How In-Game Betting Broadcasts Impact Sponsorship
BY ADAM GROSSMAN
NBC Sports Washington Plus will carry an “interactive, alternate telecast of the Wizards-Bucks game” on January 11th. This will be the first of eight broadcasts that will have “statistics, odds and point spreads that run alongside game action.”
The goal of these broadcasts is “to give fans a little taste of what they can expect and maybe explain to them what predictive gaming is,” said Mark Friedman, director of creative services and advanced technology for NBC Sports Washington. To accomplish this goal, NBC Sports has set up a promotion where fans can make a “bet” for free for the chance to win $500.
NBC Sports’ primary motivation is aligned with that of sports organizations more generally when it comes to legalization of sports gambling. More specifically, fans that make bets are more likely to be engaged in sports content. In NBC Sports’ case, the more fans that watch games, the higher the carriage fees are that teams can charge cable, satellite, and / or streaming providers.
The potential increase in media rights deals is one reason that Mark Cuban said that many professional sports organizations values should double with the legalization of sports gambling. This can occur even if sports leagues cannot charge an integrity fee on betting transactions.
For example, media rights agreements are currently one of the (if not the) largest sources of revenue for leagues and teams. Even though sporting events have been consistently some of the most popular content on television, one concern was that ratings in “traditional sports” had been declining. One way to continue to maximize the growth of this revenue stream is to continue to maximize audience growth.
Legal sports gambling provides the catalyst for this potential audience growth. The thesis is that fans will be figuratively more invested in sports content if they literally have an investment in a game or event. Some have even attributed the NFL’s increase in ratings in 2018 in part to sports gambling although it is likely too early to make a definitive statement on the matter.
Higher ratings, however, is only one reason that legalized gambling with have an increasingly important impact on sports sponsorship. Fan engagement is a key driver of sports sponsorship spend and is one of the critical reasons that companies partner with leagues, teams, athletes, and events. The question is what does engagement mean from both a quantitative and qualitative perspective and how does that impact sponsorship metrics when it comes to sports gambling.
The NBC Sports in-game promotion is a good example of the evolving definition. NBC Sports is not only trying to maximize the size of its live broadcast audience but also looking to connect with fans as much possible in social and digital channels via owned and earned accounts. NBC Sports can now leverage sports gambling to generate new content that will increase the quantity of conversation before, during, and after a game for its owned accounts / platforms.
This enables fans and the media to talk about NBC Sports and its partners from their accounts / platforms even when the game is not happening because the new storylines that come from sports betting outcomes. Tracking these types of increases in conversation from a volume, sentiment, engagement, and awareness perspective is one reason why Block Six Analytics (B6A) examines owned and earned media conversation through our Social Sentiment Analysis Platform (SAP).
However, sports organizations should not only bet on an increase in the quantity of sports fans because companies will not only be interested in the number of newly engaged sports fans. In our Corporate Asset Valuation model (CAV), B6A shows the importance of both quality and quantity in sports sponsorship.
Legalized sports betting will provide an increase in the types of demographics that companies are looking to target to increase revenue and achieve their brand goals. In particular, studies have shown that legalized sports betting will bring “increased fan engagement from younger, more affluent adults.” Higher engagement with these types of fans should have a tangible impact on the top-line revenue of companies that are or should be looking at sports sponsorship.
Having the unique ability to engage with lucrative demographics should be at the heart of what buyers and sellers of sports sponsorship should be looking for in a partnership. The ability of legalized gambling to increase fan engagement maximizes the probability for sports rights holders and partners to achieve this goal.