Highlight Reel: Is Sport Really to Blame for Sky's Losses? 📺

Plus, report suggests the Gaming industry is bigger than film and music industries combined, and a marketing lesson from Como 1907...

Oct 25, 2024

Welcome to Sports Pundit’s Highlight Reel – your go-to roundup of the latest sports business news, insights, and trends shaping the industry.

Each week, we bring you the key stories and developments that have captured the attention of sports executives and leaders across our global network.

In today’s email;

Sky’s Losses Double to £224m 📺
Gaming Bigger than Music and Film Industries Combined 🤯
A Marketing Lesson from Como 1907 🚤

Happy Friday!

Andy 😊 🙏

P.S. Congrats to Morgan Giordano, our latest ‘Contributor of the Week.’

Other honourable mentions go to Richard, Shaun, Cherry, Chad, and Izzy.

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IRON SKY

Is Sport Really to Blame for Sky's Losses? 📺

Sky has announced an operating loss of £224 million ($290.3 million) for the 2023 calendar year, more than double its £111 million loss in 2022.

This increase in losses occurred despite a slight revenue boost to £10.45 billion, driven largely by direct-to-consumer price hikes that raised revenue to £8.5 billion.

Sky attributes the losses to "cord-cutting" as more consumers move from traditional cable packages to OTT streaming services amid rising living costs. Increased production costs—mainly due to expanded Premier League coverage to accommodate the mid-season 2022 FIFA World Cup—also impacted finances.

The UK’s growing streaming market, with sports platforms like DAZN and upcoming Warner Bros. Discovery’s Max, has arguably further diluted Sky’s market share.

Yet Michael Broughton, Co-Founder of Sports Investment Partners, suggests that it may be misplaced to blame the broadcaster’s challenges solely on sports:

What he says:

“I see plenty pointing their fingers at Sky's losses to sports. I have a different view on this.
Spend in sports is up(but that was more due to timing of World Cup than underlying cost increases - which as we know is likely going down in real terms due to nature of next EPL deal.
Losses are up from what we can tell by increased churn... yet one of the main tools to slow the rate of churn is? Sports content.
Sports have sometimes even been loss leaders in order to ensure the rest of the business survives - think BT coming in back when their main problem was churn of a different type, with all those people disconnecting landlines and a need to keep those customers as content/broadband subscribers.
I noted some analysts fear Sky has a problem in 2026 when WBD launch Max in the UK, but the loss of the NBA (yes a prime sports content item) may well hasten the demise of WBD and make their archive available for consolidation.
Sports has to adapt the model, Sky has to adopt the model. That I don't think is really up for debate, but I certainly wouldn't be blaming sports for increased losses.”

The Offseason, a reality-style series following 11 NWSL players training together in Miami, premiered on Friday exclusively on X, drawing over 2.5 million viewers within the first 24 hours 🏝️
TKO Group has reached an agreement with Endeavor Group to acquire PBR, On Location and IMG’s sports marketing business in an all-stock transaction valued at $3.25 billion 🤝
For 2025, Netflix is forecasting revenue of $43 billion-$44 billion, which would represent growth of 11%-13% 📈
The Al Hilal chief executive has said that Saudi clubs would relish an invitation to the UEFA Champions League ⚽️
The Premier League has officially opened an international office in Beijing to support the continued growth of the League and its clubs in China 🇨🇳
Adidas has upgraded its profit forecast for the year to $1.3 billion, citing better than expected performance in the third quarter and good brand momentum as it benefits from demand for its Samba and Gazelle shoes 👟

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MORE THAN A GAME

Does Gaming Hold a Key for Sport? 🎮

A new report from dentsu reveals that the gaming industry’s value has soared to £141.7bn ($184bn), overtaking the combined worth of the music (£28.6bn) and film (£33.9bn) sectors.

The “State of Gaming” report, created with global research firm GWI, highlights gaming’s expanding reach across generations, with the average gamer age rising from 33 in 2015 to 37 in 2024.

Globally, 2.4 billion people now play games, with 51% supportive of entertainment franchises entering the gaming world. dentsu’s findings also emphasise gaming’s potential for advertisers: in-game ads have a 99% view-ability rate and a 21% brand recall rate, yet ad spend in gaming remains below 5% in the U.S.

For Jo Redfern, these findings underscore a massive opportunity for rights holders looking to engage new audiences and tap into this rapidly growing market.

What she said:

“The irony is that sports has largely ignored the significant digital shifts in younger generations’ media consumption, but even if they’re now beginning to consider YouTube, Gaming still seems to be a can easily kicked down the road.
BUT: 78% of gamers say it's where they connect with friends, where they find their tribe. It’s where they feel they belong, and ‘belonging’ is important to a team, club and rights holder.
But the biggest miss is women.
Female gamers aren't just participating - they're finding something many sports has struggled to provide, safe and inclusive spaces. Places where they can be themselves without judgment. In Roblox, Dress to Impress is spawning digital fashion designers and e.l.f. is encouraging female entrepreneurship in the beauty business.
So if you’re not in gaming you're telling 2.4 billion people you don't see them, and many of them are fans or future fans.
The solution isn't complicated, but it does require courage:
Stop thinking about gaming as competition for attention, users love both gaming AND sports
Start thinking about gaming as a bridge to connection
Build communities, not just content
Create immersive spaces where all fans can belong
Because while we debate the future of sports IRL, fans are already forming communities and fandoms in gaming spaces.”

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