Should We Analyze The Partnership Value Of Illegal Streaming?


One issue we are asked about at B6A frequently is whether we can determine the value of illegal streams of games, matches, or contests particularly in terms of television viewable assets such as on-field signage or jersey patches. The thinking is that illegal streams are a large enough percentage of overall sports viewership that buyers and sellers are not understanding the full value of these deals without evaluating pirated video.

A recent study by GumGum Sports and Muso found evidence to support this point of view. More specifically, the two companies “focused on eight matches spanning the 2018-19 season… [and found] worldwide illegal streaming of the English Premier League (EPL) delivers £1M in uncaptured sponsorship media value per match.”

It is probably not surprising to most that there is potentially significant exposure value in pirated streams. As MUSO co-founder and CEO, Andy Chatterley states “these huge audiences still see the same shirt sponsors and commercials as people watching the game via a licensed channel.”

The problem is determining whether this type of analysis should be done and determining whether it is driving significant partnership value. In particular, two issues emerge if this type of analysis becomes a more consistent approach to valuing partnerships. First, is the huge audience the right audience for many corporate partners. Second, partnership in sports also encompasses that sports properties media partners have paid significant amounts of money for the exclusive rights to broadcast sports events.

The first issues stems from a challenge on a focus on quantity or reach in partnership valuation that we have discussed in several previous blog posts. More specifically, partnership valuation has traditionally focused on the number of people that interact with an activation. In this case, the greater the number people that watch a game (whether illegally or legally) the more value that is created.

However, quantity is only one component of B6A’s approach to valuing partnership. Fit is an equal, if not more important, factor in analyzing partnership value. More specifically, the goal is to reach the right people with the right message at the right time in the right channel where they consume content. The right people are typically the ones that are current or potential customers for a company’s specific products or service offerings.

It is not clear that the people watching illegal streams are the right people for many brands. For example, many corporate partners only operate in a specific country, region, or city where a team or league competes. If “huge audiences” of people outside of these markets are watching games, these viewers have relatively little value to a corporate partner since it is very unlikely that they will be customers. Therefore, this audience is not a good fit and should not be valued in the same way as those consuming content legally.

The second issue that arises comes from the definition of partnership in a media context. For example, EPL media rights partners have paid tens of millions of pounds for the exclusive rights to broadcast games in linear, over-the-top (OTT), and / or digital channels. Valuing illegal streams for the end goal of selling more partnerships or selling partnerships at a higher price point is arguably the sports properties telling teams that they are tacitly (if not explicitly) endorsing illegal streaming because it can help their team, league, and event generate more revenue. 

Obviously, this is not an ideal way for a partnership to operate and opens the door for media companies to potentially explore ways to monetize illegal uses of sports organizations’ intellectual property. For example, sports properties are rightfully concerned about apparel companies illegally using the likeness and image of a league, team, or player. Yet, counterfeit apparel is a multi-million (if not billion) dollar per year industry. If sales of counterfeit apparel are happening then why shouldn’t media partners sell ad inventory promoting these companies?

One maxim that my co-authors and I discuss in The Sports Strategist: Developing Leaders for a High-Performance Industry is the concept of “doing well by doing good.” This concept is that ethical approaches are not just the “right” approach but also are often the best way to maximize revenue growth.

GumGum and Muso have proven that there are ways to analyze the value of illegal streaming. However, it is not clear that the illegal streaming audience is the best fit for many corporate partners. It is clear that valuing illegal streams will likely antagonize media partners. This provides a solid foundation for the idea that the “right” approach is to think very hard about valuing illegal streaming.