MLS, NBA Senior Executives Discuss New Media Landscape With YouTube

NEW YORK — Over the last year, YouTube has made sports a focal point, not only in terms of leveraging sponsorship opportunities, but also in the sport-specific channels presented via YouTube TV and also those offerings available through the core YouTube app.

Earlier this year in February, CEO Susan Wojcicki was outspoken about her stance on live streaming Thursday Night Football games, with the video platform ultimately striking out for the third consecutive year.

At last week’s Hashtag Sports conference, executives from YouTube in addition to the NBA and MLS weighed in on the new media landscape, which includes the technology company now holding local broadcast rights for three MLS clubs and partnering with the two aforementioned U.S. sports leagues around tentpole events, among other collaborations.

Below are some key takeaways from the discussion.

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YouTube’s Tim Katz (Sports Content Partnerships) on what YouTube sports is currently focused on…

Being the home of highlights for sports fans as well as all of the other shoulder programming that goes alongside it.

YouTube creator ecosystem. … We have massively popular YouTube creators who use the platform. People like Dude Perfect in sports and recently we’ve been evolving that to engage more deeply with athletes in the space.

Third is this evolution to live sports through our YouTube TV service…partnering with broadcasters and leagues to bring live content on YouTube in our $40 a month skinny bundle of content, which live sports, specifically, is at the core of both the user experience and the content that we have on the platform, which we’re seeing huge engagement numbers around.

NBA’s Daniel Rossomondo (SVP, Head of Global Media/Business Development) on the league’s early acceptance of user-generated content being populated on YouTube and not issuing takedown notices…

It was a much-debated topic. We tried very hard to see where the world was going and try to understand that this world of user-generated content and also the consumer being able to get what they wanted, when they wanted and where they wanted wasn’t going away. I think Whack-A-Mole is a pretty funny expression. We could have played the game all day and tried to do takedowns, but instead we embraced it. We were the first sports league in 2005 to launch a (YouTube) channel. We have almost five billion views at this point. … It gives us a little bit of information on how people want to consume content.

YouTube’s Katz on the company’s sponsorship deal with MLB…

All of the sports sponsorship deals we’ve done around YouTube TV have had a content element to them. They all have a different flavor. As you mentioned with baseball, we were the first presenting sponsor of the World Series last year. What was really unique about that deal was we also brought MLB Network onto YouTube TV, and so we have carriage of their content now, in addition to the sponsorship we did. What really brought YouTube into it also was we had YouTube creators also activating around it. Dude Perfect threw out the first pitch at one of the World Series games. We could really bring the whole YouTube community to life and activate around that sponsorship.

Katz on how the company’s 2017 World Series sponsorship deal with MLB impacted the NBA relationship…

The one thing that everyone was talking about during the World Series was the YouTube play logo being directly behind home plate. That really, really resonated. We saw great feedback on social. We saw great subscriber uplift. It was a great series, too, so that helped. We hit every single one of our key metrics in terms of subscriber acquisition, brand uplift, etcetera, just blew it out of the water. There was something to that model that we were working on. When Dan and the NBA guys approached us to say, ‘Hey, we’re thinking about something you guys could do around the NBA Finals’, it was super interesting. They had their own unique approach to it.

NBA’s Rossomondo on YouTube’s presenting sponsorship of the 2018 NBA Finals…

We’ve had a long partnership with YouTube. We’ve been in business with them for almost 12 years. It was very, very important to us that they were already partnered with our two biggest partners in the world in Turner Sports and ESPN. … It was really a three-way partnership because we worked hand-in-hand with ESPN. We worked hand-in-hand with the folks on our content team. And then with Tim and YouTube on the sponsorship side.

YouTube’s Katz on new subscribers to YouTube TV who come in via sports… 

It’s a little bit of everything. I think for the most part it’s largely cord-nervers. It’s people that have grown up watching YouTube. They’re used to our UI. They’re used to the way they get recommended content and videos. I think that’s the main value proposition for the broadcast partners that we work with is say, ‘Hey, these are folks who aren’t going to come into this ecosystem otherwise. They’ve grown up watching YouTube’. The other thing with YouTube TV is we’re pulling the best content from our YouTube game app as well. It’s not just limited to the broadcast networks or cable networks, but it’s also sort of the best content and best videos that you’re seeing on YouTube.

You have this really robust experience that those users who are subscribing are really used to getting. Like our other products, we like to think that the user experience is really strong, too. The combination of folks growing up with it, being accustomed to it, then all of the great content we can bring in, is a really strong value proposition.

MLS’s Seth Bacon (SVP, Media) on three local team deals with YouTube for U.S. rights…

It’s a different value proposition entirely, but the structure is very similar as far as packaging it, sponsorship assets and media, and content, making sure you’re pulling people in to YouTube but also taking from core YouTube and making it one content offering. For our clubs, the league is 23 years old, we’re growing very quickly, so that has disadvantages but also has real advantages, which are we’re not tied into long-term RSN agreements or other long-term local broadcast rights agreements like some of the other leagues are. When we go out with our clubs, we do it together with the league office and the clubs. We look at the local landscape and say, ‘Where can we put our games?’ It helps to have new voices in the conversation. People that sit in the chairs that Dan and I do think about it all the time, which is, who will be at the table the next time these rights are up? We’re fortunate enough to be having these conversations now. People at YouTube are seeing it.

