Editor’s Note: Welcome to a daily column we run here at BroBible breaking down the day’s biggest stories in sports business with commentary from the sports money and sports fanatic perspectives. It comes to us via our friends at JohnWallStreet. You can sign up here for their daily email newsletter.
MLB Attendance Hits 15 Year Low but Fans Still Watching on TV
Major League Baseball attendance declined 4.1% in 2018 (from 30,042/game to 28,830/game), with fewer than 70 million people (69,625,244) visiting league parks for the first time since 2003; it was the MLB’s 5th attendance decline in the last 6 seasons. 17 clubs experienced a YoY regression, with the Marlins (-771,910 fans) and Blue Jays (-878,605 fans) reporting the largest drop-offs; it must be noted that those clubs altered the way they calculated gate receipts prior to the ’18 season. While MLB experienced a decline in fans at the ballpark, television viewership remains strong; Nielsen reported that between March 29th (earliest opening day ever) and September 30th (final day of regular season) the league’s 29 RSNs (Toronto not included) saw ratings rise +2% YoY. MLB games remain the most watched programming in primetime on cable television in 28 of 29 U.S. markets (Miami is the exception) and 12 RSNs carrying MLB teams are tops in their market in primetime, amongst all programmers.
Howie Long-Short: MLB blamed the attendance decline on the “historically bad weather” in April (102 games were played under 50 degrees), but they should have blamed it on the Marlins and Blue Jays accounting methods; 54% of the league’s total decline can be attributed to those 2 clubs.
Of the 12 RSNs that rank first in primetime within their market, 6 are owned by Fox Sports (Cardinals, Indians, Brewers, Yankees, Royals and Diamondbacks) and will be sold. It’s been reported that Sinclair Broadcast Group (SBGI), YouTube (GOOGL), Amazon (AMZN), Blackstone Group (BX), CVC Capital Partners and Apollo Global Management (APO) have all expressed interest in acquiring the block (22) of RSNs. Bloomberg has estimated that the assets could command upwards of $20 billion.
Advertisers value sports properties because a) they’re live (so you can’t fast-forward through commercials) and b) viewership consumption is greater for sporting events than it is for entertainment programming. In fact, the average MLB club has fans tuned in longer than the top 10 primetime television shows combined in their respective markets.
Fan Marino: The St. Louis Cardinals lead the league with an 8.05 rating on Fox Sports Midwest. On the other end of the spectrum, the Chicago White Sox were the only club to post a Nielsen rating under 1 (.68); a figure that indicates fewer than 1% of the total TV households in the Chicago market are tuning in to watch the South Siders on FSN Chicago. The Atlanta Braves experienced the league’s greatest YoY rise, with viewership climbing 79% in 2018 (to a 3.46 rating); a trip to the postseason following 3 straight years of 90+ losses explains the renewed enthusiasm.
Content Marketers Using Insight on Fan Excitement to Drive Decisions
Thuuz Sports is an AI-based metadata and content curation platform for sports content owners and distributors. Their proprietary technology generates automated highlight packages, offers intelligence to content marketers and is used to enhance broadcaster programming guides. JohnWallStreet sat down with Wayne Sieve, EVP of Thuuz Sports to discuss how simply understanding if a game was exciting, is exciting or will be exciting is valuable insight for companies like ESPN+, DirecTV, DAZN and Sling TV.
JWS: Explain how Thuuz measures fan excitement?
Wayne: We built a data science and methodology around measuring game excitement using a simple measurement scale, zero to 100 with 50 being average and 100 being off the charts exciting. As a process, we ingest enormous amounts of third party data – including play by play, social, betting, audio and video – and then we apply our own AI against the data collected. We do our own numerical modeling, predictive records and machine learning, and then perform the data analysis to measure everything from the pace of play, to the quality of the teams playing and the context of the match. We end up with what we call sports event metadata offering a snapshot of fan excitement, in real time, from the home team’s fan standpoint, the away team’s fan standpoint and the neutral fan’s point of view; think of it as something like Rotten Tomato ratings.
