High school sports have become big business over the past decade. The professionalization of multimedia rights (MMR) sales, combined with technological advances and changes in consumer behavior, have driven state association revenues steadily and to the right with no signs of abating.
The trendline also shows no signs of abating. According to Nielsen AdIntel, brand advertising spending on high school state championships is up 25% through 2021.
Mike Schreiber (CEO, Playfly Sports) has enjoyed a front row seat to the rise of college sports for the past 30 years (his company is the second largest holder of college media rights). He said the change underway in high school sports resembles the progression he witnessed at the college level: “the next wave of college sports is high-end high school sports.”
JWS’s take: High school athletics does not have a governing body that organizes national championships. Instead, each state has an association made up of member schools that governs high school sports and activities (think: band, chess, debate and cheer) in the jurisdiction. The state championship is the culminating event for each sport sponsored by the association.
Historically, high school sports championships have been undermonetized because the state associations that put them on have not dedicated the resources, such as experienced sales teams, to pursue large-scale commercial opportunities. Managers with other responsibilities and relatively little experience negotiating media rights deals were tasked with selling media, advertising, sponsorships and digital.
The lack of resources resulted in high school sports inventory going largely to local brands. “State associations focused on major population centers as opportunities to sell sponsorship; or [cities] where their state championships were,” said Chuck Schmidt (CEO of Playfly Sports Properties).
Outfront Media set out to change that in 2011, bringing high school athletics into the outsourced model that professional and college teams rely on to manage their local media rights. The company purchased the web, app, local radio and linear broadcast rights, and merchandising assets and inventory for the Arizona state championships. The media company subsequently engaged “in a process to identify [and onboard] sponsors, [involve] community outreach programs, [and] invest in various technologies that a high school program may not have,” he said Schmidt.
Outfront Sports, formerly known as CBS Outdoor Sports, has since been acquired by Playfly Sports. Playfly controls the media rights to 28 men’s and women’s sports in about one-third of the state associations.
High school sports offer regional and national sponsors and advertisers the opportunity to reach and develop relationships with a large group of impressionable sports fans. “You’re talking about a really interesting group of committed people that you can start with when they’re [young],” Schreiber said.
For perspective, California has “more than 900,000 high school athletes, and when you add their family members, you’re talking about more than three million people every year who are involved in high school athletics,” Schmidt said.
Playfly and Teall Properties Group (TPG), which represents 26 state associations, have professionalized high school athletics media and elevated the value of state championship IP. “[Thirty years ago] universities handled most of their sports rights individually or would have multiple companies representing them at once,” said Mike Wolfert (CEO, TPG). “It caused confusion in the market and made it difficult for regional and national brands to make large ad buys.”
Technological innovation has played a critical role. “Individual high schools all the way up to state associations now have more competent websites, apps and social media channels, and can reach their fans with more frequency and engagement in ways that didn’t exist more than 10 years ago,” Wolfert said . . “Additionally, nearly half of the nation’s high schools now broadcast their events through the National Federation of State High Schools (NFHS) Network, which includes nearly every sport and activity offered by a school at all grade levels.”
The NFHS Network carried games from more than 5,700 schools during the 2020-21 school year; a 174% increase over the previous year. By 2022-23, more than 9,000 high schools will broadcast their games on the network.
The increase in game content available has contributed to increased consumption. NFHS content received more than 18 million views in 2020-21, an increase of 225% year-on-year.
Changes in consumer behavior (think: parents became comfortable streaming their kids’ games during the pandemic) and a post-lockdown “community resurgence” are also believed to be factors in the cited audience trends.
Growth in turn has influenced rights values. Brands are willing to pay more to reach more people, especially now that they have better data and a better understanding of how high school sports maintain a deep reach in local communities, Wolfert said.
Unique opportunities to engage stakeholders on a personal level are also bringing new partners to the table. Schmidt said Playfly has packages that include authorized broadcasting to select athletes, parents, coaches and administrators via mobile apps, website or live streaming.
Technology has expanded the reach of games and contributed to a deeper pool of potential brand partners. Today, there are many more regional and national companies investing in HS Sports IP than there were a decade ago, even in venues and sports where player participation is flat or in decline.
To be clear, brands that purchase high school state championship inventory also receive all regular season and postseason games, so association partners can stay in front of their target audience throughout the season. sport This is not possible at the collegiate level, as the NCAA and the College Football Playoff control many of the assets of postseason and championship games.
Technology has also been a revenue driver for some state associations. Those who have adopted a digital ticketing platform may be charged a service fee, a portion of which they are entitled to keep. “We are also able to sell sponsorship and advertising as part of these digital platforms,” Schmidt said.
Playfly, Teall and companies like this are all for profit companies. But they aren’t the only ones benefiting from the professionalization of high school sports. The dollars that pay for rights “go to the state and then the state [sends] those funds to the schools and the state ecosystem for all of high school athletics in that state,” Schmidt said. “It comes down to elevating high school athletics.” The more revenue IP can bring in, the more programs the partnership schools can fund.
