Content is key in sports-related business models. More than ever, this argument should be weighted highly by sport organizations, which ask for value in return for the content produced. Often, TV-income is the most important ‘driver’ meant to secure financial sustainability in an increasingly professionalized sports industry; this is a fact, which leaves sport organizations with a situation where they must meet broadcasting companies’ paramount request, i.e. ‘valuable content’. In collegiate athletics, primarily dominated by the popularity of ‘college football’, the commercial stages of development have shown that both sides of the table (read: broadcasting companies and collegiate athletics) have found some common ground in terms of acknowledging the ‘magnitude of producing high quality content with large degrees of fan appeal’. Basically, this is needed to monetize on the junction between ‘live events’ and ‘media services’ in sports. From this perspective, sports content must accommodate the demand for value set by media distributors, sponsors & advertisers, and fans (without compromising the fan experience for fans in the stadium) and thus deliver concrete revenue streams for the sport organizations and broadcasting companies staging these premium sport events.
College football has jumped in popularity for what reason broadcasting companies have injected billions of dollars into the game, see here. But what is the ROI for broadcasting companies? Of course, the investment is expected to generate a large audience, which translates into advertising revenue. The rise in popularity of college football and the multitude of media content across a multitude of platforms ranging from TV to the Internet have made it even more interesting for advertisers. Advertisers seek value from reaching out to very specific segments characterized by young and educated people, who are extremely passionate about the product (often in the sense that they are brought up to follow a specific team – one of my friends was born as a ‘die-hard USC fan’). With the playoff coming up in 2014 (click here), the business model will gain even more strength. Collegiate athletic departments have been influenced by circumstances where state funding for higher education has been decreasing so they were forced to look at different revenue sources. In that regard, it is essential that college football is still extremely popular among the broadcasting companies due to the fact that people crave ‘premium live sports’. In a leisure and media culture where there are many options for people and time and money are scarce resources, it proves a point that people want to watch live sports (or in ‘real time’ in stead of recorded versions where the outcome has been revealed). The affinity linked to sports (and college football) makes fans drop what they do to watch the game.
Though, the risky part of the business model exits when broadcasting companies are paying billions of dollars while risking that the market may be saturated at some point. From this angle, the parties in the equation must hope that the current model will be sustainable in the sense that fans continue to consume the product (and re-invented versions of the high quality product) and to be willing to pay for it (in cable subscription fees). Collegiate athletic departments are dependent on these revenue sources while broadcasting companies must hold on to their viewers and commercial stakeholders (advertisers in particular) to ‘let the show go on’. But so far, college football has shown to be ‘show business’ by letting fans enjoy the show while commercial stakeholders exploit the marketable assets of the game. HOPEFULLY, the game will continue to appeal to large national audiences.