Capital investment needs to be precise force, ET Sports chose to title the La Liga tournament, which is an important part of its sharpening of the edge in the field of soccer games.
Licensing with FIFA is costly and not very cost-effective, it's pretty much a no-brainer account.
The cost of the partnership between ET Sports and FIFA is a whopping $250 million a year, compared to the $150 million previously paid annually for the FIFA license.
La Liga's former title sponsor, Banco Santander, paid 20 million euros a year in sponsorship fees, and as a result La Liga's title revenues increased by 50%. The previous sponsor, Banco de Banco Exterior de España (BBVA), paid 26 million euros in sponsorship fees, and the emergence of ET Sports has allowed the La Liga league to escape from the dilemma of shrinking equity.
Santander logo integrated with La Liga logo during the title period
La Liga is regarded as the second most influential soccer league in the world after the English Premier League, and by saving the cost of its partnership with FIFA, ET Sports has used it to lock in exclusive gaming rights for La Liga, which has resulted in lucrative revenues for the La Liga federation.
However, FIFA doesn't seem to realize their mistake, and the overly greedy offer has resulted in them losing a steady stream of huge revenues.
It is worth noting that the cooperation between EE Sports and FIFA is a "licensing cooperation" and not a "sponsorship cooperation". As a result, although EE Sports has obtained the right to develop FIFA-licensed games, it has not obtained the rights and benefits of a sponsor.
It's in FIFA's e-competitions that the ET Sports logo has a chance of appearing
Title rights are usually the most advanced of the sponsorship entitlements. When an event is mentioned in official channels, the name of the title sponsor is inevitably mentioned. Materials such as event billboards, broadcast packages, and event logos will heavily display the sponsor's image.
La Liga has 380 matches a year, and the tournaments of teams like Real Madrid, Barcelona and Atletico Madrid are loved by fans around the world. FIFA, on the other hand, has almost no decent tournaments in non-World Cup years, and the Club World Cup and other tournaments are more like chicken ribs. The two contracts between Yidian Sports and La Liga and FIFA, the price difference and the rights and interests of the content, the exposure effect is inversely proportional to the full extent of the cost-effectiveness of the FIFA license is not enough.
Copyright cooperation in exchange for advertising effects
The FIFA franchise has always been a moneymaker for ET Sports. Every year the release of the new game can reach ten million copies sold, and the built-in kryptonite card mode "ultimate team" (UT) is to drive the amazing secondary income. The UT mode will bring in $1.62 billion a year, according to EEG's fiscal year 2021 earnings report.
In its June 2022 earnings release, ETS did not disclose UT model revenues separately, but the earnings release indicated that ETS's "Online Services and Other" revenue category was $5.63 billion in 2021 and increased to $6.99 billion in 2022, with the UT model making a significant contribution. It is assumed that the UT model has increased in revenue and has generated more than $1 billion for five consecutive years for ET Sports.
La Liga linked to FIFA UT mode announces season's best lineups
However, this revenue is not easy to come by. Sports Business has repeatedly introduced the complexity of copyright in soccer games. Different leagues, cups, clubs, national teams and even players have different sources of licenses. the FIFA series owns the copyrights of the five major leagues, the UEFA club competitions, the South American Football Association club competitions, the top leagues of many countries and the secondary leagues of some countries, basically covering the mainstream professional competitions, which is built on the basis of reaching cooperation with a large number of copyright holders.
And the licensing fees will continue to rise, and the pressure on the FIFA series to maintain the quality of licenses is increasing day by day. Especially like the Serie A, the league license and club license are independent of each other, resulting in the FIFA series once lost the license of Juventus, Roma, Atalanta and other Serie A teams - these clubs were signed by the Japanese game company, Konami, and became the exclusive clubs of the Live Soccer series.
Theoretically, since the UT model is based on collecting player cards to form virtual teams, the basic guarantee of smooth operation is to own the player rights. In contrast, the importance of club rights and tournament rights is not so high. However, in reality, the cooperation with clubs and tournaments brings a lot of traffic to the UT mode. Clubs will take the initiative to publicize that their players have been selected for various best lineups in the game, and tournaments will announce some important awards in conjunction with the game - for example, the best player of the month in the English Premier League is titled by ET Sports.
