Digital retailer Fanatics, which has numerous partnerships in place across soccer, the NFL, MLB, and American football, has entered an agreement with broadcaster Sky Sports, creating an online store that will be available in the UK, Ireland, Germany, Austria, Switzerland, and Italy. This type of partnership is a departure for both the retailer and the broadcaster. Fanatics typically enters into agreements with sporting leagues, federations, and clubs to sell merchandise through its online platform, which has a significant presence across the US. It entered the UK market by acquiring UK-based e-commerce company Kitbag in 2016.
What makes this deal unique is that the partnership with one of Europe’s dominant sports broadcasters gives Fanatics access to sports fans in real time but also gives Sky Sports an opportunity to diversify its own revenue stream, which is primarily focused on acquiring subscribers with a premium offering of sports rights.
It is partly this opportunity that has led Amazon into the Sports media rights market in recent years. Amazon, like BT Sport previously, has an ulterior motive in terms of engaging with sports rights, namely, to drive subscribers to its Amazon Prime service much like BT was looking to drive broadband subscribers. Where Amazon’s strategy differs to that of BT is the fact that Amazon is ultimately not offering a product, it is offering a service in terms of the long-term aim of securing subscribers to the Amazon Prime subscription, and this ultimately drives Amazon’s decision-making in terms of identifying which rights to target.
Sky is in a different position. As the preeminent European sports broadcaster, it has seen some of its major markets attacked in different ways. Having largely seen off the challenge of BT Sport in the UK, Sky knows that, with Warner Brothers Discovery taking over BT Sport and rebranding it as TNT Sports, the landscape will likely change again. In mainland Europe, the likes of Sky Italia and Sky Deutschland have been challenged, with DAZN establishing itself in these key European sports markets. The deal with Fanatics opens a new a realm of possibilities for Sky. By entering a commercial retail deal with Fanatics, Sky is using this as a means of fan engagement, one in which the fan is given access to a shop in order to buy merchandise in real time.
If Sky can monetize fans effectively with a retail, e-commerce-based offering, allowing fans to buy replica shirts while watching a soccer or American Football game, this potentially opens an entire retail universe for the broadcaster. Given the rapid development of artificial intelligence (AI) and the need for sports rightsholders to be far more imaginative in terms of its offering to sponsor partners, is the future for sports sponsorship an e-commerce model through the broadcast rights? As the likes of the Premier League and NFL look at ways of increasing their broadcast rights fees, does this e-commerce model provide an additional way for these leagues to commercialize their offering? Can logos on screen be used to drive fans to online retail opportunities?
Given all the data broadcasters, rightsholders, and social media platforms have on all of us now, can this data be utilized by AI to create personalized adverts to target sports fans on an individual level? The era of ‘one-size-fits-all’ activations and adverts may well be at an end and with it the logo placement era of sports sponsorship.
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You don’t have to stretch your imagination too far to reach this shopping utopia. A car brand that has a front-of-shirt logo, the ability for that logo to run an advert in the corner of the screen and take you through to the brand website on your connected device, be it a phone, laptop, or tablet, having lured you in based on your social media likes with a personalized finance offer based on your credit history.
While the deal between Fanatics and Sky Sports will no doubt help drive a retail presence for Fanatics in the UK and drive replica shirt sales, the future of sports broadcasting and broadcasting in general could be about to change forever.