It is a fact that television audiences, as a general trend, are falling in the world of sport. Are we simply in a period of transition from analogue to digital models, or are the "bosses" of the various competitions, guided by the short-term money from the sale of rights to pay platforms, creating damage with irreparable consequences?
At this time of year, the annual prize-giving ceremonies of many sports competitions and federations take place, and the typical run-run of conversations often revolves around the same theme: There are no sponsors. And there will be even fewer if this continues like this! -is quickly added as a catchphrase. Why aren't the sponsors coming? Because there is not enough audience!
This type of conversation is becoming more and more common in sports forums and is a consequence of the alarm bells that are ringing in the marketing departments of companies, which are thinking much less happily than in the past about investing in sports sponsorship. Despite continuing to believe in sports sponsorship as an ideal tool for the promotion and communication of your company, the return on investment is beginning to be questioned in the face of television audiences and digital environments that are far below what is customary/expected.
See the case of Repsolthe team's sponsor for two decades Honda in MotoGPThe Spanish television network, which warned at the beginning of the season about the unsustainability of maintaining sponsorship in a sport that only four years ago brought together 5 million people in front of a television set and nowadays rarely brings together more than 300,000 since its transition from free-to-air television to pay-per-view platforms. That this is happening in Spain, at an absolutely sweet moment with the dominance of Marc Márquez The fact that they have been in the category and the spectacular nature of their careers only deepens this concern and calls into question the approach.
The situation is not much more encouraging in the four-wheeler sector, where, despite the spectacular season of Carlos Sáinz Jr. in the team McLarenThere don't seem to be many Spanish companies willing to support the young rider from Madrid, except for Estrella Galicia beer, which has compensated with an excellent sponsorship activation, a very low audience figures (compared to when it was free-to-air TV) by Movistar TV.
The problem is that at a global level the situation is similar, suffice it to say that in just over five years, Formula 1 has lost approximately 125 million TV viewers from the more than 625 million it had in 2012. As happens in any business when you start to lose customers on a massive scale, you look for the most varied reasons, in order to avoid getting to the bottom of the problem, which in my opinion in this case is that there has been a lot of arrogance in general on the part of both the promoters of competitions and the managers of the pay platforms. Thinking that where once you could watch something for free, now fans were going to flock to pay-per-view because 'the quality was much improved', time has shown that these forecasts were far from reality.
As I said, this is not an exclusively Spanish case, as on the European continent we can see the difficulties that the untouchable (until now) and all-powerful football is having to match the audience figures it enjoyed not so long ago, as its vision is broken down into different platforms depending on whether it is La Liga, Copa del Rey, Champions League, or Europa League (or even national teams), the total numbers of the sport may not be far from its best times, but category by category the drop has been unavoidable.
Let's look at the data, such as those provided by the company's 'Global sport fan survey'. CSM Sport & Entertainment. The 2018 study tells us that in both Spain and the United Kingdom around 20% of the adult population is very interested in following both 'La Liga' and the 'Premier League' respectively. These are undoubtedly very high figures, but nevertheless, if the same sample is asked about what their favourite sport is, in football-loving countries such as Spain or Italy, it is surprising that only approximately 50% opt for football as their favourite sport, and if we look at countries such as France and the United Kingdom this figure drops to just 35% of sports fans.
If we go deeper into the sport-by-sport data, we can see that among fans of sports other than football, such as motor sports, tennis or cycling, there is a significant 25% who declare that they are simply fans of sport in general, i.e. they are happy to watch whatever sport is shown on TV, but they are not fanatical enough to follow it on a pay-per-view platform.
If we continue searching through the data, they will increasingly confirm what we already suspected and that is that in the end the pay platforms are only capable of attracting the very fanatical fans of their sport and leave the fans of other sports by the wayside, which as we can see are many. Fans who, even if it is not their favourite sport, would follow it if it were made easy for them (on free-to-air generalist TV, so to speak). In the end, the many fans, sport by sport, can add up to a lot, but the numbers are very disappointing when they are broken up.
Payment platforms
When promoters are asked about the negative effect of the move to pay-per-view on sports viewing, the answer is usually 'it's too cheap' and that pay-per-view should not be the reason. To a certain extent they may be right, but this ignores the fact that a football fan, who also likes to follow motorbikes, tennis, golf, etc., is not going to subscribe at the same time to MovistarTV, to DAZN, to Canal Golf In the end, you would more or less need to make an excel sheet of receipts and broadcasting places to clarify where everything is, where before there was (and for free) only the zapping of generalist television.
