I interview Marc Watson during the industry’s August lull, a
period characterised by ‘out of office’ email responses and a paucity of
announcements. However, he assures me that Eleven Sports, the subscription
broadcaster now active in seven countries, will soon be releasing more news of
worldwide expansion.

Indeed, I am as intrigued to canvass Watson’s views about
the positioning of Eleven Sports as I am to ask him about his time at BT and
views on the hype around OTT and its threat to the traditional linear pay-TV

Having gone live in Belgium, Poland and Singapore just over
two years ago, Eleven has since entered the markets in Taiwan, Luxembourg, USA
and Italy, but aborted a planned service in Malaysia.

So where next for the broadcaster at which Watson holds the
positions of executive chairman and group chief executive? “We’ve done a lot of
markets pretty quickly. We’re looking to grow steadily over the coming period.
There are a handful of opportunities we’re looking at right now,” he tells
Sportcal Insight, declining to divulge the next market.

“What we do see is an awful lot of opportunity for growth
around the world. There is a lot of under-served demand in sport in many
markets and there are still some markets where there’s a place for new linear
channels as well.

“We’re not generally looking to go into a very big market
and take on the very big guys. And we’re not looking to go in and replicate
what’s already been done. What we’re looking for around the world is under-served
fans. People talk about linear and OTT, but actually we don’t look at our
business in that way. Our business is about distributing live content and
content around it.”

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Eleven Sports, complete with its constant flow of rights acquisitions press releases, is a hard market player to evaluate. The truth – and a perception reinforced when talking to Watson – is that it has a different impact in different markets and operates within varying rights budgets. 

Eleven Sports’ studio for Bundesliga coverage in Poland

The Polish business stands out, armed with rights to the Bundesliga, LaLiga, Formula 1 and popular domestic content such as Ekstraliga, the country’s speedway league. Operations in Belgium came close to being dramatically expanded by nearly landing rights to the domestic soccer league.

However, Eleven Sports’ nascent offerings in the likes of
Italy and USA remain more focused on second-tier and niche rights, while the
“significant milestone” of exclusive Premier League coverage in Singapore ended
after just one season as the project was not financially viable.

Offering a more general view of Eleven Sports’ strategy
across markets affected by varying dynamics, Watson surmises: “What we’re
trying to do is create a global brand and we’re looking for opportunities
around the world to do that. We’ve so launched 17 services in seven markets,
we’re producing 20,000 hours of live content every year and we’ve got more than
15 million paying customers. That’s in our first two years.

“We’ve now got a set of markets and products that we’re
looking at for the next phase of roll-out for Eleven Sports. In terms of
individual markets, they are different, so you have to tailor the proposition
and the content offering to that market if you want to be successful. We’re
looking for global synergies in how we buy content, the branding, buying rights
and technically distributing content, but we also think it’s really important
to localise that content to the particular market.”

Reading between the lines of Eleven’s PR can be challenging
at times. Hype around the US launch in March and access to ‘50 million more
fans’ created no shortage of column inches, but that is starkly offset by a
stateside rights budget thought to be just a mid-sized seven-digit figure.
Subsequent announcements of rights deals for the likes of surfing highlights,
drone racing, eSports and the US ultimate frisbee league would back up the view
that the content investment has been modest.

Watson won’t be drawn on the budget, but acknowledges that
Eleven is “not saying we’re going to be the next ESPN, we’re a long, long way
from that.”

He explains: “When we look at that market we still see a
awful lot of opportunity to present fans that are currently under-served. If we
do that in a cost-effective way then we’ve got a very good chance of being
successful and that is mostly the story of our business so far.

“We bought a pre-existing business [One World Sports’
distribution assets], took the cost down a lot in that business and changed all
the content overnight. So far, the results have been very encouraging,
audiences are up by about three times since we launched. It’s a small business
in a very big market but we’re very optimistic about the opportunities for
growing that service.

We look to buy content that is good value and is going to work for us in terms of generating profitable revenue

“We look to buy content that is good value and is going to work for us in terms of generating profitable revenue.”

And what of the ambitions in Asia? Have they been scaled
back after chastening experiences in Malaysia and Singapore?

“We’re looking at our Asian business now and we’ve got a
plan to expand it. When you’re moving at the kind of speed that this business
is moving at and launching a lot of products, then you don’t get everything
right. The important thing if you get something wrong is to call it early and
deal with it.

“For various reasons the Premier League didn’t work in
Singapore. Splitting the rights didn’t work either for us or our partner and it
made more sense to hold the rights together. Malaysia is quite an attractive
market for a number of reasons, but the plan we had didn’t come off and we
moved on quickly to other stuff.”

