IMG Media is one of the largest and most significant divisions inside one of the largest and most significant agencies inside one of the world’s largest and most significant (and still-growing) industries.
The sports distribution, production, and organizational agency has offices in a range of key markets and continents and counts a myriad of top-tier sporting properties – such as English soccer’s Premier League, American football’s NFL, and the International Olympic Committee – in its client stable.
Its sole president, as of July this year, is Adam Kelly, and late last month he spoke with GlobalData Sport at the Sportel conference in Monaco.
In this, the second half of an in-depth IMG feature, Kelly issues a diagnosis of where IMG Media is now and where it’s going, key trends in the sports media industry that will have major effects on the industry in both the short and long term, and the constant challenges involved in working across a wide range of ever-evolving sports properties and rightsholders.
Kelly, who first joined IMG Media in 2001, before steadily progressing through the ranks and becoming head of the divsion’s global sales project in 2017, starts by analyzing how and why IMG Media has shifted its strategic position in the last 18 months to two years, also examining the reasons for that change.
The president says: “I’m proud of how we’ve evolved and leaped forward recently … Our business model, whilst successful, had hit a plateau in terms of the improvement and development we strive for.
“For the last few years, I’ve been focusing on the transformation of our relationships with our clients, taking the interactions away from being purely transactional.
“Clearly the bottom line is always there, but we want the ultimate result of our efforts to be actually adding strategic value and a long-term vision for return, for both parties.
“Historically, the focus was on the final section of the deal – which is vital – but now we’re leaning in on the full spectrum of what value we can add, in as much detail as possible.”
The agency, Kelly says, is “always striving for incremental gains, and that’s something we’ve done aggressively over the last couple of years.”
He expands by stating that IMG Media is now focusing more deeply on the different specialisms a 21st-century sports media agency needs to offer.
He says that executives who used to perform multiple roles within the company are now operating solely across specialist areas, and have thus created a deeper level of expertise that can be used with clients.
An example of this, Kelly says, is the relatively new occurrence of IMG Media embedding staff with its clients, which comes, as he puts it, from a place of those customers “needing greater support.”
Kelly expands: “Historically we would have never seconded people into the bodies we service, but we’ve been doing that increasingly over the last year or so – that’s a shift in mindset.
“Greater support is needed at the moment because these clients are now under significant budgetary pressures, there’s a very clear definition of the significant financial challenges for rights holders, so they need to be more efficient with their internal spending.
“In turn, our job now is to be the support infrastructure behind them creating more efficient and effective solutions.
“It’s all about us being more integrated with our partners, in order to deliver better results through efficient use of resources – we’re finding that message is really resonating with clients.”
With IMG Media now serving an increasing multitude of these clients from all regions and sports, some critics have, however, suggested that the agency will find it increasingly hard to give each rightsholder a full level of expertise, because of the sheer scale of its operations.
Is there not a possibility of IMG Media becoming a one-stop shop?
Kelly dismisses the suggestion, saying: “We’ve never used that phrase, and never really targeted that concept.
“We have multiple capabilities – those can be employed collectively or independently … Everything we do is about customizing our solution to the client’s needs and problems.
“We’ve enhanced our strategy and growth teams over the last 18 months, trying to find the best consultants to build a level of expertise that will allow us to get under the skin of our client’s needs and objectives.
“Where should we offer our capabilities? Where is the true value-add for us? In some cases, are we not the right vendor for a specific sports property?
Unsurprisingly, Kelly says the aim is in most cases for IMG Media to try and embed itself with each client in as many areas as possible, suggesting that “we think that’s a more effective result – independently, our approach is that each service is much less valuable than as part of a holistic approach.”
He believes that rightsholders who outsource their content production to broadcasters may find that partner has “misaligned objectives” to the league or sports organization and that this “runs the risk of a fragmented value exchange which need not be there.”
He adds: “Once we understand what each rights holder has as its main ambition, we can use that to inform our strategy, and then subsequently ideally a financial benefit.
“That’s a much more holistic solution than can be offered even by best-in-class independent suppliers.”
