The Media, Sport and Entertainment (MSE) sector is diverse and faces an equally diverse spectrum of sustainability and environmental, social, and corporate governance (ESG) challenges. Key sustainability issues across the sector include data privacy, diversity and inclusion, equality, anti-discrimination, competition, and fraud and corruption. Social and governance issues dominate the sector, although, increasingly, attention is turning to environmental issues: high energy use, waste, and climate change concerns.
Having advised a range of MSE clients, among them the world's largest football league, leading global media outlets, leading advertising agencies and major Hollywood studios, we understand the sector is complex and multi-faceted, operating across multiple jurisdictions and responding to an array of different stakeholders. We have seen that businesses that respond to sustainability issues in a reactive, siloed manner stand to lose their market position, profit, access to capital and brand value. Businesses cannot assume that tackling one ESG issue well (such as a single sexual harassment claim) is the end of the sustainability story.
Our MSE Sustainability and ESG team takes a holistic approach to these complexities. We begin with our extensive experience advising businesses on such issues as intellectual property protection, finance and corporate governance, regulatory compliance, media rights, antitrust and competition law, and disputes and crisis management. Our team combines this in-depth legal experience across the MSE sector with wider experience on cross-cutting ESG issues to offer our clients integrated, comprehensive advice wherever they are in their responsibility journey – whether developing a sustainability strategy or managing disputes and crises.
Companies that are adopters and leaders in the transition to a sustainable future face not only risks and challenges but ample opportunities for growth. Our team strives to work with you to manage the risks and harness the opportunities as you make this transition.
Media, broadcasting and film
Media, broadcasting and film companies face systemic risks associated with customer engagement, data security and the right to privacy. Content regulation has moved beyond mere compliance; consumers have become social media activists and companies are judged for media bias, prejudice and discriminatory content. For example, film and content companies are exposed to key person risk and are highly vulnerable to social controversies which may result in program changes and cancellations. While social factors predominate, film studios and broadcasters today are also facing pressures to address environmental concerns ̶ to limit emissions and ensure sustainable energy use and energy efficiency and to manage waste in high-budget productions.
For the publishing industry, the changing nature of its relationship with the consumer in the digital era has uncovered new sustainability challenges. Companies need to respond to customer concerns, particularly on data privacy and security, as well as regulatory concerns on anti-competitive practices and content regulation. Compliance in one area is often not enough to meet stakeholder expectations: for example, social movements are raising pressure on publishers to be accountable for content.
The shift to a greater emphasis on sustainability and ESG issues is particularly noticeable in the advertising sector, where brands are increasingly making claims about their products' sustainability credentials and are also giving greater precedence to ethical issues in ad placement. Given the increased importance of sustainability issues to consumers, advertising regulators are more closely focussing on such matters. This means that compliance with advertising regulation around issues such as environmental ad claims, charity partnerships, and social cause-linked marketing campaigns is more important than ever before, for both advertisers and agencies.
Sports teams and franchises
The sports governance sector is facing pressure to transition to a sustainable model not only from the growing number of investors with responsible investment standards but the broad base of consumers and fans. The focus in sports has been on the social aspects of ESG, including anti-discrimination, equality and diversity and inclusion, and the governance aspects, such as fraud and corruption. Sports teams and franchises that have failed to meet stakeholder expectations ̶ for example, by creating policies to address racial inequities and sexual harassment ̶ have faced a social and investor backlash. Those teams with home stadiums are also being held accountable on environmental performance, including emissions, energy efficiency and waste management.
Events held on a global scale
Events held on an international or global scale involve a range of sustainability considerations, from understanding local laws and regulation of emissions, energy use and waste management to supply chain management, mass transit accessibility, employment rights, and jurisdictional risks in each host country. Broader social and environmental factors play key roles too. The coronavirus disease 2019 (COVID-19) pandemic, which swiftly led to the cancellation of competitions and performances on every level around the world, has shown how such large-scale events can be particularly vulnerable to social and environmental factors. Climate change – higher temperatures, the smoke from fires, lack of winter snow, drought, flooding – is already impacting an array of sports from football and tennis to skiing and golf. Planning for events such as international sport competitions will continue to be challenging in the new normal.
To discuss the implications of these issues for your business, please contact our ESG leaders