How Online Streaming Is Affecting Sports Real Estate
Sport faces some massive challenges at the moment, particularly with regards to ensuring that supporters remain fully engaged with their favourite team.
With stadiums currently closed, sports organisations and broadcasters have been forced to come up with innovative ways to keep fans onside.
For instance, with soccer games being played behind closed doors, millions of fans have turned to live streaming services to follow the action.
This has not only transformed the way that people interact with their chosen sport, but could also impact sports real estate in the future. Read on as we assess the latest state-of-play.
Boom Time for Streaming Services
Major providers of streaming services have seen substantial increases in video and audio consumption amongst consumers over the past few months.
Traditional broadcasters have previously held almost all of the premier sporting rights in the United Kingdom, but this is quickly beginning to change.
According to a recent study by Grabyo.com, around 60 percent of UK sports fans have shown a willingness to switch to live streaming services.
It is a similar story in the United States, with more than two-thirds of sports fans inclined towards watching the action exclusively on streaming platforms.
The Matchday Revenue Conundrum
Government restrictions on the return of fans to stadiums means that it could be spring 2021 at the earliest before things start to change.
The loss of matchday revenue through ticket sales, hospitality and merchandise is significant, particularly for organisations lower down the sporting ladder.
For instance, only 13 percent of Premier League clubs’ annual revenue is generated on matchdays, some of which can be replaced by other income streams.
However, clubs competing in League 1 and League 2 are estimated to earn approximately 70% of their annual income from matchday sales.
The Threat of Shifting Consumer Habits
The uncertainty over the prospect of fans returning to stadiums presents a real threat to sports real estate, particularly with regards to shifting consumer habits.
While top level organisations such as the Premier League seek to monetise alternative revenue streams, those lower down the scale do not have the same luxury.
As fans become more accustomed to consuming sport via streaming services from the comfort of their own home, they may become more reluctant to return to stadiums in the future.
Many clubs may find that they are unable to afford to operate within this landscape, thus leaving their stadiums at risk of becoming a ‘white elephant’.
Sport & the Public Benefit Argument
Many experts argue that having a professional sports organisation located in a town or city has legitimate public benefits, both socially and economically.
Sports teams have used social media marketing to reach audiences worldwide and have the power to bring communities together, providing a feel-good factor that is difficult to quantify from a financial perspective.
It is also argued that sport has a positive economic impact, creating jobs for local people and helping to support other businesses in the region through the additional footfall it generates.
These elements are undoubtedly under threat in an environment where online streaming services could make visiting a stadium become a redundant practice.
Sports Real Estate at Risk
Major competitions like the Premier League are able to operate effectively in empty stadiums, thus meaning that their facilities are not under threat.
However, for those organisations that are heavily reliant on matchday income to survive, there is a genuine danger that they will end up on the scrapheap.
As fans become increasingly accustomed to watching sport via online streaming services, many clubs further down the scale may be unable to survive.
This creates the possibility that their real estate ends up being lost to the sports industry after being sold to land developers.