McCourt: Clubs need better social media data to rethink the football model
By Simon Ward at the Dugout Commercial and Content Symposium
Top soccer clubs need to develop a better knowledge of their digital audience if they are to develop a lucrative new media revenue model that will take the pressure off the broadcasting rights structure that has sustained the sport for the last few decades, according to a prominent US media investor.
David McCourt, the founder and chief executive of Granahan McCourt Capital, a company which invests in technology, media and telecoms worldwide, claimed that “granular data” is necessary to get a proportionate financial return on the large followings that the clubs have built up internationally.
He argued that this will help the clubs tap into an advertising agency and market research business currently worth $330 billion per year.
Speaking at the Dugout Commercial and Content Symposium in London today, McCourt said: “We [as soccer clubs] need to know what our users are thinking before they know, and with that behavioural and psychographic data we can take our community, our global community, and monetise them directly with the brands. That is totally rethinking the football model.”
McCourt’s interest in the business has escalated after he and his brother Frank, the owner of French team Marseille, recently led a £8.3-million ($11.4-million) investment in Dugout, the digital media platform backed by top European clubs.
The clubs see services such as Dugout, which aggregates short-form video content of its member clubs, as a potentially lucrative source of revenue at a time when growth in the value of broadcasting rights deals is slowing as consumers are becoming increasingly reluctant to sign up to costly pay-TV packages, so called ‘cord-cutting’.
However, David McCourt, a veteran of the cable TV and telecoms industry, and valued at $750 million himself, believes the teams need to dig deeper to reduce their reliance on rights deals.
He said: “What we need to do as football clubs is figure out how do we get at all that social data, and get the information we need. And by information I don’t mean demographic data, I mean what makes people tick, viewing patterns, what content they’re going go, how long they’re staying on that content, what drove them to that content, how do they feel after they saw that content and did they have a change of opinion?”
McCourt said that the growth in the value of sports media rights, exemplified by UK pay-TV operators Sky and BT Sport now paying more than £5 billion ($6.55 billion) over three years for Premier League rights over three years is unsustainable.
He said: “They used football to make money and that has worked for a majority of the last quarter of century. People could buy football rights and they could make money. Now you buy football rights to try to sell something else, which is a problem. BT bought football rights because they were trying to sell [broadband] internet access. The problem with that model is that there’s never been a model in the history of humankind when you lose money and it’s a sustainable model, we know that.
“If you buy something and it costs $2 billion and you use it to try to sell something else, the problem is we could all get together and create a business that just sells that something else and we’ve got a $2-billion advantage, and then if we steal the customer from the other guy, his $2 billion becomes a bigger percentage of what he’s paying out, and he goes into a death spiral. It’s not really a good model. It’s not a sustainable model.”
McCourt added: “Since 2012 TV viewership has gone straight down and the amount of time people spend watching TV has gone straight down and, worse than that, the younger you are, the more those two things are happening.”
“That’s driven by what the media calls millennial behaviour and ‘cord cutters’… but they’re not really who we should be focused on because if you want to predict the future, the millennials are too old. You want to look at the generation that’s coming after them, and they will never be referred to as cord-cutters, because they don’t even know that there was ever a cord. They have no concept of buying a package.”
McCourt insists there is $180 billion per year of advertising agency market revenue and $150 billion per year of market research revenue “that could move somewhere else,” and that soccer, with its large and passionate, and increasingly digital, following is well placed to get a cut.
He said: “If you are an organisation of football club owners and you have the largest collection of like-minded users in the world, and there’s $330 billion of potential revenue, it would be a good idea to figure out how to get that.
“Anyone who sits between the product and the man who is paying the money, is potentially screwed. We in this room have the product, the greatest product in the world, in football.”
McCourt concluded: “In summary we need to work out how to take the middle man out, as opposed to saying it’s not fair that all our users are on social media and we pay for the product, and someone else is making the money. All the time we’re saying that it’s just wasted energy to try and get that money from someone else’s pocket into ours.”