How tech is supercharging a sports/media partnership

The partnership of sports and media has been crucial to the success of both industries since the dawn of the radio era 100 years ago. With the advent of more powerful and widespread technology, sports and media have been integrated in ways difficult to imagine even 20 years ago.

While media coverage has long been appreciated as the foundation of the success of the sports industry, the sports industry is also the rock on which the media industry rests. In 2023, 93 of the top-viewed 100 television broadcasts were NFL games. But beyond broadcasts, sporting arenas now are using the latest tech tools of media to enhance their own in-game experience. Meanwhile, Amazon, Apple TV+ and Netflix all now offer live sports and several large media companies are planning a new “Sports Hulu” network. The entrance into the WNBA of Indiana Fever point guard Caitlin Clark has generated such unprecedented levels of media interest and ticket sales in the league that she is drawing comparisons to Babe Ruth and Tiger Woods in terms of their cultural impact on their sport.

These topics and more were the subject of a broad-ranging panel discussion held in Grant Thornton’s Manhattan office titled, “The Growing Power of the Sports, Media & Tech Partnership.” Moderated by Howard Homonoff, Grant Thornton’s Senior Advisor for Media & Entertainment, the panel featured three executives at the forefront of the sports/media/tech future:

• Keia Clarke, Chief Executive Officer for the WNBA’s New York Liberty
• Zach Leonsis, President of Media & New Enterprises, Monumental Sports (owner of the NHL’s Washington Capitals and the NBA’s Washington Wizards)
• David Pietrycha, Chief Business Officer of NBCUniversal Media Group
• The following is an edited transcript of their discussion.

Deborah Newman: My name is Deborah Newman and I lead Grant Thornton’s Media & Entertainment Industry. It’s my pleasure to welcome you all. 

Andrea Schulz: I’m Andrea Schulz. Thank you. I’ll echo what Deborah said. I lead the Technology industry for Grant Thornton, and I’m coming in from the Bay area, so thank you for welcoming me into New York. Appreciate it.

Howard Homonoff: Welcome everyone. I thought I would throw just a few numbers out [about the state of the sports marketplace]. Some of the numbers of the growth around sports in the last few years are pretty astounding. 

In 2023, 93 of the top 100 highest-rated television shows were sports, many of them the National Football League, but not exclusively. In 2024, in the U.S., TV and streaming sports rights payments will total almost $30 billion, more than double what it was in 2015. That’s pretty extraordinary growth.

A dollar invested in the S&P 500 15 years ago would be worth roughly $4.17 today. If you had taken that dollar and invested it in an NBA franchise, that dollar would now be worth $11.79.

Sports betting revenues were $11 billion in 2023, up 44% in one year.

In the WNBA, the Indiana Fever, with their rookie Caitlin Clark, has through five games of their season exceeded their home attendance for all of 2023 in 20 games. Pretty impressive.

Keia, I want to start with you. The level of cultural and sports connectivity around women’s sports now is incredible. You’ve been with the Liberty for 14 years, so can you share a little bit about that journey to today? 

Keia Clarke: Good evening, everyone. So happy to be here with all of you, and I’m happy I’m first to talk about the thing that everybody wants to talk about.

This is everything we’ve ever wanted and hoped for. It doesn’t negate all of the blood, sweat, and tears the players that came before this moment provided to acknowledge we’re seeing right now with Caitlin Clark. Competition, at its core, is why people love sports and people wanted to see Caitlin Clark break records and sell out arenas, and really be happy and joyful about this moment, not just for women, but for people who love sports.

I think that’s the commonality, and for a long time, I think folks have this notion that women’s sports were just for women, but everybody can get behind a winner and nobody better than the New Yorker who loves a winner. So that’s why we’re trying so hard to win the championship for all of you who are New York natives.

But, you know, I would be remiss if I didn’t also point out, it’s a business. And I think, for the first time, many people are looking finally at the measurement, the growth, the KPIs, and it is good business to be involved in women’s sports, and that’s what I’m most proud of because that’s what we we’ve been driving at for a long time.

Howard Homonoff: What kind of a difference have you seen in the response from marketers? How has that changed?

Keia Clarke: I’ll go back in time really quickly. The Liberty had been playing in Westchester County for a couple seasons and then upon the announcement of us moving to Barclay Center, we sold $1 million in ticket sales in about 4 1/2 weeks. That was my first glimmer of investment: the right place, the right value proposition, was going to really turn the corner for us.

And then I’ll give another example. When Caitlin declared for the WNBA draft, we actually pulled all the tickets that were on sale offline, we repriced, we recalibrated, and that’s actually the reason the Liberty will actually lead in revenue this year, although we won’t lead in tickets sold, it’s dynamic pricing at its finest. It’s that sort of foresight of, we knew it was going to happen, but being poised for the moment was what was most important.

