With money comes access to tech that can help grow a sports league. Working on a low budget, however, brings financial challenges. Can current staples - the web and apps - help build a league from near scratch?
That's the question for the National Arena League (NAL), which aims to field seven teams for its upcoming second season this spring. The NAL, not to be confused with the Arena Football League (AFL), is literally banking on ticket and merchandise sales, sponsors and a cut of concessions to advance in 2018.
The challenges the NAL faces are those of upstart sports leagues - and wannabes - that could use tech to offset the fact that their teams are usually not in top TV markets, lack household name players, don't play in high-tech arenas and don't typically have deep-pocketed sponsors.
Preparing for its 2018 season with at least seven teams, low-price tech is essential for the NAL.
"All of our games are streamed live on YouTube and this season all of our clubs have (team) apps," said NAL Commissioner Chris Siegfried. "Teams also have broadcast deals with local TV stations (in the absence of a national TV deal), but that varies from club to club."
The NAL lost some teams this past season, but it's moving ahead with new teams in Worcester, MA., Portland, ME., Trenton, N.J., and a team in Greensboro, N.C. (the Cobras). They will join the Jacksonville Sharks, Columbus Lions and Lehigh Valley Steelhawks. The 2018 schedule will be out soon.
Catch-22
The key to success with sports leagues is to build a following that translates into being able to sell rights to games to any type of media for live game distribution. That's far easier said than done for a startup entity like the NAL. Nonetheless, PwC predicts sports media rights will climb from $19.1 billion this year to $22.7 billion in 2021.
PwC Sports Practice Leader Michael Keenan predicts that next year is expected to be the first when media rights revenues top gate revenue. The company's projections forecast the broadcast and digital spend adding up to some $20.1 billion in 2018, passing stadium gate revenue by about $579 million.
Old Media/New Media
You don't need to be a sports historian to know the NFL would not be where it is today business-wise without its MVP (Most Valuable Partner): massive TV networks with roots extending back many decades.
So, while some NAL franchises have local TV station deals, they are pretty far from those the NFL has with networks such NBC, CBS, ABC and Fox. But according to research released by TiVo Wednesday, over-the-air TV antennas are an increasingly popular way for those with pricey cable TV bundles to watch games of local teams and more - all for a one-time purchase, and in HD. And streaming rules with the youngest age groups.
"It sounds like a grassroots startup," said Billy Purser, an executive with TiVo and a beyond-avid sports fan, when told of NAL teams' deals with local TV channels coupled with free gamecasts online. His family lives in the college sports hotbed of Raleigh/Durham, N.C., not far from the NAL's new Greensboro-based Carolina Cobras.
TiVo is a TV research and measurement corporation that also manufactures viewing equipment such as DVRs.
Purser and other sports fans don't see how upstart sports leagues can survive without live game streaming.
Mobile First
"I took my teenage son to a NASCAR race and one was streaming the NFL the entire way there," explained Purser. "If he hadn't been able to do that, I don't think he would have come with me to the race!
A mobile element or strategy is also essential. Monday's news that Verizon paid over $2 billion for the non-exclusive wireless rights to NFL games for five years as part of their "mobile first" strategy speaks volumes. The carrier plans to provide NFL content via its Yahoo holdings and go90 service.
Beyond Social Media Likes
With Facebook's CEO talking about spending a few billion on sports media rights earlier this year, it's a very safe bet that social media sites will be a greater source of revenue opportunities for upstart leagues going forward.
There's room for expansion on the streaming front for the NAL. For example, Twitter did carry five NAL games in the league's inaugural season this year. It's unclear whether the social media service will do the same, more, or less, for the 2018 season. Twitter paid the NFL to stream Thursday Night Football games free and worldwide in the 2016 season before being replaced by Amazon this season.
Facebook, Twitter and other social media services have rapidly upped the menu of live sports matches they cover, as well as sports highlight packages they air on a regular basis.
In the absence of heavy attention from social media services, the NAL uses long established staples such as press conferences to disseminate its news. The NAL recently held a press conference to announce the launch of a team in Worcester, MA. for the 2018 regular season, which helps to some extent with word of mouth.
A Strategy Change
It can be argued that an upstart sports league without a tech-enabled business strategy faces a tough, uphill battle. After decades of existence, the AFL switched gears and embraced paid live streaming game packages for fans at home ($5.99 per month and $29.99 per season) to help the up an own league evolve. And streaming was not the only enabling tech in its new strategy that will power the league starting next spring.
The AFL's pay OTT service for 2018 is just part of an extreme the makeover that the AFL began this year that also includes new apps, fantasy football, helmet cams, hat cams, original programming, on-demand content, and a new and improved AFL league web site. And while the NAL would likely love to follow suit, the cost of the required tech tools and infrastructure might be beyond its reach.
Pay for Play
Following suit in this case means first building a fan following, which is an uphill battle for new sports leagues, even in the era of game streaming, social media, and video sharing.
With that in mind, the NAL and the surviving teams from its inaugural season, make heavy use of social media. It's a tool not available way back when, but a staple of fan engagement and monetization for the pro and college sports leagues - and countless other forms of entertainment.
Social media is the great democratizing communications and fan engagement tool. As has been shown in recent years by the NFL, social media and online TV services can provide a large source of revenue and build also large audiences if they carry live sports contests.
The Bottom Line
There are non-national sports leagues of all sizes and focuses that could benefit from tech to build an audience or a larger audience that's necessary to get the media rights money that (ironically) - is needed to help build a solid following.
That said, these entities have access to democratizing tech tools that can help them promote and potentially expand their brand and drive revenue options. Leagues of past decades lived or died by TV network deals, without the options that are available and more affordable today.
Whether these same leagues can benefit for soaring spending on sports rights by wireless provides, OTT services, social media sites such as Facebook remain to be seen. The bigger spending doesn't mean a downpour of cash for upstart leagues, but making it rain a little would certainly help.
Stay tuned!
Bob Wallace is a technology journalist with over 30 years of experience explaining how new services, apps, consumer electronic devices and video sources are reshaping the wide world of sports. Wallace has specific expertise in explaining developments at the intersection of sports and technology. He's the Founder of Fast Forward Thinking LLC.