The president agrees that in many cases, IMG’s aim is now not only to work alongside a client to help fulfill said property’s media production and distribution goals, but also to help identify those aims by using their own experience and knowledge of the direction the industry is headed in.
He points out: “We have a big, broad – and hopefully enlightened – perspective on the current state of play in the industry.
The ultimate aim, according to Kelly, is for as much connectivity as possible between the different parts of the IMG Media business in how these various sectors relate to each client.
He mentions, specifically, that the agency is now starting to proactively make suggestions to clients in terms of how they interact with broadcasters, acting as a go-between much more than in the past.
That approach has been driven, Kelly says, by IMG’s hiring late last year of Barney Francis, the experienced sports broadcasting heavyweight best known for his time as UK pay-TV giant Sky Sports, as its head of broadcast production.
The IMG Media president also mentions expansions planned for the IMG Arena division, to look beyond the sports betting realm in terms of that division’s potential reach.
In terms of industry valuation as a whole, Kelly feels we’re now entering “a golden age for sport … the power of sport as appointment-to-view content is as prominent for live TV as ever, and now it’s cutting through to on-demand content as well.”
He discusses the major global technology giants who are slowly but surely making more of an imprint on the sports rights sector.
Amazon, Google, Apple, Netflix, and Meta (owner of Facebook and Instagram), have all made significant strides in terms of their sports presence in recent years, with Amazon perhaps having emerged as the most significant new entrant through their acquisitions of multiple top-tier properties, including domestically for American football’s NFL and for European soccer’s UEFA Champions League across several top-tier European markets.
He says: “It’s inevitable – one of my narratives over the last three years is that these firms are coming and that what they bring will be highly beneficial for sport.
“This show of force is leading to a significant response by the existing [rights holders] and heavyweight sports media firms, as we have seen from existing content companies in other areas …
“So, a positive cycle is developing, now we need to make sure the earnings potential is appropriately recycled back into the industry and capitalized on, and not leaked out of the ecosystem in ways we’ve seen recently.”
He adds that “for Apple and Amazon, who are using live sport to entice customers into their ecosystem, just getting someone into that service offers a mind-blowing return.
And as for Netflix, “if sport is going to help [that company] reduce customer churn and add more value, that’s incredibly powerful.
“They’ll be in there [with Amazon and Apple] soon enough, they’re already dipping various parts into the water.”
However, when asked about the prospect of these companies being potentially able to outbid all ‘legacy’ media outlets to acquire rights, Kelly is keen to emphasize that “we’re certainly not just about ‘highest-fee wins’ when it comes to advising our partners.”
He also gives his thoughts on the increasingly diverse nature of broadcast partner portfolios for many sports properties.
“Multiple partners for distribution is key to success,” he says. “Focusing on one broadcast rights deal alone means leagues and properties are likely to miss out on other opportunities.”
“We’re seeing an increasing trend in the ‘super tier’ sports properties of effective package segmentation between different media partners, especially when there are enough games within one period that are all of interest.
“In that tier, properties can have multiple linear broadcasters and also streaming partners – outside that tier, the general value proposition is for premium exclusivity when it comes to linear live rights, but for other partners to have short-form clips, news, highlights, and potentially streaming rights carved out.
“This is where direct-to-consumer solutions from the rights holder itself come into their own … There are a number of examples – [mixed martial arts’] UFC being one – where appealing to the hardcore superfan can really help drive a value return.”
He finishes by trying to offer some thoughts on the future of an industry that has seen rapid developments in terms of technology in recent years and will undoubtedly do so again moving forward, in both the short and long term.
“No one’s in a position to answer exactly how the landscape in the future will evolve … Because there’s a lot of complexity to how these different platforms are viewing sport and what their long-term ambitions are.
“What we’re trying to do is map out almost an infinite number of scenarios for our partners so they have the tools they need to make the necessary decisions.
“Rights holders will need plenty of weapons in their arsenal …”
IMG Arena president Freddie Longe spoke to GlobalDataSport about sports betting’s growth curve.