FRI Report 2023: New research reveals that big football clubs are missing out on £750m digital dividend
The CLV Group, the data and insights company for sport, media and entertainment, reveals that major European football teams can leverage the emergence of new content and digital propositions to identify, engage and convert global fans to the tune of £750m each year in their 2023 FRI Report (Fan Relationship Index).
The key findings:
Digital-first schemes which target global fan bases provide the opportunity for big European teams to increase revenues by £750mn per year.
A need for clubs to rethink traditional memberships and loyalty schemes and further evolve the model of big retailers and airlines to better reward fans. The emergence of new forms of digital membership programmes powered by fan tokens and other blockchain assets provides the catalyst for change.
New club-based content and technologies must be embraced to give global fans the opportunity for closer engagement irrespective of geographic location.
Clubs should consider using extra revenue to let matchday fans attend for free, safe in the knowledge that it’s supported by global fan revenue.
The analysis shows that fans across the world are looking for more access to and deeper engagement with the teams they support, but in four key areas which are ripe for better engagement ; streaming, virtual matchday experiences, web 3.0 and the US market. Clubs need to shift focus from the 5% of fans they know and accelerate step change to capture as much of the 95% unknown fanbase as quickly as possible, or face existing competitors or emerging adjacent verticals doing so instead. Today, all of the clubs are missing out on lucrative revenue streams.
By using a Fan Moneyball approach, clubs can analyse fans’ interests, passions, current levels of spend and appetites to engage, spend and or influence. The report identifies the key commercial opportunities available in digital memberships and fan tokens/streaming services/virtual matchday experiences and metaverse (see table below) to a dozen major clubs in the UK, Italy, Spain and Brazil, and US.
CLV’s analysis also looks at which fans and followers spend the most on a club-by-club basis. Supporters of Manchester City top the ranking, with Flamengo fans second, which mirrors their on-the-field success. However, the largest global revenue opportunities are led by Real Madrid, Manchester United and Barcelona totalling £300m+, reinforcing the longevity of their brand and on-field success over many decades. Along with those 3 mentioned above, PSG and Manchester City can expect to capture £30m+ each in the US market alone.
The report concludes that clubs need to rethink traditional loyalty schemes to make them less matchday specific and customise them for different fan types based upon what they want, who they are and where they are, and engage with them in a manner that matches their preferences. With the potential revenue on offer from new digital offerings to global fans, clubs could reduce or even eliminate the costs of tickets for match-going supporters, rewarding their loyalty for travelling to games.
Streaming: There is a large appetite among fans for club-specific streaming services (between 61% and 79% of fans) creating a potential annual revenue stream of £266mn across our five selected markets. Even in the market where demand is the lowest (the UK), three in five fans would still be interested. Fans of Real Madrid and Barcelona show the most appetite for club streaming services, and are willing to pay up to £12 per month.
Virtual matchday experiences: Between 57% and 81% of fans in CLV’s selected markets are interested in a virtual matchday experience, with the tech already on offer to make this happen. Fans are also willing to spend up to £12 a month to be part of this, creating an overall potential annual revenue stream of £246mn for our selected clubs across the five markets alone.
Web 3.0: Web 3.0 and the blockchain have the potential to be the backbone of future membership and loyalty schemes that operate in the same way as a retailer and airline schemes. Fan tokens have become the main manifestation of Web 3.0 in the football world, with 45-67% of fans saying they would be interested in token-based fan loyalty propositions. The demand for token-based propositions is strong with the data indicating that token-based loyalty schemes could be the connective tissue between fans, clubs and the wider ecosystem of brands. CLV expects it to shift from the awareness phase into the adoption phase, but with fan-focused engagement models. Overall, and across the five markets analysed, this vertical could be worth £244mn a year to selected clubs.
The US market - More than half of US sports fans also have a favourite soccer team, with up to 70% of NBA fans saying so. US soccer fans want to consume more soccer too. Almost two-thirds would be prepared to pay for a club-specific streaming service, creating a potential revenue stream of up £320mn across 12 major clubs.
Commenting on the report, CLV Group founder and CEO, Neil Joyce, said that clubs need to shift focus if they are to unlock and capitalise on their global followings.
“The opportunities we have uncovered are very real and within their grasp if the clubs follow the FRI model. It’s their chance to be at the forefront of embracing new technologies and innovations to deliver direct-to-fan propositions similar to direct-to-customer business strategies. When you look at how Nike made the step change to boost revenues with a D2C offering, it was harnessing a new business model with content at its core that delivered a shift to a 20% digital direct-to-consumer model and huge margin improvement also.
“The income generated from fan partnerships and dramatically increased engagement will easily dwarf the financial rewards of playing in a controversial breakaway European Super League that fans have no appetite for, and which would almost definitely compromise the integrity of our national leagues.
“Many major football clubs already have enormous global reach but most of those fans will never make it to a game. If they’re lucky, a few will get to see a pre-season tour game or a meet-and-greet at a shopping centre. These fans crave a deeper level of engagement with their club and while the technology exists to engage with them, most clubs are focusing on lower-funnel fans who are well-known to them. The emergence of club-based content propositions combined with the rapid explosion of streaming services in recent years gives further credence to the need for clubs to increasingly provide the option for global fan ecosystems which intersect fans, the club and partners/sponsors. Increased demand for access to content and digital propositions back this up.
“There’s a real opportunity to revolutionise loyalty and reward fans with what they want, raising revenue in the process, but clubs need to increase the pace on how they invest and mobilise these opportunities. Web 3.0, and in particular token-based memberships, have the potential to form the backbone of next-generation loyalty schemes akin to those of retailers and airlines where fans get the benefits they want, in an ecosystem they value, while clubs capture first-party data and drive new revenue streams.”
For more information, or to read the full report go to: www.clvgrp.com/fan-relationship-index/