Let's not forget that in difficult economic times, the first thing you cut back on is this type of expenditure, especially considering the amount of entertainment available today on the Internet, totally free of charge. The result is that you cancel all your subscriptions or at most you keep only the one you consider essential for your hobby.
Independently of this phenomenon, a consequence of the proliferation of pay-per-view platforms and the consequent multiplication of the entertainment offer at all levels with Netflix, Amazon video and others, beyond the sporting arena, promoters have also been aware for some years now of the ageing of their fan bases.
It is a fact that the younger public nowadays prefers to follow sport in a very different way to the traditional one, with options such as videogames or video game channels. YouTube or Instagram. It is logical that they are concerned about this and that they are taking measures to approach them and seduce them with offers more adapted to their tastes, but in my opinion they have launched themselves in general into a rather suicidal race to attract young audiences, totally neglecting and not pampering the bulk of fans between 45-65 years of age who are considered 'old'. They forget, that if you don't make it too difficult for these 'oldies', they will continue to watch their favourite sports on mainstream TV for at least another 20 years on average. Two decades!!!!
Perhaps, therefore, generalist television is spoken of with too much disdain, forgetting that at weekends, when people are away from home, on holiday or simply at any time of day in their own homes, many people do not want to go crazy with different platforms and simply want to watch 'what's on TV'. A lot of disdain for these people, but beware, home to home, bar to bar, they were the ones who ended up giving those millions of followers that were once so attractive to companies when it came to investing in sports sponsorship. Not everyone is as techie and digitally active as managers often assume from their offices. Here we have a glaring example of the famous trap into which one can fall due to the lack of correlation between market studies and the crude reality.
The sports promoters, in my opinion, have also failed to take into account that the model of the pay-platforms offering such exorbitant sums for rights and very low subscription fees is not sustainable in the long term. It is logical that the platforms do this with the aim of gaining affiliate share as quickly as possible, but probably guided by a short-term vision of the enormous sums that have been put on the table, the promoters, and why not say it with the support of their participants, have opted for the crudest form of 'bread for today and hunger for tomorrow' and have gone without complaint one after the other towards this pay-per-view model.
I remember that no less than twenty years ago I had the opportunity to take part in sports broadcasts on what was then called Canal Satélite Digital and I heard nothing else around me but "this is the future"., "conventional television is dead". and similar comments. Well, be careful with these dinosaurs, because sometimes they resist "dying" much better than expected.
In this sense, it is very illustrative that in the United States, a paradigm in all these kinds of audiovisual and sports issues, the major traditional sports such as American football, basketball, baseball, ice hockey and NASCAR racing, are also suffering greatly from audience declines.
Oversupply of entertainment
Sports platforms of FOX, ABC or NBC have a much lower cost per member than expected, as a result of unbundling and especially the over-supply of entertainment. The one that is doing the best is ESPNthe sports channel of Disneywhich opts for a different model of syndication with a presence on many platforms such as Comcast or DirectTV and as a consequence, it ends up having a much greater reach and better numbers both in terms of follow up and economics.
It is also very significant that America's biggest sporting event, the NFL Super Bowl, hit its audience ceiling in 2015 and is the first time since records have been kept that it has had three consecutive years of falling viewership. This year it rebounded a little (reportedly as a result of the legalisation of sports betting in many states), but it is already acknowledged that it will be very difficult to return to the great figures of yesteryear and, as a consequence, sponsorship rates and the number of companies interested in sponsoring will undoubtedly fall.
In short, in today's environment of a huge offer of audiovisual and digital entertainment, I think it is not a good idea to put up barriers to your traditional followers with payment platforms and difficulties when it comes to the general following of sports. I have always believed that the ideal model for sponsorship money to reach sport is to make both models coexist. Create enough of a difference in quality so that the 'fan' subscribes to the pay platform and the 'casual' can continue to watch on generalist TV.
In the end, it comes down to the same old story. No magic recipes, but compromise solutions.
Pablo de Villota
Director of Sports & Entertainment at Proa Comunicación