Interview: ESPN Digital VP On Online Sports Rights

ESPN (NYSE: DIS) may have entered the UK market by buying up defunct Setanta’s English and Scottish football TV rights – but it’s treating online sportscastin with caution, uncertain that there’s yet a profitable business to be made.

“If the rights are available for broadband and we can make a business case, then yes. But we’re not going to spend absurd sums of money if we don’t think there’s a business model attached to it,” Tom Gleeson, the U.S. network’s digital VP for the Europe, Middle East and Africa region, told paidContent:UK.

“Our business model at the moment is based around subscription – whether there are any rights available outside of broadcast on a subscription basis, we haven’t seen anything at the moment that would really work.”

Sky Sports currently broadcasts the matches for which it has rights on Sky Player as well as satellite TV, and as well as highlights. If not live, could ESPN do an online highlights-only deal? “Sports rights decline in value very rapidly after their no longer live – if you’re trying to build case for non-live, it’s quite difficult,” Gleeson says. So, for now, online video for ESPN remains for complementary interviews and news snippets on its week-old new portal, which also runs textual news, fixtures and scores.

Online second-fiddle to TV: Despite hubbub surrounding the first-ever PPV online stream of an England football match last year by rightsholder Kentaro and vendor Perform, TV clearly remains the driving force – perhaps even the thorn in the side – of any online broadcast ambitions.

“It didn’t happen because somebody thought ‘forget about TV, this will work really well online’,” says Gleeson. “It was forced on them (again by the collapse of rightsholder Setanta). That deal wasn’t the game-changer some may have claimed, but YouTube’s deal to show live IPL cricket globally certainly could be…

“It does look like things may change,” says Zimbabwean-born Gleeson, who was CEO of cricket site Cricinfo when it was acquired by ESPN in 2007. “If you have an internet TV, you could be watching IPL on your TV, that could be a completely seamless experience for the user – it doesn’t matter whether it’s coming over the internet. With Setanta (which, again, held UK IPL rights), viewers needed a subscription; now they will be able to watch it for free. From a consumer perspective, that’s better – though the PC experience won’t necessarily be better.”

Buying and integrating indie sites: On its European odyssey, ESPN has added, and motorsports site to the it acquired in 1999 – rebranding each with an “ESPN” prefix and design changes. But: “There isn’t an ‘ESPNisation’ that happens,” Gleeson says. “We are attempting to grow ESPN as a global brand in the sports entertainment and news area. The branding is important there, and we have a content philosophy that remains consistent.”

So will ESPN acquire any more independent sites? Gleeson reels off the strategic considerations; example: “ will do really good coverage of Wimbledon, but they focus on U.S. players whereas ours would be around Andy Murray.” But there’s no answer on whether such gaps translate in to likely acquisitions – in some cases, or localised pages of constituent branded sites could be used to plug local coverage gaps.

“If you were to replicate in Australia and be locally relevant, you have to have Aussie rules, so we’d look at how are we going to get Aussie rules covered – do we build, buy, partner, how much depth do we need? But we don’t have a hitlist that says ‘the next three sports’. We’d need to establish whether we need to have a standalone tennis site – there’s an awful lot of interest in the majors but outside of that there’s not a huge mainstream interest. We would definitely look at those options. There isn’t a Cricinfo-type site in every sport.”

An ad-funded challenge: Until it commits to a subscription online video service (no signs of it replicating its U.S. site here with British sports), ESPN will remain more exposed to the advertising economy online. “It’s been a challenge,” Gleeson admits. “We’re definitely seeing positive signs but, as with any business that’s dependent on advertising dollars, it’s been pretty tough. When it’s tough, most of the time we continue focusing on building our audience.”