Weighing up the value of rights has been part of Watson’s
day-to-day job for the last 18 years. A trained barrister, he worked as general
counsel for Richard Desmond at Northern & Shell, helping OK! magazine to
overtake rival Hello! by landing exclusive photographs of Michael Jackson’s
first baby. In 1999 he joined Reel Enterprises, the media consultancy set up by
David Kogan and during an era of internet growth and digital TV products.

Watson’s first touch point with sport was helping Reel
Enterprises to pitch successfully to work with the Premier League to prepare
its media rights auction in 2000. The International Olympic Committee, the
Football League and Scottish Premier League were all added as clients as the
sports practice was built up.

BT Sport’s Premier League pundit Michael Owen

He went on to join BT in 2006 as commercial director of the
new BT Vision subscription IPTV service, but it would be another six years
until Watson was thrust into the limelight as the public face of sports rights
purchases at the telecoms giant muscling in on Sky’s territory.

“It took a long time to get to the point where the company
felt comfortable bidding for rights,” according to Watson. “BT Sport is now an
established part of the sports marketplace in the UK, it’s a very good product
and works for BT and the content range continues to improve.

“We started with a fairly small set of rights. When we
launched, nobody gave us a hope in hell of being successful. But since that
time in the last five years it’s become a very established part of the media
marketplace in the UK. I’m well outside of that business now but I would see
that continuing.”

After failed attempts by Setanta and ESPN to establish a foothold in the UK pay-TV market, BT has triumphed, becoming one of the first telecoms operators worldwide to use content to drive broadband and telephony subscriptions and arresting the downsizing of its consumer business. This is a model now replicated by various telecoms players worldwide (and which prompted Sky to push broadband sales in a similar fashion).

So let’s rewind to the start of 2014. BT Sport’s channels were up and running to showcase its Premier League rights, the exclusive Uefa Champions League and Europa League rights had been won in an £897-million, three-year contract and BT was hammering out the finer details of a rights split with Sky for the new European Rugby Champions Cup.

So why leave at such an exciting time, just as the business
was just starting to take off? “A good question,” Watson replies, affording
himself some more time to deliver a measured response. “I’d been at BT for
seven years by that point and I really wanted to move on to another challenge.
We had just purchased the Champions League rights and tied down European rugby
and a host of other content. The channels had launched successfully and were growing
very quickly.

“To me at the time it seemed like the perfect moment to
leave because the business was in the market, successful and looked

And how does BT measure the success of its weighty investments in sports rights? “I don’t know what it is now,” he replies. “But back then it was to build a bigger business – more customers, more revenue and more profit. And that’s what they got.”

Amazon has ‘disrupted’ the market with its swoop for ATP and NFL rights

So, having been in the vanguard of the UK market disruption
with BT, what does Watson make of the new players threatening to disrupt the
marketplace: be it Amazon’s swoop for ATP rights in the UK and global streaming
of NFL Thursday night games, or Facebook and Twitter’s never-ending stream of
sports partnerships?

I ask him if he can ever see the ‘disruptors’ putting down
numbers akin to those paid by BT or Sky, or if their ambitions are simply
overhyped and they must follow different models.

“My guess as to what is happening is that these companies
are testing the water in sport to see what impact sport can have on their core
businesses,” notes Watson. “You see that with Amazon buying tennis rights
recently and they’ve got a small NFL package in the US.

“Nobody’s made a big move yet and I’m not sure whether they
will or not. My guess is that what’s important to them is that their customers
have access to content, and if they have that on a reasonable basis then I’m not
sure whether they’ll feel obliged to spend billions on premium live sports

“The point at which companies usually feel obliged to do
that is when they can’t get access. That’s one of the reasons why we started
Eleven Sports and made it an independent content business so that we could
distribute it to customers everywhere and to all the companies interested in
making live sports a part of their proposition.

“The Premier League is a big chunk of someone’s profit
margin if you want to buy all of that out and I don’t see that happening any
time in the short term but in the long term, who knows?”

He insists that “most of the value” can still be derived by
monetising the majority of customers who still consume live sport via a cable
or satellite service in most markets around the world. But he expects those
viewing habits to continue to change.

So three and a half years on from his surprise exit at BT,
where will Watson’s career path take him next? Collecting more passport stamps
with Eleven Sports, it seems.

“The opportunity to travel and apply some of what I learned
in the UK around the world has been fascinating and we’re enjoying the ride,”
he responds. “We’re aiming to create a leading global sports platform. We’re at
the early steps of that journey and I’m extremely happy where I am and looking
to continue that journey.”