Social Media & Sports in the U.S.

Overview

• Age Waves and the Millennial Generation• The Importance of Media Rights to Sports Organizations• The Meaning of “Disruption”• How We Consume Media Now• Using Social Media to Reach a New Type of Fan

Age Wave

An “age wave” broadly defines a cluster of people to identify unique generational patterns and interests.

Baby Boomers Generation X Millennials

• Born: 1946 – 1964• Currently 51 - 69 years old• 80 million people

• Born: 1965 – 1980• Currently 35 – 50 years old• 51 million people

• Born: 1981 – 2000• Currently 15 - 34 years old• 75 million people

2005 2025

Millennial

Baby Boomer

$8.3 Trillion

$6.4 Trillion

$1.1 Trillion

Demographics: Purchasing Power

Gen X

$5.4 Trillion

$5.7 Trillion

$0.8 Trillion

As other generational purchasing power plateaus or wanes, Millennials’ explodes.

“Sports is the only segment that guarantees huge reach and live-audiences...”

Reaching a Millennial AudienceMarketers sought to reach this increasingly important market with the best tool they had: sports.

Reaching a Millennial Audience

2009 2014

$6.3

$8.5

Advertising Spending on U.S. Sports Television (billions)

Reaching a Millennial Audience

In 2014, 37% of all TV

advertising revenue is

sports-related

Leagues and teams have benefitted greatly from this advertiser focus on sports.

2014: $7.3 billion in media rights revenue

About $6.3 billion

from TV contracts.

About $1 billion from sponsorships,

licensing, etc.

1 Super Bowl2 NFC Championship3 AFC Championship4 NFC Playoff5 AFC Wildcard6 Academy Awards7 Grammy Awards8 NFC Playoff9 AFC Div Playoff10 AFC Div Playoff11 NFL Playoff12 NFC Wildcard13 Super Bowl Pre-

Game14 NFL Sunday15 NFL Thursday

RED = 2015 top TV rated shows that were sports related (all were NFL).

In 2014, each NFL team received $200 million from league TV contracts

Ticket Revenue League TV Revenue

2005 2008 2011 2014 2017 2019

$13.2$15.1 $16.1

$17.7$19.4

$20.1

$7.0$8.5

$10.9

$14.6

$19.2

$20.6

By 2018, media rights will surpass ticket sales as the greatest source of revenue for US sports teams.

So, yes, the NFL and other sports love their TV media dollars.

But storm clouds are on the horizon.

ESPN Primetime Viewership: 2015 v 2016

Jan Feb Mar Apr May Jun Jul Aug Sept500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

2015 2016

Hou

seho

lds

(000

s) -16%

+1%-25%-4%

-2%

-19% +4%-4%

-17%

DISRUPTION

Most people are pointing to the incredible disruption currently taking place in media.

A “disruption” is something that significantly alters the way that businesses operate.

There is a ‘before’ the disruption, and there is an ‘after’.

BEFORE AFTERDISRUPTION

Media is currently going through its own major period of disruption.

BEFORE

DISRUPTION

AFTER

2004 2005 2006 2007 2008 2009 2010 2011 2012 20130

200

400

600

800

1,000

1,200

1 6 1250

150

350

608

845

1,006

1,150

6

8 26150

500555

1 10 3080

150

Bill

ions

of U

sers

Today, the average American spends 16 minutes of every hour on social media (more than email.)

For avid fans, 72% of that social media time is spent on sports.

US Adults: Hours Spent on Major Media per Day

2011 2012 2013 2014 2015

3:40 4:20

4:51

5:15

5:38

4:34 4:38

4:31

4:22 4:15

Sports Fans and Social Media

At Work

86%

58%

In the Bathroom

74%

At a Party

69%

During a Meal In a Movie

25%

At Church

9%

Changing the Way Fans Relationship with Sports Media

41%13% 4%

Percentage of fans using different media to check sports news and scores.

2nd Screening

Using a mobile device while watching television, especially to access additional content or applications.