JWS: How does a broadcaster take Thuuz’s insight and turn it into something actionable?
Wayne: If a broadcaster knows if a game was exciting, is exciting or is expected to be exciting, they’re able to create a more personalized programming guide. In addition to the score for each fan POV, our technology machine produces 3 headlines for each of the different fan vantage points explaining why the game is rated as such. From there, the broadcaster can use push notifications to drive viewer tune-in.
Marketers can also use the metadata to determine which assets within a programming portfolio should be promoted, insight that leads to better sell-through and conversion rates.
JWS: Thuuz introduced a highlight machine for the 2018 World Cup enabling users to create their own SportsCenter; the teams, games, players and duration were all customizable. Is this the future of how sports fans will get their highlights?
Wayne: I think it’s a very compelling direction that a lot of content owners should think about going. We’re getting to a point where people are demanding (or certainly are more compelled by) having a personalized experience, especially the younger audience. The days of simply programming what you think audiences are going to like and saying, here it is and that’s all you get, are coming to an end. If you enable a viewer to create their own programming, to have them involved and engaged with the content creation process, then they’re more interested, they’re more engaged and they will interact for longer periods of time. Customizable highlights provide a phenomenal product experience for fans and I think that’s where the market is going and should be going.
JWS: From a consumer standpoint, Thuuz’s most valuable feature is the ability to “catch up to live.” Explain why it’s a “game changer” for programmers in their efforts to engage the fan?
Wayne: Let’s say you stumble across a football game and it’s 28-28 in the middle of the third quarter and are wondering how it got to this point. Our technology enables the viewer to curate and view personalized game highlights in real-time, so they can watch the balance of the game unfold live; a feature that had not previously existed. I think offering a game summary is quite important as a next step in the evolution of how to engage with the fan, because unless you started at the beginning of the game, you don’t know how you got there. I think you’re going to see widespread adoption as the technology becomes more refined.
Howie Long-Short: Thuuz, a privately held entity, has raised $10.7 million over 2 rounds of funding. You can play the company via Liberty Global (LBTYK), who led their $4.2 million Series A round in ’12 or through ITOCHU Technology Ventures; the VC arm of Itochu Corporation. Itochu is among the largest Japanese general trading companies (#215 on ’17 Fortune Global 500 list), with an expertise in textiles, metals/minerals, food, machinery, energy/chemicals and ICT/general products/real estate; the company trades over the counter under the symbol ITOCY.
Fan Marino: Thuuz’s World Cup highlight machine remains active on the Fox Sports website. Select your favorite teams, players, matches and play types (i.e. goals, saves) and enjoy your personal highlight film.
What is JohnWallStreet?
JohnWallStreet, located at the intersection of sports and finance, is a destination for the educated sports fan.
While we won’t be publishing “hot takes” on LeBron’s relative greatness to Jordan, we will be offering up the most relevant sports related business news, in easily digestible bites, with commentary from both the sports money and sports fanatic perspectives.
We’ll cover publicly traded professional teams & stadiums (MSG, RCI, BATRA, MANU), television networks (DIS, FOXA, CMCSA, CBS, TWX, MSGN), apparel & footwear companies (NKE, UAA, ADDYY, FL, LULU), equipment companies (GOLF, ELY, FIT), ticketing companies (EBAY, LYV) content and facilities providers (CHDN, DVD, ISCA,TRK, LMCA). If it trades on Wall Street, and has a sports angle, it’s in our wheel house.
Howie Long-Short and Fan Marino will be providing their expert opinions on each story. They have slightly different areas of expertise. Fan Marino is a firm believer that the SEC is the premier football conference. Howie Long-Short knows it as the Securities & Exchange Commission. Fan Marino lives and dies with the college selection of 5 star, blue chip recruits. Howie Long-Short spends his days analyzing blue chip stocks. Howie Long-Short knows that Black Monday occurred on October 19th, 1987. Fan Marino swears it happens every January after Week 17. You get the point.