Howard Homonoff: Zach you guys have multiple franchises under your ownership roof. Talk about the world of the team owner today, and is this a never-ending growth cycle?

Zach Leonsis: Well, first I’ll talk about the WNBA. It’s an overnight success 10 years, 20 years in the making. And what I think we’re most proud of is that the league has prepared itself to capture a moment in time when the world was ready for it.

We won a championship in 2019 with Elena Delle Donne. We had just opened a brand-new building. It was a spectacular experience, but we were still only selling 5,000 tickets a game. On Friday night, we’re going to be hosting our game at Capital One Arena. It’s a total sellout, 20,000 people, it would be a million-and-a-half-dollar gate, the biggest gate in Washington Mystics history.

Where the Mystics were, you know, maybe valued at $10 million at one point, I think we will get to a point where we’re selling expansion teams in the WNBA for hundreds of millions of dollars.  Local sales and marketing revenue (is) certainly supporting those valuations, and media growth is going to be a significant portion of that, too.

If you look [overall] at sports franchises from the last 30 years, they have outperformed the S&P 500, S&P real estate and private equity, all three of those. These have become truly durable brands. During the pandemic, our industry was totally battered. Teams faced significant losses. But yet in Major League Baseball, for example, Steve Cohen bought the Mets for [a record] $2.45 billion.

So, does this tree go to heaven? These leagues are 75 or 100 years old, depending on the case. The Capitals will be celebrating their 50th anniversary next season. These are multi-generational assets, and you know we’re very lucky in that we don’t have customers, we have fans.

[Sports franchises are] increasingly looking like they have a SaaS business profile with highly predictable recurring revenue streams, season ticket member renewals that are de facto contractual, long-term deals with media and corporate partners, with naming rights, with big-time arena deals, and their own media networks. These are very sophisticated, increasingly profitable businesses.

And I think that based on their scale, we’ve been increasing the pools of capital that have access to sports. I think that helps to support those valuations moving in the future, and eventually I would project that over the course of a decade or two, you will see more teams venturing to becoming public companies, because that’s the universe that they’re going to start to punch into. It’s just going to be the best way to seek liquidity and growth capital.

Howard Homonoff: Dave, how are you looking at the landscape, as a guy who has to buy rights to this stuff?

David Pietrycha: I hope it’s just not a “stairway to heaven,” you know? Real quick on women’s sports for a second. We started a long-term Big 10 deal last year, and initially, when we targeted that, it was primarily for Big 10 college football on Saturday nights. We targeted a small basketball package that was going to be exclusively on Peacock, our streaming service.

Lo and behold, we get to this basketball season, and we end up with, I think, 10 Iowa women’s basketball games, including the record-setting Caitlin Clark game when she set the women’s total career points record. That was one of the best stories we had all year. You don’t know where value is going to come from when you make these deals.

Sports plays a really important role in driving our linear networks as well asour streaming strategy. There’s a scarcity that you get with sports.

It’s very difficult to pry big-time rights away from incumbents. You have to really be sophisticated in thinking about, “How many boxes can I check with this investment? What value can it drive beyond just the discrete revenue I can drive in the in these games?” But ultimately, you do have to have a threshold, you know, it’s not limitless in what you can justify.

Howard Homonoff: Dave, the Olympics so identified with NBC. There was a time, certainly in in my NBC years, when you didn’t put [the Olympics] anywhere but on the network Now, such a different world. How are you thinking about that property in particular?

David Pietrycha: Yeah, you’re exactly right. Our view on the Olympics has really changed over time and each games presents its own challenge. You think about Atlanta,  and how different that was compared to what our plans are for Paris. It was what we could fit into prime time on NBC, and there were hundreds of hours of events that no one got to see.

Now we’re not as worried about saving things for the prime-time show. In fact, we can’t do that with Paris. It’s going to be the middle of the night in France when we come on the air. But if you’re a fan of sports and you want to be able to watch anything, any event, you can go to Peacock and find anything you want to see very easily. Peacock is the perfect way to serve people what they want.

Howard Homonoff: I want to shift from streaming to the in-arena experience. What are you doing differently trying to get people into the arena and do for them when they get there?

Keia Clarke: I think for us we’re talking about this moment in time where we have a captive audience and a lot of it is coming en masse on viewership at really huge spikes. But my main job is very local. You know I have a micro-job. I’m marketing in New York City. I’m trying to get people to Barclay Center. There are 17,700 seats in that building and I want to get to the point where we sell out every single night. That’s my main focus.

You’re going to see phenomenal basketball, but from the minute you come into the building, from hospitality and guest services, the ticket takers, the guest services in the concessions, does our store have enough items? We’re finally at a point where, because we can monetize this as a true business, we’re able to actually give our fans exactly what they want.

