Google’s colonization of sport

With Lamine Yamal, Tim Howard, former goalkeeper for the United States men’s national team, and Zlatan Ibrahimovic, now a FOX commentator, Google took advantage of the World Cup occasion to promote its new search mode with artificial intelligence.

The multichannel campaign highlights the integration with the American broadcaster, through which commentators use Google Search’s AI Mode to explain, in real time, moves and match statistics.

Google Search also sponsored the campaign The Language of Soccerdo The Athleticdedicated to translating the culture of fans from different countries.

The company also supports the United States Football Federation, while the Pixel brand maintains partnerships with the NWSL, in the USA, and the WSL, in England. At the end of May, CBF announced Google’s sponsorship through a contract involving the Gemini tool.

At first glance, it is a set of institutional and marketing actions. Taken together, however, they reveal how sport has become one of the surfaces through which Google expands its ecosystem.

As the 365247 Sports blog noted, Alphabet currently maintains six subsidiaries operating simultaneously in sports: Google Cloud, Waymo, Gemini, Pixel, YouTube TV and Google Search.

It is this reading that leads James Mortimer to assert that the boundary between “technological partner” and “media infrastructure” has been deliberately erased.

When a company inserts its products into broadcasts that it does not control, operated by competing platforms, but retains the data generated by them, it begins to occupy a “structural position in the sport value chain” far beyond mere sponsorship.

Therefore, the analyst describes this movement as an “acquisition of leverage without assuming costs”, and helps to explain how Google continually expands its influence over sport without having to compete, most of the time, with the billion-dollar inflation of broadcasting rights.

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There is, of course, rhetorical license in this statement. Google shelled out $2 billion for the rights to the NFL Sunday Ticket, a topic I’ll return to later. Still, your presence does not depend on live streaming.

Mortimer proposes looking at the complete cycle of a sporting event. Before the game, Google curates discovery through search, news and recommendations.

After the final whistle, attention refocuses by bringing together repercussions, videos, cuts and the fans’ own continuous production, feeding a cultural tail remixed by the fans.

The comparison made by the analyst measures this transformation. While traditional media built its business model by renting advertising space within the content it produced or licensed, Google started to invest in the infrastructure that organizes this relationship between fandom and sport.

It is an interpretation that directly dialogues with another recent reflection, published by Roger Mitchell. Three weeks ago, the analyst argued that understanding Google requires abandoning a reading based on isolated products to see it as an ecosystem.

The premise goes beyond sport and helps to understand movements that cross culture, advertising, technology and even the job market.

As Mitchell notes, Alphabet is in a permanent race to launch new products (driven above all by advances in artificial intelligence) and sports content begins to fulfill a very pragmatic function: when it generates attention, it produces data, which strengthens a revenue-generating ecosystem far beyond the game.

The business that does not depend on rights

The main asymmetry pointed out by Mortimer is precisely in the relationship between those who finance the sport and those who capture value around it.

While leagues and federations bear the costs of competition, broadcasters compete for increasingly expensive rights and streaming platforms invest billions to justify their subscriptions, Google relies on another model.

Its monetization window via YouTube never closes because it does not depend exclusively on live streaming, and works within an ecosystem cultivated over two decades to feed the life cycle of a sporting event mentioned in the first part of this article.

In other words, leagues bear the production risk, broadcasters foot the distribution bill, and Google captures data, attention, and margin at virtually every stage of this process.

It is this dynamic that leads Mortimer to speak of a kind of “economy created within the stadium”. The expression describes a dimension of sport that normally goes unnoticed: it is necessary to understand who organizes the economic activity that flourishes around rights holders.

Few examples illustrate this better than the rise of the content creator economy.

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And YouTube not only offered a place to store videos about sports, it also created an economic system capable of encouraging thousands of independent producers to invest time, money and creativity in producing daily content for fans.

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This is precisely where one of the most profound differences lies in relation to the traditional media model. Creators fully assume production costs, build their own audience and live daily with the risk of making mistakes.

As Mortimer notes, this is perhaps the biggest advantage Google has built over the last twenty years.

The exception: Sunday Ticket

Last week in relation to sports rights and the way the platform controls its entry into that market on its own terms.

If Google’s strategy seems carefully designed to avoid broadcast rights inflation, why has the company agreed to pay around $2 billion a year for NFL Sunday Ticket?

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For Mortimer, rights were, in fact, subverted for a more noble purpose: ensuring access to the biggest screen in the house.

The analyst argues that, after the dispute over the smartphone, consolidated in the duopoly between Apple and Android, the next frontier is connected television. The living room TV continues to be the most valuable advertising surface on the market, and technology giants are competing to become the operating system for this environment.

From this perspective, Sunday Ticket represents an accelerator of YouTube and YouTube TV’s presence at the center of the home entertainment experience.

This reasoning helps to explain another episode reported by Mortimer. During negotiations for a new package of five NFL games for the holiday season, YouTube reached the final stage of contract review. When the league decided to restructure the package and share it with Netflix, the platform simply abandoned the negotiation, without presenting a counterproposal.

“The message sent to Park Avenue was: YouTube wants live sports, but it doesn’t need it in the same way as a traditional broadcaster.”

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As Mortimer notes, the true genius of Sunday Ticket is in dissolving a boundary that the industry still insists on preserving: the separation between premium television and creator-owned video.

Watching is also buying

It is precisely this change in perspective that shifts the discussion to those who, in the end, finance this entire chain: advertisers.

At Google Marketing Live, held at the end of May, the company announced the expansion of its Universal Commerce Protocol checkout for Google Shopping ads displayed on YouTube and in Demand Generation campaigns.

Now, the purchase can be completed within the ad itself, while the retailer remains the registered merchant behind the scenes.

As analyst Annie Krukowska explained, pre-roll now concentrates media, commerce and data into a single experience, while Google does not assume the risk of inventory, but controls the relationship with the consumer, precisely the most valuable position in the chain.

Hence his provocation: if YouTube broadcasts the World Cup, breaks audience records on connected TV and now incorporates the shopping cart into the viewing experience, what remains as an exclusive advantage of television?

“The discussion is no longer whether YouTube has become TV. It is whether there will still be television outside of YouTube”, he argued.

The migration of sport has already begun

Em How Streaming Wins SportsMichael Beach maintains that sports remains approximately seven years behind the rest of television in migrating to streaming. If entertainment and news have already made this transition, the segment simply follows the same path at a different pace.

The numbers presented by the analyst indicate that the participation of sports in convergent TV consumption (linear and streaming combined) should increase from 21% to 27% by 2030 and reach 31% in 2035.

Beach says sports CPM remains similar between linear and streaming TV, and uses advertising spend as a reliable indicator of changing audience behavior.

If the migration of sport to streaming seems inevitable, the dispute is not just restricted to the war over broadcasting rights. It also includes managing the infrastructure that connects fans, content, advertising and commerce.

And it is at this point that Beach and Mortimer’s views converge.

The model that supported the appreciation of sports rights for decades was based on the premise that stopping live broadcasting meant monopolizing the relationship between fans and sport. What is being gradually dismantled is not the value of rights, but the idea that they guarantee, in themselves, this control.