Sports clubs have something that many other organisations spend years trying to create, fans. The sport that you love, and the club that you support, is tribal and often an emotional connection that is passed down from generation to generation. 

For many leagues, it has also been a lucrative business. In the UK, the sale of Premier League tv rights has increased year on year since Sky effectively created the market, most recently reaching over £5 billion for the 2018-19 season. Not everyone gets a large slice of the cake though, the cake in fact for many sports is pretty small, so clubs top up their revenues with the likes of ticket sales and merchandise. 

However, there are a few challenges with this model. The first is that the amount earned from broadcasting and sponsorships is dependent on the teams’ performance on the pitch, and so can fluctuate year on year. The second is that most of the direct fan revenues come from spectators attending games and spending money whilst they’re there….but has anyone been to a live sporting event in the past 6 months?

Around this time last year Manifesto launched a report on Membership Economics, a perspective on how to build deep, long-lasting relationships with customers, and how to monetise them. In my view, sports clubs and associations are in the fortunate position of building the former, but many are struggling with the latter.

So, can they monetise fandom?

From sports clubs to sport-related content creators

The basis of the traditional relationship between a club and its fans is one that is at its most intense when the team is playing on the pitch. A time-boxed form of engagement. Therefore, to monetise their fandom, they need to find ways to have direct and ‘always on’ engagement with fans, instead of focusing on tentpole events. 

Not too dissimilar to publishers focusing as much, if not more, on the lead up to and after a breaking news story, sports clubs should consider how they create a buzz before a game, and continue the levels of engagement after it’s happened. 

For example, Premier League football club Manchester United launched their content subscription service MUTV back in 1998. In exchange for a fee, fans have access to live footage of the 1st, reserve and academy team matches as well as behind the scenes footage and exclusive interviews. The exact number of subscribers is not publicly available, however convert just 1% of their estimated 670M supporters worldwide at a ~£100 annual price point….well you can do the maths.

Examples of similar ventures can be seen at a league level as well with the NBA Pass and NFL Game Pass. 

The benefit of these models is that clubs encourage their fans to switch from 3rd party platforms to their own, where they can not only monetise their content but also where they can start to gather 1st party data so to better understand who their fans are. 

The main limitation, however, is that the value proposition is still orientated around what happens in the physical arena. 

Expand into the wider fan universe

As with any areas of interest or hobbies, the sports ecosystem is far-reaching and goes beyond watching a game played by professionals. One of the fastest-growing is the world of esports, where you don’t have to be a super fit or talented sportsman or woman to be able to take part. It brilliantly combines audiences’ love of the game and competition, with entertainment. 

According to Sports Insider, this year has seen more football clubs invest in esports, either in the form of sponsorship deals or by creating a gaming brand of their own. Back to the game of football, Manchester City and PSG have both created esports divisions, headed up by a Chief Gaming Officer, with teams that compete in Dota, Fifa and League of Legends.

This brand expansion means that they can offer their official sponsors more airtime and eyeballs, as well as filling their ‘hopper’ with fans of the future. Fans of traditional sports, and traditional methods of watching them, are ageing across the board, so branching out into the wider ecosystem can stem the probable future declines in traditional revenues. 

Source: CSM

Everything comes back to the economics of Membership

When writing this blog, I always found myself reflecting on how there are so many similarities between the sporting world and other sectors. For a while now, traditional revenue streams have become less dependable, accelerated by the COVID landscape that we’re currently living in; think advertising and/or newsstand for publishers, or high street sales for consumer goods brands. 

At Manifesto, we believe that the solution lies in building ongoing and direct relationships with your fans, audience, customers or consumers. Design (and constantly innovate) a D2C value proposition that solves a need, with an intelligent acquisition strategy that understands why they move down the sales funnel, and then keep hold of them by building regular viewing, reading or consumption habits. 

Our top tips:

• Understand the potential total value of your customers by reflecting on your market, as well as their wider ecosystem

• Map how much value you’re achieving from them, and through which of your propositions

• Identify ways to move customers up the value curve; whether it be creating a new proposition, expanding into adjacent markets or improving your acquisition and/or retention strategies

• Align your organisation around a 1st party data strategy and KPIs focused on engagement and long term value, rather than short term volume

Interested in learning more? Check out our case studies for more examples of where we’ve helped companies with challenges like this, and our Engagement Economics report for the science of building obsessed fanbases