2nd Screening + Social Media = Sports Fan Heaven

87% of TV viewers use a 2nd device while watching. And their social media use is prolific.

Peer 2 Peer Live Streaming

Peer 2 Peer Live Streaming

Transmit or receive live video and audio coverage of (an event) over the Internet.

FB Live serving 8 billion videos per day

APRIL 2015

“We’re not worried. Television coverage will almost certainly be better than someone broadcasting on Periscope of Meerkat.”

- NFL Spokesperson Brian McCarthy

MAY 2015

NFL bans use of Periscope and Meerkat at training camps.

SEPTEMBER 2016

NFL bans teams from live streaming and distributing animated .gifs.

Cord Cutting

• Cord Cutting: Using alternative (non-paid) means to access video content (Internet, Set Top Boxes, etc).

• Fees that networks receive from pay TV providers are instrumental to driving huge sports media deals.

• ESPN’s huge revenue from pay TV is the reason Disney bought ABC.

• July 2016, 25% of US Households do not pay for TV.• Millennial households: 38%

$ChangingAudiences

Internet Everywhere

Quickly Changing Technology

Rise of Social Media

The NFL (other pro sports) primary revenue source is under assault.

• Most likely to have social media accounts

• Most likely to watch NFL games online

• Least likely to identify as NFL fans

• Least likely to watch NFL games on TV

MILLENNIALS

And the next generation of fans is less likely to be engaged with traditional media.

21-25 years old

18-21 years old

16-17 years old

17%

34%

49%

“I’m a Bigger Sports Fan Because of Social Media.”

So What Do We Know?

•The way fans consume/interact with sports has changed.

• Social media is essential to engaging this new type of fan.

•Meaningfully engaging with these fans through social media will be key to growing both existing and new revenue streams.

So What Do We Know?

When developing a social media strategy for a sports property, consider the following six principals.

1. A means to an end

2. Choose the right tools

3. Keep it ‘authentic’

4. Develop a voice

5. Grant unprecedented access

6. Encourage fans to contribute

1. A Means to an End

STEP 1Begin Social

Media Activity

STEP 2Start

Collecting New Revenue

A traditional mindset.

1. A Means to an End

Awareness RetentionReach Conversion Loyalty

Social media as a way to impact every phase of the sales cycle.

SOCIAL MEDIA

Traditional Media

Direct Marketing

Events

2. Keep It Authentic

2. Keep It Authentic

Social media must reflect the excitement, joy, frustration and tension of a sports fan.

“Don’t pick your ammunition until you know what you’re hunting.”

3. Choose the Right Tools

3. Choose the Right Tools

0%5%

10%15%20%25%30%35%40%45%50%

49%

24%

16%10% 9%

NFL fans with active social media accounts (used or contributed to in the last month)

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

41% 39% 37% 28% 24%

16-24 25-34 35-44 45-54 55-64

3. Choose the Right ToolsActive users of social platforms (used or contributed to in last month) by age.

4. Choose the Right Tools

Engage EXISTING fans Engage POTENTIAL fans

4. Develop a Voice

• Related to “authentic”. • How do you present your

league/team/athlete on social media?

Los Angles Kings@lakings

To everyone in Canada outside of BC, you’re welcome.

20,000+ New followers13,000 Retweets

4. Develop a VoiceFollowing LA Kings defeat of Vancouver Canucks (one of most despised teams in Canada.)

5. Grant Unprecedented Access

Social media can be the eyes and ears of the fan. What can you give them that they can’t get anywhere else?

5. Give Unprecedented Access

6. Let Fans Contribute

Old Model: Broadcast• Team/League in control

• Team league creates/delivers content

• Communication goes 1 way

New Model: Social Media• Everyone has some control

• Fans modify, repackage, and

• Communication goes everyway

Summary• Media is changing and will continue to change.• Social media presents both opportunities and challenges for sports

businesses.• Smart sports businesses will use social media to connect with and

engage a new type of fan.• Revenue from social media comes through a deeper, more

meaningful relationship with fans.