And the last piece that I’ll actually add [is] all the way down to the nuts and bolts of the business. The traditions that occur in our game, the music that we’re playing — and if you haven’t heard of our mascot, Ellie the Elephant, Ellie’s been a major part of that just bringing people together and meeting them where they are. If you’ve watched on TV, we want you to have FOMO [“fear of missing out”] because you just can’t miss a game.

Audience Member: Do you know how young is your fan base and do you know how female your family base is?

Keia Clarke: We’ve actually skewed viewership wise 50-50 male to female. In arena, we had been 70-30 until the last two years. It’s actually … we have our fastest growing demo is actually white males between the age of 18 and 24.

It’s still the most diverse across the board. We used to pull 60% from just Manhattan and Brooklyn. Now we’re almost even across all five of the boroughs in terms of ticket buyers.

Howard Homonoff: Zach, you’re an arena owner and you’ve got a variety of products that you’re distributing there. What are you trying to do with the in-arena experience and bringing new technology and other things to the table?

Zach Leonsis: The sense of energy that you get from an in-person experiences is really irreplaceable.

In 2022, we had one of our best attended years ever. We had over 3 million people come through Capital One Arena, and every year we average anywhere between 2 1/2 (million) and three million. Our partnership with Live Nation, Ticketmaster, is incredibly strong and we’ve been seeing it activated with a variety of different communities, not just pop star acts and whatnot, but particularly in our area, the Latin community. A lot of great Latin artists are selling out our building, having to book multiple dates. It has really been a fabulous experience.

And so, our building is “24-7, 365.” I also think the game-day experience is expanding beyond just the two to two-and-a-half hours of what you see on the ice, on the court, on the stage. People care about the entire experience. We’re going to be pursuing a big renovation over the next three years. We’re adding 200,000 square feet in a building next door to expand our game-day experiences.

Howard Homonoff: Dave, shifting gears toward how you guys are using social media. How are you using it [in connection with] legacy broadcast and cable as well as with Peacock?

David Pietrycha: We’re using it to call to attention — it’s a marketing extension. A lot of our marketing is not vis-a-vis 30-second spots on linear networks, it’s via social and other web activation to let people know where they are, where the game’s going to be or that we have this new property that we invested in that’s coming and to know where to find it.

Howard Homonoff: Keia, want to talk a little bit about your immersion in social media?

Keia Clarke: I’ll start with not institutional social media and marketing [from franchises] but just the chatter and Twitter, and content created by fans, telling the stories for us, bringing notoriety and awareness to the WNBA. I’m seeing people talking about the WNBA in a way that they hadn’t before.

We have these nights now where we’re selling 16,000, 17,000 seats, and for half of the building it might be their first game. So how do we engage them and keep them coming back for more? We have to use social, whether they’re following us or hashtags, or they’re going to be served something.

And most of our marketing spend is actually with programmatic social media. No longer are we really spending really anywhere besides social media right now, using look-alike models and trying to retarget people in order to serve the people who are most prone to actually purchase not just tickets. We’re trying to drive viewership. We’re trying to drive followership. We’re trying to drive merchandise sales.

Howard Homonoff: Zach, how about the players and their presence on social media?

Zach Leonsis: It’s interesting that you mentioned the players. We have millions of followers, tens of millions of followers on our team accounts. That’s great. Sometimes it pales in comparison to what our players draw individually, too, particularly in the NBA side.

Whenever we can collaborate with the player, we try to find passion points, hobbies that players have and play off of that. That’s when really fun, organic, great viral stuff happens.

Howard Homonoff: Zach, in prep for this you mentioned, among other things, e-sports as one of those areas that you’re [invested in]. How do you think about e-sports?

Zach Leonsis: E-sports was hot for a bit. It’s really cooled off. I’m still very bullish on the long-term future of e-sports and I’m very proud of our team which, when we first found them, was doing a million and a half dollars’ worth of revenue. This year we’ll do closer to $70 million and be break-even.

So, it’s a real business, it’s not a tiny little video game club anymore. And it was a totally different audience than our traditional sports teams. These were people that had never and will never subscribe to cable or satellite. They would prefer digital distribution. It felt very complementary to what we wanted to do, and I think about our business as being in the community-building business. We want to cater, foster, develop communities. This was just a different one.

Howard Homonoff: If folks have questions, we’ll open it up.

Audience Member: Jan Roessner from One Earth Rising. I’m in the video game industry. Are there any collaborations that you’re planning with games in general?

Zach Leonsis: The NBA has a big partnership with Take 2 interactive and the NBA2K league. [In] our 500-person theater we host the entire NBA2K league events.

