Eleven's Watson: We've taken giant steps in Portugal and want to stay in UK
By Jonathan Rest
Eleven Sports, the international subscription broadcaster, is well-positioned for a long-term future in Portugal and will be able to aggressively target major properties after sealing widespread carriage deals in the market, according to Marc Watson, the broadcaster's executive chairman and group chief executive.
Eleven is also eyeing two new markets as it continues to increase its global footprint, and has not ruled out staying in the UK and Ireland beyond this summer when its agreement with Spanish soccer's LaLiga ends.
Eleven, which launched in Portugal last year armed with rights to soccer’s Uefa Champions League and Spanish LaLiga, is now available on telecoms trio Altice, NOS and Vodafone, adding to its existing agreement with Nowo and its own over-the-top platform, meaning it has 100 per cent pay-TV distribution.
The distribution deals were sealed in time for the return of the Champions League last week, with FC Porto’s visit to AS Roma.
In an exclusive interview with Sportcal at the broadcaster's central London headquarters, Watson said: “They are crucial deals for the business and a giant step forward for our business and plans in Portugal. We have a great product there with some of the best content in the sports world and a great local team. We have made a lot of progress building the brand in the market and what we were missing was wide distribution.
“These deals solve that in one go. They are very strong deals financially and underpin the future of the business for many years to come. We see a very bright future in that market.
“We are now in a great position, in that now the business is now an economically strong business, so that’s a great way to start and we are absolutely committed to the market for the long-term.”
Also in Portugal, Eleven holds rights to Germany soccer’s Bundesliga, France’s Ligue 1, the Scottish Premiership and Belgium’s Pro League, and NFL American football, and Watson said the business is in a strong position to build on that.
He continued: “The next stage in Portugal is really to optimise the distribution we have got, build our direct-to-consumer business, which is going very well. That’s what we are focused on for the rest of this season. We want Eleven Sports to be one of the biggest consumer brands in that market. Come next season, we will look again at opportunities. We will always look to acquire content that is working for us.”
The template in Portugal is one that Eleven has successfully rolled out in the likes of Belgium and Poland, but its failure in the UK and Ireland is something that clearly frustrates Watson.
He said: “There is a reluctance of operators to support a new entry [in the UK] that we have not encountered anywhere else. It is unusual.”
Eleven Sports is now an OTT-only offering in the UK after plans to launch a channel on pay-TV platforms Sky, BT Sport and Virgin failed. That led to attempts to convert its exclusive multi-platform rights into digital rights only.
However, from 1 March, Eleven will end its coverage of Italy’s Serie A and the Netherlands’ Eredivisie in the UK as the rights switch to pay-TV broadcaster Premier Sports, following a “strategic decision” to “amicably” end its partnership with IMG, the agency that sells the broadcast rights to the two leagues.
Rights to LaLiga, which Eleven acquired ahead of its launch in the UK and Ireland last August, have been retained, however, and coverage is continuing until the end of the season, with “the intention of continuing beyond.”
Watson said of the current UK situation: “We are a digital product dedicated to Spanish football. We are investing in the product, adding content [Eleven recently acquired exclusive rights to the semi-finals of the knockout Copa del Rey] and we are expanding distribution to enable customers to watch our application on smart TVs. The service is growing. It is a good service.
“We have agreed with LaLiga that we will continue this service until the end of the season. We are reviewing what happens beyond that. We would like to continue if we can find the right basis to do that. Those conversations are live right now.”
As news of Eleven’s uncertain future in the UK market broke at the end of last year, it was reported that the broadcaster had only garnered around 50,000 subscribers.
The company does not divulge its subscriber numbers, but Sportcal understands they remain around that 50,000 figure, with the number of cancelled subscriptions off the back of losing Serie A rights made up for with new customers in time for the Copa del Rey, which includes two Barcelona-Real Madrid matches.
Asked whether Eleven is committed to the UK for the long-term, Watson said only: “Eleven Sports is currently operating in the UK market and we are looking at all options about how we continue the service into the future.”
A carriage deal with Virgin was all but signed off in late October, but never actually materialised. As a result, mixed martial arts’ UFC triggered an exit clause in its deal with Eleven and the property will remain on BT Sport’s schedules this year.
Watson said: “I don’t want to talk about individual operators or discussions. I think we came to the market with a strong proposition and we deployed a model here that we deployed very successfully in other markets, even tough markets. The UK is a particularly tough market to crack. It is difficult to come here as other operators have shown in the past, even if you have a model that is pretty rational and offers good value.
“Competition is a good thing, it is a good thing for consumers. The UK remains one of the most expensive and inaccessible markets in the world for premium sport. We still believe we are doing our bit in helping to change that, at £4.99 [$6.44] per month for LaLiga. I think the UK market would benefit from more operators, from more competition.
“In the end, for us, we have to make decisions about where we deploy our capital, where we put our resources, and we are going to do that in markets where we think we can build a sustainable business and create real value. We will see what happens in the UK over the coming months. I would like to see us still here in the market.”
Eleven is now active in 10 markets: UK and Ireland, Belgium, Luxembourg, Poland, Portugal, USA, Italy, Singapore, Taiwan and Myanmar.
It recently missed out on domestic soccer rights in Poland, where the business is majority-owned by commercial broadcaster Polsat, in a highly-competitive tender, but its portfolio in the country includes a range of top European soccer leagues and F1 motor racing, for which it predicts an increase in customers in 2019.
Watson said: “In Poland, the business has continued to grow, we have some extensions on key content coming up in the next few weeks. The F1 season is about to start, and having Robert Kubica [the Polish driver returning to the sport after eight years] back with Williams, it is a huge development for us in that market. It will really enable us to grow the business there.”
Asked whether the UK experience had made the broadcaster more risk-averse, Watson replied: “No. The experience in the UK did not go exactly as we hoped. We faced some challenges, but when you set up a new business in new markets you are always going to face challenges. That is no surprise. The important thing is to deal with them in a way that works for you, your partners and your customers, and that is absolutely something we have been focused on in the UK. You learn from what you’ve done and you move on.
“But we are not scared of anything, frankly, and everything we do adds to the intellectual capital within the business. It’s a learning experience and hopefully it makes us a bit better at doing what we do, refines the business model and enables us to be more successful in the future.
“We know the market well. We thought we’d developed a proposition that was a good rationale for local operators to work with us on it. I don’t think there was a failure of due diligence at all. We looked at it carefully, but you cannot always predict the future and things don’t always go as you’d hoped or planned.”
Indeed, Watson said Eleven is ready to continue growing its global footprint.
He noted: "We are going through a period right now where we’ve grown very quickly, a process now of consolidating that a bit and making sure it’s a really strong platform, and once we’ve done that then we look to develop the business further.
“We are looking seriously at two major new markets at the moment. We think we have identified a really strong opportunity in both of those and we’re working on them in the background and see how they develop.
“The basic message is we are growing extremely quickly, and consolidating the business to make sure it has a strong scalable future.”