The days of massive sports rights deals are over and the future is Australian football controlling its own broadcasting destiny, according to sports technology expert Luke McCoy.
John Davidson

13 Jun 2020 - 12:28 PM  UPDATED 13 Jun 2020 - 12:28 PM

A group of Socceroos greats have recently proposed Football Federation Australia (FFA) launch their own independent streaming service for football content.

This comes at a time when the FFA and Foxtel are involved in a bitter stand-off over a reduced offer put forward, which is alleged to have been cut from the existing $57 million a year down to just $11 million.

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McCoy is the CEO and co-founder of live sports graphics company LIGR, and the founder of sports video firm VPA Technologies.

He believes the FFA becoming a broadcaster with its own over-the-top media service (OTT) offered directly to football fans, in a Netflix-style platform, makes perfect sense and could work well.

McCoy feels this would result in money saved on production costs and could even see FFA on-selling the rights to one or two A-League games a week to a broadcaster, possibly even back to Fox Sports.

“If you look at the dynamics of what an OTT platform gives you, it gives you that direct to consumer relationship – you own the content,” McCoy told The World Game.

“But like Netflix the OTT business model is based on driving subscriptions, which means more and more content.

"Netflix wins, and has won, because it started to put all the money it was making into producing more content and then more content that gets you more subscribers and it’s a flow-on effect.

“Football has this large base of people, it’s got the two million participants, which is much, much larger than any sport in the country.

"The key to activating all of them from a subscription point of view is producing as much content as possible up and down that vertical, but you can’t spend $50,000 a game when you’re producing an NPL game.

“But, if you can get all of them on the one platform and scale that production, then yes, there’s going to be people who have to lower their expectations on watching an NPL game versus watching the W-League, versus watching even a $10,000-produced A-League game.

“But the point of it is, if you can get it all on the same platform and aggregate those eyeballs, then you can get all their emails, you understand when they’re watching, then that becomes hugely valuable to an audience.

“You’re still going to get the people who watch at the pub or who subscribe to Fox or Kayo who watch the one or two games every weekend. That’s traditionally how the rest of the world works.

“We just decided to spend $50,000 on production for an A-League game, that’s not so good when there’s no promotion and relegation, and there’s no real interest in the league and that’s why Fox is bleeding at the moment.

“Fox is bleeding because of Covid but it doesn’t want to pay $60 million because the advertisers and the eyeballs are not there.

"But they may be better off saying let’s do two games a week and do them well, and maybe we try and get the rest on Kayo.

“And if not maybe we give it up to FFA and they underwrite the rest of it to the clubs. There’s a few different ways to do it but fans are going to have to get used to not every game being a 15-camera production in a traditional sense.

“That’s the opportunity and the 'Golden Generation' see that because the one advantage is Australian football’s base.

"If you went to another sport, they don’t have that base level participation and numbers to produce enough content to drive subscriptions and become an interesting proposition.

“Football has. They’ve got the W-League, the youth league, internationals, youth internationals, the A-League, the NPLs and this second division that will happen at some point.

"That’s a lot of content if you can get it on one platform and scale it to make it viable, which you would based on the audience numbers.”

The National Basketball League has moved heavily into streaming, last year becoming the first Australian sporting league to stream its games globally on Twitch.

The NBL has its own OTT subscription-based channel - called NBL TV - that shows NBL games and basketball leagues from around the world at the cost of $5 per month.

McCoy describes streaming as the future of sports broadcasting and is the best way to engage with younger fans who are watching less and less traditional television.

“It’s a very, very interesting time,” he said.

“The NBL, for example, were actually forced into this model and they were doing really, really well until Covid really wiped them out, and it really wiped them out because they didn’t have a broadcast deal.

“They didn’t have the cheque coming in because they produce their own games and rely on other people picking it up, plus the crowd having people turn up and the NBL pass subscription – all that stops if your sport stops.

"When you have a rights deal with a broadcaster they’ll still pay portions of that to keep you afloat because it’s contractual.

“But the NBL is a good example of it, but I think we’re going to see this everywhere. Either the OTTs like Kayo become where the sport goes, instead of linear [television]. So DAZN are playing in that.

“But we are going to see more league-owned [examples] where they own the rights and sell them non-exclusively off to those who pick it up.

"Like Optus, who don’t pay for production, they want wherever it’s coming from to produce it and they will pay for the content.

“Most young people are on Instagram, they’re on Tik Tok – this all takes attention away from watching traditional live sports on a traditional channel. And that’s not going anywhere.

“It’s only going to go down where they’re watching less and less in that fashion, then production costs have to come down, rights have to stop because obviously advertising revenue is not going to match what it once was if the eyeballs aren’t there.

“And then sports leagues and broadcasters have to look at new and innovative ways to attract a young audience and that young audience is diversified in their attention – which is Twitch. It’s just a hard world.

“The limit has been reached, it’s done. I can’t see sports rights continuing to go up into the billions when they’re getting pressure where sports are creating their own shows, content, selling their own advertising and having more of the upside.

“Before, the only way you could distribute your product en masse was through the linear [TV] channel. They paid the money for it, you took the cheque and that was it.

“And now the light on that model has been shut, probably with Covid faster than anyone predicted. But nonetheless it was happening regardless, this movement towards OTT, towards cloud and remote production.”

McCoy expects the A-League to be moved from summer into a winter season, aligning it with the other levels of football, which would help the streaming proposition.

“This will definitely happen, I guarantee that they will align the football vertical together so everyone is playing in winter,” he said.

“And the advantage of everyone playing in winter is when the kid goes and plays for his local club, his local club has a first-grade team, they play in association and that association has a rep team. They’re playing in NPL 1 and they’re getting streamed.

“Then the next level’s getting streamed, then the A-League and it’s all on at the same time. The player is then part of that vertical. The issue at the moment is that the A-League is on when no one’s playing football.

“That’s harder to get someone to pay for it when they’re doing other stuff, or they’re watching cricket or doing different things. If you want to get football fans in you’ve got to align the seasons. And they’ll do that.”