Full stadium

• Emotions

• Trilling competition with proper build up

• One event after the other in decisive phase

• Short, fast: only as long as you can keep tension!

MnS IGNITE

Ingredients for TV Partnerships Bottom up - Reconnect to basis

Athletics still manages strong Mass Activation • Individual practising of sport

• Mass race participation

However: • increasingly outside traditiona Structures

Motivations? - Not world records

- Competitions against one self

- Wish to reach limits

- Social experienece

Large customer group

MnS IGNITE

Ingredients for TV Partnerships Bottom up - Create Experiences and Social Networks

• Own sport experience

• Event anticipation and/or experience

• Viewer Experience

• Interlink

• Create Social Media Communities

MnS IGNITE

Ingredients for TV Partnerships

Efficient Use of Resources

• TV Production Resources – Adapt production to exposure opportunities

• Promotion Platforms – Expose events where they can be sucessful

– Low ratings on big channels are counter productive

– Make best use of media attention

MnS IGNITE

Massive Dormant Potential !

MnS IGNITE

Start Now! Dare to Try !

And Remember:

• Athletics competes in a difficult market – Slow growth

– Strong competition

• TV Spectators want to be entertained !

• The finger on the remote does not care about

– How you did it in the past

– Sports Politics

– Complicated Regulations

– Calendar Constraints

MnS IGNITE