Cutting Out the Middleman: Everyone Gets Paid

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Photo courtesy of NBC Sports

A trend in the entertainment, media, and sports industries is one where as basketball star Kawhi Leonard stated “Board man gets paid.”  Meaning, there is a trend where, and although not exactly what Leonard referred to, comes down to getting rid of the middleman and going direct to consumer to lessen costs, have more control over content, and to monetary participation with individuals who normally did not get a piece of the proverbial pie.   

Following the NBA and MLB adopting and considering more direct to consumer streaming watch options, there are several examples of this trend in the space. 

European Tour Caddies reach sponsorship agreement

Beginning in 2020, The European Tour and European Tour Caddies Association (ETCA) will take a percentage of sponsorship monies that are secured by the Tour.  For an industry and specifically a profession that finds itself moving from golfer to golfer and without a secure financial future the change is welcome to at least guarantee some income.  It will be interesting to see if the American counterpart (Association of Professional Tour Caddies/APTC) follows suit.  Interestingly, the players associations for the NFL and the MLB have also set up a venture to allow its member athletes to profit from their name, image, and likeness in video gaming.  This is of course follows the NCAA and California rule changes and law with regard to college athletes. 

IOC Athletes to benefit from Olympic sponsorship deal with Airbnb

While not a direct sponsorship percentage deal like the caddies, this Airbnb deal allows and includes all Olympic athletes participating in the next five Games who offer up personal experiences with those paying to make money from those experiences.  Is this a sign of things to come when it comes to sponsorship participation for those who compete?  Without a union, Olympic athletes are at a disadvantage at the negotiating table, but convincing NBC (Olympic television rights licensee) and the International Olympic Committee (IOC) to give up a portion of its revenue will no doubt be difficult or at least currently possibly impossible considering the Olympic games generally lose money overall depending on location infrastructure spending.  NBC is also looking at utilizing its new direct to consumer streaming platform Peacock to host some Olympic content in Tokyo combined with the traditional linear television model.  

Streamers adding Subscribers, but Digital TV Devices control the Consumer Highway

Where streamer content providers like Netflix, Hulu, Disney+, Apple+, HBO Max, and Peacock enter and/or dominate in the space, the companies that help deliver those services (high speed internet service providers/ISP’s: AT&T, Spectrum, Cox, Charter, etc.) and (platform/digital television devices: Amazon Prime, Roku, Google Chromecast, etc.) give streamers access to potential customers (e.g., subscribers).  The companies who control multiple aspects of digital distribution will conceivably dominate (Amazon, AT&T/Time Warner through HBO Max) and/or those who broker deals with mobile carriers.  This trend is direct to consumer, but there is a possibility that such relationships could strain as companies jockey for more control and money.

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