The next guest for our weekly professional conference call is Bryan Srabian, Vice President of Brand Development/Digital Media, San Francisco Giants. It’ll be Wednesday, July 11 from 1:00-2:00 p.m. ET.

Like Tim said, the value of live sports. When you’re thinking about how you want to package these rights, with a local partner you’re going to make that shift, which is a pretty dramatic shift for some people to move off of television and move to digital or an OTT platform. You want to look at who your audience is and for us, we’re the youngest audience in sports and who the partner is and what their ability is to create relevance for that team in the marketplace if you’re going to come off of TV and get away from local news coverage and website. When you look at the things that YouTube brings to the table with marketing assets and marketing promotion but also the targeted nature of the way that they market to people, whether it’s on Google or YouTube, or with YouTube TV, you can become powerful really, really quickly. It’s presented a ton of opportunity.

Bacon on advising the teams on the YouTube deals…

We’re structured a little bit differently. We’re a single entity. When a club is part of Major League Soccer, they’re a member as opposed to just a straight affiliated franchise like some of the other leagues. There’s a lot more collaboration between the league and the clubs. We have a pretty clear path that we set out with all of our clubs that if they want to explore some of these digital platforms that are broadly distributed — and still have to be confined to market — that we want to make sure we’re part of the conversation so that people like Tim, who like to take advantage of the under-served people like Major League Soccer and steal our money, that there’s not stealing from one and giving to the other. We want to make sure we’re having one conversation about what the value of our rights are across the league.

Bacon on the finances of the three clubs’ deals with YouTube compared to what it would like on a local RSN…

The economics are part of the conversation. We’re not going to talk dollars here. For sure, we had to make sure that from a revenue standpoint, that’s absolutely part of the conversation. Tim can attest to this based on the conversations, it was equally — if not more — important for us to make sure the promotional piece was there, the content creation piece was there. You look at LAFC, that’s a brand that’s never existed before, so coming out of the gates, it’s not like they’re moving from a long-established club that’s moving from a RSN to an OTT platform. They’ve never been on TV or a media property. To come out of the gates with YouTube, we know and we’re confident enough in our audience that that will work. It was really important to us that YouTube got behind it from a promotional and marketing aspect as well. They’ve over-delivered on what they’ve done.

Bacon on if there was pushback on subscribers of local RSNs in Orlando and Seattle not being able to see matches now with the YouTube deals…

The biggest reaction comes from your linear television partner. … The people who were probably the most uncomfortable in the conversation (digital companies and linear) were those linear providers. For us, they’re trade partners, but that’s OK. If there’s a little bit of discomfort in those local markets, ultimately in the media landscape for there to be discomfort with people wondering who’s going to be at the table bidding on those rights, we think that’s healthy.

Bacon on if there’s a possibility for a national level deal between MLS and YouTube going forward…

We have unbelievable partners today with Univision, Fox and ESPN. We’re committed to those deals, but certainly as we look at ways to distribute locally, internationally or the highlights and other premium programming on core YouTube or through YouTube TV, we want to build this relationship as much as we can. We haven’t been at it as long as the NBA folks, but the growth we’ve seen as we’ve gotten smarter about the way we program content on the platform at the league level, our views, our subscribers just grow at three digit numbers. I think our views are up 170 percent year-over-year or something like that. We see great value in the YouTube platform, and we think that they’re uniquely positioned as a video platform, organically, to be a partner long-term.

YouTube’s Katz on what people can expect from YouTube as sports rights packages come up for bid in the coming years…

For us, it’s thinking through a few things. One is we have a few different services now. We have our main app, YouTube ad-supported service. We have what was YouTube Red, and we just announced a couple weeks ago that we changed that name to YouTube Premium, which in a lot of ways is our music offering and where you get the rest of YouTube ads-free. Then the third is our YouTube TV service, which is the $40 a month live television service. For us, we think through every opportunity that comes across our plate or things that are available for looking at, we think we have a really strong funnel for viewership from our core offering on YouTube and just trying to figure out, do the economics make sense for any of these deals or specific deals and which platforms should have them on.

We look at everything that comes through. We have a deal with BT Sport where we lived streamed on our core app. This was for U.K. rights to the Champions League Final, the Europa League Final. We saw the Champions League Final was the most concurrent viewers that we’ve ever had in our main app, YouTube service, for a sporting event. We’ve been able to start to aggregate audience in really efficient ways on our main app. And we have great partnerships as well, with exclusive rights or co-exclusive rights or digital rights on YouTube TV as well as these tentpole sponsorships and carriage on a non-exclusive basis. … The lifeblood of all of (these deals) is the main app YouTube experience and the audience that we have there.

About Mark J. Burns

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