Crowe receives Premier League Player of the Month award
Therefore, retaining the licenses for these important tournaments is to retain the game's exposure, advertising effect, and thus the game's ability to draw money. If Real Madrid's official social media were to say to fans, "Benzema's special Ballon d'Or card has been released, have you drawn it yet?" , how much extra incitement could that bring to ET Sports?
The lucrative revenues of EEG are not easy to come by, but rather come from huge investments in copyrights, "money for money".
It's also difficult for ET to afford the high cost of licensing
Let's do the math: how much of the budget has been taken up by the licensing partnership between ET Sports and FIFA in the past?
The last time the two sides agreed on a new contract was ten years ago. The annual cost of the four letters of the word "FIFA" for ESPN ten years ago, and the five-year extension of ESPN's La Liga naming rights ten years later, shows how expensive it is.
During this decade, the gaming market has changed dramatically: the development cost of "3A masterpieces" has become higher and higher, and the UT model of ET Sports has become more and more complex, becoming a service game that requires additional staff to operate year-round. Labor Expenditures.
Even during the summer hiatus and the start of new work promotion, UT Mode still has to do quite a few themed events to gather popularity
Perhaps some of the important rights lost by ET Sports in the last decade reflect the "neck-snapping" effect of FIFA's licensing costs.
ET Sports most recently owned the rights to the UEFA Cup in 2012, after which the UEFA Cup rights were owned by Konami. The negotiations for the ten-year FIFA license happened to be negotiated in 2013. Is it possible that the new FIFA contract is taking away from the budget for working with UEFA national team events?
In 2019, Konami signed an exclusive partnership deal with Juventus, meaning that for the first time in more than two decades, FIFA failed to own the rights to the top five league teams in their entirety. Juventus, originally a partner club of ET Sports, switched to the Live Soccer camp, apparently at an attractive price offered by Konami. Without the cost of licensing from FIFA, could ET Sports make a matching offer and not have to worry about the resulting change in the cost structure of the club's partnership system?
The loss of Juventus was just the beginning, with Roma, Lazio, Atalanta, Napoli and more becoming Live Soccer exclusives one after the other. Starting from the 2022/23 season, Juventus' contract with Konami ended and reemerged as an ET Sports partner, returning in FIFA 23. But FIFA 23's Serie A team lineup is still incomplete.
Juve rights return in FIFA 23
In addition, in 2020, Konami has entered into a partnership with Serie B, and FIFA 21 has removed the classification of the Italian second division. Although ET Sports previously did not have the rights to Serie B, but will still be "B soccer" (Calcio B) virtual league name to integrate Serie B teams, try to maintain the relative integrity of the Italian league system. Now, Italy has become the only country among the five major European soccer powerhouses that has not reflected the second league in FIFA games, resulting in the reduction of FIFA series' ecological restoration of the league of mainstream European soccer powerhouses.
The abandonment of Serie B by ET Sports may not necessarily be due to costs being stuck, but rather a reluctance to pay a higher premium to compete with Konami. Still, Serie B's withdrawal from FIFA is a striking reflection of the pressure on ET Sports' rights in recent years.
"Unlocked" is a great way to get a new license.
ET Sports has parted ways with FIFA. With the end of the "necklace", there are more possibilities for ET Sports soccer game rights cooperation.
La Liga is naturally a groundbreaking first step. As "Generation Z" becomes a new target audience for traditional sports, the discussion of combining traditional sports with digital entertainment has become more and more heated. Digital entertainment such as soccer games, which are derived from traditional sports, are seen as the best way for traditional sports to capitalize on digital entertainment. The title partnership between ETTV Sports and La Liga further strengthens this view - a larger percentage of the new generation of La Liga fans will have grown up playing soccer games.
Meanwhile, the La Liga title also gives ET Sports top-level sponsor status in both of the top two leagues, helping it to consolidate its core market. The English Premier League does not have a title sponsor, but ET Sports has always been a "Lead Partner".
English B games in FIFA 22
ET Sports has a deep cultivation in the UK market, even the sub-league system is more complete than other countries, over the years to include the rights of the Championship, League One and League Two, FIFA 23 is even rumored to introduce the fifth level of the National League. The complete coverage of the English professional soccer license makes the FIFA series sell well in the U.K. FIFA 22 sold 3.36 million copies as soon as the game was launched in September 2021, and by the end of 2021 it still manages to climb to the top of the U.K.'s weekly sales chart for physical games from time to time.
