Live From Sports Entertainment Summit: The State of the Sports Business

The SVG Sports Entertainment Summit drew more than 300 industry executives to the Sofitel Hotel in Los Angeles this week to discuss the future of both industries from a technical and business perspective. A morning session providing an overview of the sports business got things off to a fiery start, with such topics as the proper use of social media, building brands, and more up for discussion.

National Hockey League COO John Collins opined that the biggest challenge right now is that rights deals need to catch up to technology.

“The iPad experience and broadband experience is almost getting better than TV, and TV needs to catch up,” he said. “And things like predictive gaming help build a community around the game and drive fans deeper and deeper into the game.”

Technology is key, according to Dana White, president of the Ultimate Fighting Championship (UFC): “Technology provides so many ways to reach fans. I have 1.5 million followers on Twitter,” he said, “and I can talk directly to people and give them the right information.”

But AEG Digital President Michael Goldfine suggested that TV networks aren’t the only ones that need to catch up.

“The future is building software ourselves, social-media interaction, and multicamera streaming that allows fans to choose their own angle, but we need to slow down a bit,” he said. “The brands need to catch up with us, as they are slowly moving away from TV, but that movement has slowed a little bit.”

UFC provides actual fights, with free fights promoted on Facebook reaching an audience of billions. And the connected TV, where Internet reaches the big screen, provides massive potential for global pay-per-view events, according to White.

“Most people think about how to monetize an online show that reaches 1 million but don’t integrate advertising,” said White. “We crush the 18-30 demo because we put stuff out there and are authentic, real, and not selling but rather building the fan base. We can sell them later.”

Marketing and Advertising Tool
Goldfine added that live Webcasts are helping fans see their favorite sports anytime, anywhere — something fans desperately want.

“And while it’s great to do really cool stuff with streaming and apps,” he observed, “the great play is targeted advertising.”

The Marketing Arm President Daniel Belmont concurred that streaming can play a key role in brand building without a single advertisement. When Doritos launched a campaign to have fans submit their own commercials, he said, the response was overwhelming, and not just from those who had the time and energy to actually shoot a commercial.

“We had consumers spending hundreds of thousands of hours choosing the winning commercial, and it was phenomenal,” he said. “We lifted the brand from okay to very okay.”

Jeff Diskin, SVP, global customer marketing, Hilton Worldwide, added that there are now so many ways to reach consumers beyond the traditional ways that it is easy to find partners who not only reach an audience but are in lockstep with a brand’s values.

“We want things that tie to our core relationships and values,” he said. When Hilton decided to sponsor a car in Formula One, for example, the logo passing by at 200 mph is only part of the brand building. Hospitality for owners, racers, and others can add depth to relationships.

Building the Fan Base
White said one of the biggest problems with today’s major professional sports leagues is that they have lost touch with the average fan.

“There is no connection when players are bitching about a $65 million contract when they should get $85 million and there is a lockout during a huge recession,” he added. “I was watching the Lakers play the Mavericks, and, after the game, as the players were walking into the tunnel, there were children leaning over, and not one player high-fived a kid. How do you not high-five a kid?”

The UFC, on the other hand, gives fans a chance to meet fighters, have pictures taken, and get autographs.

“In hard times, fans want to leave with a better experience, and you need to build an incredible fan experience,” said White. “People come in on Thursday for an event that takes place on Saturday, and our weigh-ins are often as huge as our autograph sessions.”

Social media plays a major role in those efforts, with UFC fighters and executives encouraged to post Twitter updates as frequently as possible.

White shook his head in disbelief at leagues that prohibit players from tweeting: “Why the hell would you not want people tweeting?”

An International View
International markets are also providing a tremendous opportunity for both leagues and marketers. The NHL, for example, is revamping European broadcast rights to become more regionalized in an effort to attract European hockey fans to the sport’s biggest stage to watch players they may have seen in European leagues.

“We can slice and dice, and, with Neulion [handling streaming efforts], Finnish fans who want highlights of that night’s game can get what they want,” said Collins.

Tom Shine, SVP, sports entertainment worldwide, for Reebok, said that Reebok is focused on Brazil, Russia, India, and China.

“India actually has the greatest upside and opportunity,” he said. “A lot of focus is on China, but the middle-class income in India is higher, and we have 900 stores and haven’t even begun to touch the potential.”

The hot sport in India? Cricket, with sponsorship deals helping Reebok nail down 52% market share. “There is no second sport in India,” Shine added, “and it is such a massive opportunity.”

Advised White, “This is the world we live in. Grasp it, dive into it, and run with it. There is nothing as amazing and powerful as social media.”

Click here for SVG’s comprehensive coverage of the Sports Entertainment Summit II.