By Ben Klayman - Analysis
CHICAGO (Reuters) - U.S. sports leagues, corporate sponsors and media companies can score big points by using social media and are racing to create accounts on Facebook, MySpace and Twitter for fans.
Those social networks help businesses in the sports world build stronger ties with consumers, and the connections made by leagues can help them in ways that can pay off.
“There is a lot of meat on the bone here,” said Rob King, vice president and editor in chief of ESPN Digital Media, which is owned by Walt Disney Co (DIS.N). “We see huge upside.”
That does not mean that the sports world can say “show me the money” yet.
“If you look at the direct revenue they are gaining from any one of these social platforms, it’s growing, but relative to their other revenue streams it’s still small,” said Jim Bankoff, CEO of online sports network SB Nation.
However, sports businesses ignore social media at their peril, Bankoff said, and the numbers appear to back him up.
Americans spent 16.5 percent of their online time in October on social networking sites, up from 5.7 percent in the same month last year, according to Nielsen. Most of the money earned on such sites is through ads and small purchases, and the leagues see most of their revenue from sponsor deals.
The North American sports leagues have noticed that growth. The National Basketball Association has about 1.7 million fans on Facebook. But even smaller sports like curling and wallyball, an indoor volleyball game, have fans.
The numbers are equally large on Twitter.
The NBA and the National Football League have more than 1.6 million and almost 1.35 million followers, respectively. Meanwhile, NBA star Shaquille O‘Neal (2.55 million) and cyclist Lance Armstrong (2.22 million) rank among the top 20 people followed, comparing favorably with President Barack Obama (2.69 million) and talk show host Oprah Winfrey (2.63 million).
“We decided as a league rather than putting all our efforts to wrestle (fans) away from these social media platforms and get them over to NBA.com, we want to give them an experience on both,” said Dan Opallo, the NBA’s marketing director.
The National Hockey League offers contests on Twitter such as picking winners when all 30 teams play on the same day.
“The more time and emotion and energy we get our fans to spend with us, it’s a natural and pretty short leap to think that we’ll gain share of wallet also,” said Michael Dilorenzo, NHL director of social media marketing and strategy.
Major League Baseball links its website to social media sites, including incorporating Twitter commentary into live game coverage. On Facebook, the New York Yankees were the first club to pass 1 million fans.
Many leagues offer contests and games sponsored by companies like Ford Motor Co (F.N), J.C. Penney Co Inc (JCP.N) and Hewlett-Packard Co (HPQ.N) to augment deals already worth hundreds of millions of dollars.
“These guys are making a ton of money off of this stuff and the social media piece of it is really what ... drives a lot of the value from the sponsorships,” said Dave Panos, CEO of Pluck, an Internet software company that has helped several leagues and teams build online platforms.
Some of the value comes less from money and more from the easy exposure to the public that social media provides.
Corporate sponsors are wading into social media to follow consumers. In June, HP and the NBA provided a behind-the-scenes look at the NBA’s player draft and offered fans on Facebook, Twitter and News Corp (NWSA.O)-owned MySpace a one day-only offer of 50 free photos on Snapfish.
“The opportunity is really to create that relationship that eventually translates into sales, but there’s no question we’re seeing some very direct translatable numbers,” said Bill Gentner, divisional vice president in charge of men’s marketing for J.C. Penney, an SB Nation sponsor.
Sponsors like what they see, but are treading carefully.
“There’s a lot of users there, but they’re not always there to hear from an advertiser, so you need to be careful on how you approach them,” said Alex Hultgren, digital media manager for Ford-Lincoln-Mercury. Ford is a Citizen Sports sponsor.
Citizen Sports offers some of the biggest and fastest-growing fantasy sports games on Facebook, allowing people to play fantasy football or soccer with their friends without going to a separate sports site.
“If we tried to launch CitizenSports.com without leveraging the Facebook platform or the distribution of the iPhone or Android, we would not be successful at all because sports fans are pretty happy right now with NFL.com and ESPN.com and Yahoo Sports,” Citizen Sports CEO Mike Kerns said.
Kerns said the average age of his company’s users is about 10 years younger than the leading fantasy sports websites.
Reporting by Ben Klayman, editing by Matthew Lewis