Although not a top-level sponsor, ET Sports has a place on the Bundesliga's sponsorship list. The English Premier League, La Liga, and Bundesliga are often considered the top three leagues, and ET Sports has exclusive rights to all three. The partnership also comes with the rights to clubs in all three leagues, arguably giving ET Sports a good base to build on at the club rights level.
The Serie A issue cannot be addressed directly at this time. Although ET Sports is an official sponsor of Serie A, its license does not cover every specific club. Meanwhile, despite saving on licensing fees on the part of FIFA, when Konami makes every effort to compete for exclusive rights to certain specific Serie A clubs, ET Sports will still tend not to match the inflated offer, so the Serie A club rights for ET Sports soccer games will remain missing for the next few years.
Updates such as Inter Milan, which remains an ET Sports partner club for the 2021/22 season, and has an exclusive partnership with Konami for the new season. From the 2023/24 season, Inter Milan will only appear in Live Soccer.
Milanese duo simultaneously end partnership with EEG, join Konami camp
ET Sports may not be willing to sign specific Serie A powerhouses at a high premium, but it could strike out in a different direction. If Serie A can package club licenses like other leagues do, ET Sports can get Serie A club licenses by partnering with Serie A. ET Sports could try to put in the effort to PR the Serie A league so that the league would find a way to convince the clubs to agree to be represented by the Serie A league to sell some of the commercial rights to package all the clubs.
It would be an art of negotiation. Packaging commercial interests will certainly hurt the interests of the giants who can afford to sell exclusive interests. But the Serie A league could pull in small and medium-sized clubs, pointing out that since the Serie A league does not have the right to sell overall rights on behalf of the clubs, the Serie A league would not be able to secure more lucrative sponsorship contracts, and thus would not be able to offer clubs a larger share of the pie to improve their operations and competitiveness at the European level. With small and medium-sized clubs fighting for their rights, the giants may have to give in. This was the case with the La Liga broadcasting rights agency, where Real Sociedad and other giants originally sold their own broadcasting rights, but in the end, the La Liga league gained the authority to unify the sale of broadcasting rights.
And to help the Serie A League improve its pulling power, ET Sports could propose a big contract that would show the Serie A League and small and medium-sized clubs the benefits of packaging. This contract could even be a title contract similar to La Liga. Indeed, ET Sports has now realized the title of the Italian tournament, naming the Italian Super Cup from the 2022/23 season. And Serie A's current title contract with Telecom Italia expires in 2024.
What's the bottom line on the big contracts offered by ET Sports? Obviously, part of it lies in the cost savings from the FIFA license.
Save your money and develop the women's soccer model properly
There's also a new addition to the ET Sports soccer game that could also be closely related to saving on FIFA licensing fees - the women's club tournament model.
Starting with FIFA 23, women's soccer clubs will be featured for the first time in an ET Sports soccer game. Chelsea women's soccer star Cole will join Kylie Mbappe as the main spokesperson for the FIFA 23 cover. Previously in FIFA 16, the women's mode made its first appearance and was seen as a major moment in the promotion of women's soccer.
FIFA 23 introduces women's soccer clubs
FIFA 23 will include the Women's Premier League and Women's Ligue 1. The price difference between the rights for women's soccer and men's games is significant, but ET Sports still has to invest in new labor costs for women's soccer clubs. For example, the face production team has to visit each club to scan and extract the real faces of the players in the partner leagues. Another example is the manpower to produce standalone women's soccer patterns.
If in the future, ET Sports expands the scale of women's soccer cooperation at the club level, such as joining the Women's Champions League, the North American Women's League and other tournaments and clubs, the workload of the team will increase accordingly, which will require a sufficient manpower budget behind the scenes to support.
From the beginning of Yidian Sports announced the end of cooperation with FIFA, people familiar with the soccer game industry are of the opinion that it has almost no impact on the heat of Yidian Sports soccer games. And the title of La Liga, the launch of women's soccer mode and other actions, to a certain extent, reflecting the art of sports out of the plight of low cost-effective copyright, ushered in a broader marketing space.
"FIFA" is certainly the gold standard of ET Sports soccer game, but the new transformation is likely to start from the "sign change".
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