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January 31, 2023

Creating Localized Assets Key to Monetizing Int'l Fans

Pro franchises across the sports landscape are taking steps to build fandoms abroad.

There are examples of big four teams successfully developing fans in other countries. According to

Mailman’s NBA Red Card 2022

, the Brooklyn Nets have gone from being the 19th most popular team online in China in 2019 to third this year.

However, few clubs have managed to directly monetize those audiences–at least not beyond selling a few individual game tickets and some social media impressions. Speaking broadly about U.S. teams, Spurs Sports & Entertainment COO Brandon Gayle said, “We’re still in the very early stages.”

But Boris Gartner (CEO, LaLiga North America) said with some patience, capital and “the right structure” efforts to engage international fans can eventually drive organization revenues. “The key is to create localized assets that take advantage of the team’s following, are relevant for brand partners and can be monetized.”

The sale of international multimedia rights is a rights owner’s most lucrative means of monetizing fans abroad. However, those rights are largely controlled by the league, not the teams. The league-level revenues generated from them are divvied up amongst the clubs.

In fact, historically speaking, U.S. teams have not been able to sell much directly to fans outside of their home market.

But that is changing. “The NBA has placed a huge focus on expanding the game [and] giving teams the rights [needed] to monetize that expansion directly through their

international team marketing program

,” Gayle said.

The NFL and MLB have also awarded teams rights to pursue commercial partnerships in specific territories around the globe over the last 13 months.

The Premier League and LaLiga are considered “the gold standard” for engaging and monetizing international fandom. “We’re all learning from them,” Gayle said.

Gartner spoke specifically about LaLiga’s internationalization playbook, and more broadly about the efforts of European soccer leagues and teams. But he said the strategies could be replicated by prominent U.S. sports franchises–perhaps even more efficiently. “American leagues like the NFL and the NBA have already built a platform with a significant following internationally. It can be leveraged and expanded by individual franchises, which at the end of the day are the premium assets that brands want to be associated with [anyway].”

LaLiga’s international game plan began to take shape in 2017.

In August 2018, the league opened an office in New York City. It felt as if having “a constant presence in the territory, with personnel that understands the audience and how to build and grow local engagement” would be critical to finding success, Gartner said.

LaLiga’s next move was to identify a local partner that could add credibility, open doors and would be willing to invest in building the league’s commercial business in the U.S (including: sponsorships, licensing, merchandising and content development). 

The Spanish soccer league ultimately entered into a 50/50 joint venture with Stephen Ross’ Relevent Sports Group known as LaLiga North America. The JV has since been expanded to cover Mexico and Central America.

Relevent’s willingness to stake LaLiga North America enabled the venture to get off the ground. The capital was used to build out a local team and a content studio (more on that in a minute), and alleviated the pressure of the business having to monetize fans in the U.S. immediately.

Its long-term commitment to the business has given it a chance to thrive. Relevent agreed to finance and to help develop commercial opportunities for LaLiga in North America for at least 15 years (LaLiga has an additional five-year option on the deal).

"[LaLiga North America] has always been looked at as a business that has the mission of growing the brand of LaLiga and its clubs, [to help the league get] closer to our fans locally, but with the goal of generating profits for the clubs and creating a platform they can leverage [over] five, ten, fifteen years–this cannot be a short-term project and then pull out [if it is going to find success],” Gartner said.

The bulk of U.S. team monetization opportunities abroad are going to be sponsorship based. So, aligning with a partner that understands how to package and price assets in a given international market is a smart idea.

But there should be other ways for rights owners to derive revenue from the international fans. Gayle foresees U.S. teams increasingly looking to leverage content and distribution opportunities around exhibition games, as they are often not subject to the same restrictions as regular season and postseason contests.

“Most preseason games are broadcast regionally, so there’s some flexibility [there],” he said.

The Dallas Cowboys inked

a deal

with

TelevisaUnivision

this past August. The Mexican-American broadcaster aired all three of the team’s ‘22 pre-season games in Mexico.

Look for U.S. teams to start playing more preseason and exhibition games abroad too. “It’s something we’re excited about doing, hopefully in Mexico moving forward,” Gayle said. 

The appeal to doing so is obvious. U.S. fans despise paying regular season prices for pre-season games. International fans are far less likely to care.

“There will probably be a different demand set and a different audience internationally, that doesn’t get to experience the product regularly, and may not understand who is or is not playing, but just wants to see the product and experience the gameday atmosphere,” Gayle said.

While the league controls international multimedia rights, the Spurs have started to “think through opportunities to engage [Mexican] partners, to connect directly with fans [in the country] and monetize content,” Gayle said.

In collaboration with the NBA, the team signed a deal that will see 24 of its games broadcast on local radio in Monterey this season.

The Spurs won’t generate any direct revenue from the sale of those rights. However, the organization believes the radio exposure will deliver added value to partners, which will ultimately enable it to charge more for sponsorship packages.

Because the monetization opportunities around live games are going to be limited, LaLiga North America has built its U.S. strategy around creating new, game-adjacent digital assets that it could sell.

The JV invested in a content studio in Guadalajara, Mexico in 2019. The location was chosen because it allows the business to spend more efficiently, particularly on talent, and to deliver authentic content to the league’s U.S. Hispanic audience. The studio employs 20 plus people and creates more than 30 digital shows every week in both English and Spanish.

Initially, the investment paid off in terms of market development. “When we started creating content that was relevant for local LaLiga fans and broader soccer fans [in the U.S.], engagement started to go up and fandom started to go up,” Gartner said.

Revenues eventually followed. “A lot of brands [are now] buying the story that soccer in this country is growing, that reaching a passionate U.S. Hispanic audience through content is good for business and that a top international league with a U.S. company and presence, that understands the audience, is the best path to reaching that [demo],” Gartner said.  

Verizon, Chubb, Motorola and Herbalife are among the brands that have signed on as partners.

Having an in-house content studio has also enabled LaLiga North America to serve in an agency capacity, creating branded content for a host of regional third-party clients including; Verizon, EA Sports, and Camarena Tequila.

While U.S. teams remain in the early stages of monetizing fandom abroad, Catherine Carlson (EVP, global partnerships, BSE Global) is confident fans outside of the states can become a meaningful source of team revenues. “The international market is huge. There is tremendous upside in key markets around the world,” she said.

Teams just need the patience, capital, and right structure to tap into them.

It’s worth noting Gayle was recently named to U.S. Ski and Snowboard’s Board of Directors.