Competing for Fan Loyalty During Hard Times

One segment of the licensing business where the shutdown of live events has had a significant impact is sports. The cancellation of sports seasons and events has removed their core reason for being, creating financial hardship for many and lessening the urge to purchase licensed merchandise, both in the short term and very possibly for a longer time.

As social distancing has made their real-world iteration at least temporarily impossible, marketers of live events and experiences of all types have tried to build alternative presences in the digital world. Virtual editions of things like author tours, theatrical movie releases, trade shows, and fan fests do not replicate their associated live events perfectly, but they have been adequate substitutes for the time being. Live sports, on the other hand, do not have a direct translation in the virtual world. Not only is there nothing like the experience of watching live sports in a stadium, but consumers cannot even watch the sport from afar in the safety of quarantine, since the players have been self-isolating as well. At this writing, some sports around the world are tentatively starting to relaunch, but the full sports experience as fans knew it in the past is not coming back anytime soon.

That said, sports licensors and their licensees and other partners have kept their brands and a bit of the experience of their sport—and sports in general—alive during the hiatus in a variety of ways. Some of the most common strategies have included:

  • E-sports. Leagues, events, and athletes have been entering or expanding their presence in the world of competitive video gaming. The eNASCAR Coca-Cola iRacing series on Fox and FS1 has seen viewership grow during the crisis. Infront and the International Ice Hockey Federation hosted an Esports Fan Championship with eSport Studio in May, with fans from each of the 16 countries that had qualified for the real-life IIHF World Championship competing and with the finals broadcast on Twitch. Esports organization Misfits Gaming hosted an event pitting NFL athletes against gamers in Fortnite and Call of Duty competitions, with proceeds going to charity. NBA athletes played Take Two Interactive’s NBA 2K2020 on an event on ESPN, which also raised money for COVID-19 charities. Fox Sports aired a similar competition in which current and former NFL stars played Electronic Arts’ Madden 20. E-sports has been one of the most popular alternative marketing channels for sports entities during the pandemic, and there are many more examples.
  • Gambling. Sports betting had been on the rise prior to the crisis, as laws in the U.S. and elsewhere have loosened. Without traditional live sports to bet on, gambling entities have kept their businesses alive by turning to simulations of canceled events. These are virtual games where the action is based on probabilities calculated from real-life player and team statistics. As one example, IMG Arena hosts virtual Association of Tennis Professionals (ATP) tennis matches for bettors. Gambling purveyors have also offered betting for e-sports competitions and some continuing live events, such as horse racing from Hong Kong, the NFL Draft, and soccer leagues that played on in countries such as Turkey and Tajikistan. FanDuel and DraftKings, both partners of the U.S. major leagues, initially focused on the fantasy sports arms of their businesses as their gambling operations have fallen off, although fantasy sports has also had to evolve as it is based on real-life sports stats that have stopped being recorded.
  • Alternative live events. Fans are turning to all kinds of obscure sports events that are able to continue during the lockdown as they strive to maintain the excitement of live competitive sports. A notable example has been competitive marble racing. Jelle’s Marble Runs, which launched on YouTube in 2006 and is the leading player in the space, has teams, commentators, and official team merchandise with TeeSpring. It has received significant boosts to its number of followers and viewers during the pandemic; Formula E racing has taken note and partnered with Jelle for a Marbula E series. Jelle also has had a presence on ESPN8: The Ocho, a pandemic-driven repositioning of ESPN2 featuring unusual live sports. Other marble racing leagues include M&H Racing and Fubeca’s Marble Runs.
  • Ancillary events. Programming related to live sports, both ongoing and newly created, has generated publicity and sometimes significant viewership. The NFL Draft, which has been growing in interest over the years as a live event, generated record viewership this year, with more than 15 million people tuning in on the first day. The 10-hour Michael Jordan documentary series, The Last Dance, has not only been the top-rated ESPN documentary in history but out-rated this season’s NBA games as well, thanks to the dearth of competitive sports programming. ESPN, the NBA, and the NBA Players Association created a HORSE basketball shot challenge involving NBA and WBNA players, which did not garner high ratings but did generate notable publicity.
  • Charitable initiatives. Fanatics’ CEO Michael Rubin launched the “All In Challenge,” in which sports and entertainment celebrities offer once-in-a-lifetime experiences that fans are eligible to win if they make a donation, with funds going to several nonprofits addressing food insecurity. The initiative has generated significant participation from celebrities and fans, raised $38 million as of last weekend, and built a high profile on social media. Separately, the Real Heroes Project features athletes who each dedicate a match shirt or jersey to an individual healthcare worker in their community as a gesture of thanks. The initiative is a collaboration between 14 pro sports and e-sports leagues, from the five U.S. major leagues to WWE, NASCAR, the U.S. Golf Association, and the World Tennis Association.
  • Re-runs. While not as exciting as live sports, fans have been revisiting the many classic sports moments being televised by ESPN, Fox Sports, NBC Sports, and other networks, along with local TV and radio channels. NBC Sports Chicago re-ran all of the 1998 Chicago Bulls post-season games (the same period captured in The Last Dance), MLB Network’s programming has included things like “MLB’s 20 Greatest Games,” and ESPN Radio highlighted classic World Series games from the past decade, to name just a handful of many examples.
  • Foreign live sports. This is a new addition to the list (aside from the few examples followed by bettors) as live sports are slowly coming back in some of the regions where the pandemic occurred first. ESPN signed a deal to distribute the 2020 regular season, playoff, and championship games of the Korea Baseball Organization, played live but without fans, with six games planned per week. ESPN commentators are doing the play-by-play from their homes. Also from Korea, K League soccer is streaming globally for the first time, with games available for free on Twitter and YouTube with English-language commentary. The K League also recently signed broadcast deals in a number of countries.

Currently, all of these initiatives primarily serve to maintain awareness for the leagues and other entities—and for live sports in general—and to keep fans engaged during this fallow period. There are few expectations for significant revenue-generation at this time, including from licensed merchandise, although there are products associated with some of these initiatives, such marble racing and the NFL Draft. And, fans engaging with alternative sports programming or events may be motivated to make the occasional e-commerce purchase, perhaps of a current need such as a sports-licensed face mask or a t-shirt or collectible from the available range of licensed merchandise.

Raugust Communications’ e-newsletter for May will be distributed next Tuesday, May 19. The Licensing Topic of the Month takes a look at the apparel category, one of the most challenged sectors during the pandemic, and how licensing may play a role in its comeback. The Datapoint research spotlight will highlight the messaging marketers of licensed properties and products are using to maintain awareness during the pandemic, and how these tactics are changing as the crisis goes on. If you are not a subscriber to this free publication, you can sign up here.

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