We’re investors in companies, including Niantic, which is Pokemon GO, and Epic Games, which publishes Fortnite. We’ve had some conversations previously with Niantic about hosting a Pokemon Go Fest at Capital One Arena. I’d love to host a League of Legends World Championship at “Cap One” in the future. I think there are definitely opportunities to pursue that in the future.

Audience Member: Josh Rucci from Progress Partners. College sports is undergoing such radical transformation right now between transfer portals, NIL (name, image, likeness), league realignment and so forth. How do you see this impacting all of your businesses over the next five years?

David Pietrycha: We didn’t know when we made the Big 10 deal that everything that would follow. But I think we felt at the time, and still feel today, that being attached to the Big 10 that we would be OK. There were two [conferences] that were that were going to be OK no matter what, which were the Big 10 and the SEC. And we have the long-standing relationship with Notre Dame.

From a media standpoint the biggest iconic teams and matchups seems to have been somewhat preserved. In terms of the biggest media events, I still feel pretty confident that they will exist. I think it just changes a lot what it means to be a college athlete and what that experience is. And I think it’s still being figured out.

Keia Clarke: Right now, it’s a direct positive impact. I think the vested interest in these personalities and these players begins at the college league and because of my longevity in the league, I can tell you it’s something we actually wanted years ago. The WNBA draft was actually hosted in the same city as the NCAA Women’s Final Four back in the day because we were trying to have that transcendent sort of connection like, “You loved me in college, now love me at my pro team,” and it never connected.

I think the difference is now NIL, whatever that’s worth, but also the fact that the transfer portal makes you pay attention to the biggest and best personalities because you want to see where they’re going to go and what decisions they’re going to make.

I would be lying, though, if I said I wasn’t nervous about how this thing could really just snowball in the next couple of years because decisions are being made by people who might be 18 to 20 years old.

Audience Member: Will Richmond from VideoNuze. Coming back to your original question, Howard, about the value of sports rights. A big part of the valuations of franchises, are very much tied to the multi-channel bundle, [where] a lot of non-sports fans have been paying the freight for sports channels that have cost ever more every year. Now we’re in the situation of cord cutting and we’re seeing internet economics come to the TV world and in turn come to the sports as well.

Can you guys talk about the new realities that are being imposed by internet economics on the sports world?

David Pietrycha: It’s a very complicated world at this moment in time. For years there was stability, and the pay TV multi-channel ecosystem and cable networks were the primary destination for most sports rights. If you set the clock back five years, we had the NBC Sports Network which we merged with USA Network in 2020 because we saw where things were going. We think, from an NBC perspective that sports makes sense as part of something bigger.

We like what sports does to a broad offering, how it enhances entertainment. From our perspective, our sports streaming strategy is to have a mix of things that are on linear and simulcast on Peacock, and also to have exclusive events on Peacock. And the biggest event, or the biggest week of usage and viewership that we saw in Peacock, was the week after we had the NFL Wild Card game.

We think that that makes sense in the streaming world, [but] we don’t think it’s over in linear. We’re investing in sports that still have a home on broadcast television. The cable model is going to continue to be more challenging, but we still have a lot of sports on USA Network and we’re looking at properties that can scale and drive value to all three.

Zach Leonsis: We think about our business as IP-based and sports continues to be the highest-rated form of entertainment. Think about the budget that might go into a 10-episode series. You debut those one at a time on linear or you binge-watch them on a Netflix. We can deliver hundreds of games, two to three hours a night. Drama every single time and the ball tips off at 7 p.m., it’s pretty predictable.

And so, part of the reason we bought our local sports network from Comcast and NBCU was because we wanted to control our own destiny. We too think linear has a future, cord-cutting is going to be plateauing at some point in the not-too-distant future because there are always going to be a generation of people who say, “This is what I’m used to. This what I’m comfortable with. That’s the easiest way for me to watch.”

So having great distribution on linear can continue to be very, very important. But we can’t put our heads in the sand. We have to be looking for partnerships with digital companies.

Finally, I think we’re very fortunate that we’re not over-reliant on our media revenue as it accounts for probably a third of our revenues across national and local. We want to have a diversified revenue base.

Keia Clarke: When I look at it from a local view, accessibility has always been an issue. “It’s hard to find WNBA games” is the constant complaint from the women’s sports fan, and we made the decision this year to actually leave the RSN space go over the air. It’s the first year, if you didn’t know New Yorkers, you can watch the Liberty local games on Fox 5 or Channel 9 for this season.

But likewise, because everything is changing so quickly, we also just last night launched our own D-to-C platform. So, Liberty live local games are also accessible directly from our app. So, it’s an ever-changing landscape. Because things are changing so swiftly, we can test a little bit on the WNBA side. We want to be everywhere at this point.