Just a quick outlook on the existing leagues (NFL, MLB, NBA, NHL, NASCAR) with basic information about their revenues and, subscribers, major problems and things management should be looking at
2. Industry Outlook
Revenue, $bn Annual
growth, 09-14
Annual
growth, 14-19
Profit, $bn Wages, $bn
24.8 1.8 2.5 1.7 15.3
Life cycle stage Mature Regulation Level Heavy
Capital Intensity Low Barriers to Entry High
Concentration Level Low Industry Globalization Low
Competition Level High
Major Challenges:
•Recession and changes in disposable income
•Decrease in time spent on leisure and sports
•External competition with other entertainment venues
•Internal cannibalization: online vs. visiting events
•Gender disproportion: overwhelmingly male attendance of sporting events
4. Segmentation of Market
Ticket sales
38%
Broadcasting an other media
rights
31%
Advertising
12%
Other
11%
Concessions
4%
Merchandise Sales
2%
Licensing of rights to use
property
2%
Products segmentation
Ticket sales
Broadcasting an other media rights
Advertising
Other
Concessions
Merchandise Sales
Licensing of rights to use property
5. Major Players
NFL MLB NBA NHL NASCAR
League
revenue,
$bn
8.8 6.8 3.7 3.4 0.612
Operating
Income, $M
1300 394 357 250 78.692
Number of
Teams
32 30 30 30 21
Average
Attendance
67,579 30,884 17,273 17,455 97,772
Average
Team value,
$M
1110 744 509 282 84
6. NFL
Channel # of users
Facebook 10,131,344
Instagram 1,358,345
Youtube 2,860
Twitter 6,350,000
•Around $20.4bn paid in total to broadcast NFL games
•The broadcasting deal with DirecTV cost $4.0bn in 2009
•$4M – 30 sec. commercial during Super Bowl
•Development league was disbanded
•Female audience more than doubled in last five years
7. NFL
Challenges:
•High ratings but decreasing attendance
•Health issues
•Commoditization of product
•Thursday nights – questionable quality
•Not easy to adjust product for mobile consumption due to nature of game
•$765 settlement in action
What to do next:
•Go to England, but nourish game understanding in Europe first
•Make stadiums more user-friendly (kids zones, Wi-Fi)
•Sell games online a la carte
8. MLB
Channel # of users
Facebook 5,407,947
Instagram 807,955
Youtube 253,085
Twitter 3,570,000
•MLB TV – one of the best services of that kind
•MLB Academy – still underdeveloped asset
•Uniformed penetration rate across country
•Los Angeles Dodgers: $8bn deal with Time Warner Cable
•Hit in Asia and Dominican Republic
9. Challenges:
•Numerous issues with MLB TV
•Slowly but constantly decreasing ratings
•Games too long for average attention span of millennials
•Weak cultural ties outside US and Japan/Korea
What to do next:
•Make MLB TV work
•Try delivering games in smaller chunks
•Squeeze senior fan base more and reach out to them: see
Twitter growth rates among seniors
10. NBA
Channel # of users
Facebook 21,964,880
Instagram 2,404,363
Youtube 5,529,233
Twitter 9,930,000
•Strongest digital presence
•Youngest fan base
•Spacious product offering: NBA, NBDL, WNBA w/o cannibalization
•Nature of game fits to modern consumer demands
•High popularity among urban audience
•Visible growth opportunities across globe
•NBA China worth over $2bn by 2020
11. Challenges:
•Collective bargaining agreement and teams’ economics
•Racial issues
•Audience is always too young?
•Gap between teams from primary and secondary markets
•Players as media vs. traditional media channels
What to do next:
•Virtual in-game presence: see MU-FrontRow Google+ case
•Marketing partnerships in big cities: Sao Paulo, Seoul, Moscow,
Istanbul, London; 1bn people in Chinese cities by 2030
•Give out content in special venues (playgrounds)??
•Nourish game in emerging markets
•Add flexibility in game offering in emerged markets: see ITunes in
Russia
•More of around-the-game content
•Online interaction: polls, stats by demand
•Experiment with form: longreads & rich media
12. NHL
Channel # of users
Facebook 3,200,683
Instagram 446,432
Youtube 450,622
Twitter 2,410,000
The most international sport in this list and popular in Europe
In US strong presence only in Northern states
Strong inflow of talents from overseas
Combines basketball visual appeal and football masculine scale
13. Challenges:
Weak support from ethnic minorities
Difficult to engage children to play hockey
Only 3 teams make operating profit
Limited broadcasting on major channels (NBC) and no ESPN coverage
What to do next:
Fewer teams of greater quality
Match-ups with European counterparts in pre-season
14. NASCAR
Channel # of users
Facebook 4,138,848
Instagram 141,932
Youtube 60,702
Twitter 1,450,000
•Concentrated on South and West (except 2 arenas in IL and
MI)
•Long races
•High CapEx
15. Challenges:
•Dependence on weather conditions
•Fierce competition – same product
•Pricey packages: tickets, hotels, food
•Almost impossible to import
What to do next:
•Add entertainment: contests, live shows over weekend
•Make races shorter and more robust
•Try target younger “nerdish” audience: cars, technologies, mechanisms
•More of from-the-car content