Eleven goes streaming on to the pitch as sport heads over the top
Man who brought Premier League football to BT is out to shake up sports broadcasting once again, writes Christopher Williams
‘It was great fun doing that,” says Marc Watson, recalling his time as the head of BT’S television business as it mounted a surprise raid on the Premier League rights auction and within months had set up a cuttingedge broadcasting operation. “We really felt like we were changing the market. And we were.”
Now he is attempting another high-risk, high-technology attack on the pay-tv market as chief executive of Eleven Sports. Backed by Andrea Radrizzani, the Italian owner of Leeds United, with further investment and production support from Endeavor, Watson is this time attempting to overhaul the sports broadcasting establishment in several countries at once.
From its base in a Mayfair backstreet, Eleven, a reference to the number of players in a football team, has assembled collections of live rights in 11 markets including Italy, Poland and Portugal, and as far afield as Taiwan. Well established in some territories, Watson is now tackling the turf he knows best in the UK. Eleven launched its streaming subscription service in August with live top-flight Italian and Spanish football, snatched away from BT Sport and Sky Sports. At the end of last month it sealed a deal with Endeavor for rights to the Ultimate Fighting Championship (UFC), the mixed martial arts competition previously broadcast by BT Sport.
“What we’re always looking for is a gap in the market,” says Watson. “Those gaps can be different from place to place but we’re looking for something that consumers want and they’re not getting.
“In the UK what we see is a gap for an independent premium sports service because there isn’t one. “There’s one tethered to BT, there’s one tethered to Sky and both of them are very premium, meaning that FC Barcelona take on SD Huesca at Camp Nou in La Liga, for which Eleven snatched broadcasting rights from Sky they’re quite expensive. There’s a gap for an independent player making the service available to everybody at an affordable price.”
Not everyone agrees about the opportunity in the UK. Dazn, another London-based subscription sport streaming service, has committed more than £2.6bn to sports rights but has judged its home market too competitive and expensive to enter. Eleven’s spending around the world has been more modest, in the hundreds of millions rather than billions.
Its progress is being monitored with amused fascination by BT and Sky. Senior executives at both established broadcasters are highly sceptical that it can build a big enough subscriber base at £5.99 per month to justify its investments in what are niche sports. When BT owned Serie A rights even the biggest matches attracted audiences below 10,000. Nobody has ever tried to sell sport subscriptions direct to consumers without the main draw of live Premier League football.
Watson thinks Eleven will confound the sceptics by bringing in young audiences. They are watching less live sport on traditional pay-tv, prompting nervousness among rights holders about participation and the long-term value of their assets.
“We think that young people today are just as interested in sport as previous generations,” says Watson. “Some people will tell you young people are not interested in sport, they’re just interested in watching short videos on Youtube and that’s it. You’ve lost that generation. We think that’s nonsense.”
“It’s just that it’s very, very expensive to access. And frankly, as the music industry showed, if young people can’t access something at a price they think is reasonable they will just pirate it from an illegal streaming site, which are very easy to access. It’s a real problem for the sports industry.”
His pitch was similar at the launch of BT Sport in 2013. BT began by bundling its channels for free with a broadband subscription, saying it was bringing live football back to fans who had been priced out by Sky. The heavy cost of sports rights has since forced BT to charge, however.
“We were going to democratise sport,” recalls Watson. “To some extent we succeeded but I don’t think it really happened and it’s certainly not happening now. By the time you add up all the bills you need to pay it is really expensive.”
To some extent Eleven has benefited from just how expensive sports rights became as a result of the head-to-head battle between BT and Sky. Their direct conflict has now been resolved by a deal allowing each to supply the other’s sports channels to customers, which led to a £500m pay cut for the Premier League in the latest rights auction. However, pressure on the finances of both sides has made them more conservative in bidding for rights to less popular sports, and more willing to test how much their subscribers value them.
Eleven currently has no wholesale deals in place. Even the mighty Netflix, with its vast library and exclusive programming, has judged that distribution via traditional pay-tv operators BT, Virgin Media and Sky is required to cash in on its investments. Eleven’s only way to recoup its investment is by selling streaming subscriptions direct to consumers, and its rivals at BT and Sky are, for now, happy to keep it that way.
“We can just make them sweat,” says one pay-tv operator. “If we’re not losing many customers because we don’t have that content then they will need to come to us with a good price. If they don’t we can just pick up rights when they go bust.”
Watson disagrees. “We don’t need to do those deals but we would like to because we think it makes sense for customers and at the end of the day it is the customer that is the boss.”
A boost may be imminent. It is understood Virgin Media is close to agreeing terms to offer Eleven as part of its pay-tv packages.
Ioris Francini, the co-president of minority shareholder Endeavor, says direct-to-consumer sales have progressed “better than expected” and that Endeavor intends to increase its stake. Ownership of subscription streaming services is one way in which Endeavor aims to use its strength as a talent agent, representing top sports stars, to take a bigger share of income. He believes that UFC’S lucrative pay-per-view fights could be the key to distribution deals with BT and Sky.
“We are not without leverage,” says Watson. “We are not some little guy fighting to succeed.”
‘In the UK what we see is a gap for an independent premium sports service because there isn’t one’