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Why Rich Luker and his insights keep me awake at night

Rich Luker and I met up a few weeks ago at, where else, a softball game. After playing, we went out to lunch and began talking about our views and thoughts on the sports industry. During that lunch Rich shared some trends with me that really got my attention, and frankly have caused a few sleepless nights for me.

Channeling my Luker on Trends, here is what I take away from my sleepless nights:

1. The way sports is being consumed has changed and will continue to change particularly among those age 25 and younger.

2. The competition for interest, attention and investment is coming from sources and channels that are emerging and have not been factors in the past.

Esports, especially its youthful fan base, has the attention of pro sports teams in the U.S.
Photo by: GETTY IMAGES
3. Watching isn’t necessarily a passive activity. There is less spectating and more doing, and when there is spectating as in the case of esports, the spectating is for the purpose of improving their own performance.
Consider if you will:

No fan favorites might mean less interest, attention and investment.

On average, the NFL, MLB, NBA, NHL and NCAA football and basketball each have 8 million fewer fans today who have a favorite team in their preferred sport than just five years ago (2011). That represents a combined loss of 48 million fans who have a favorite team.

There are at least two possible explanations for the lack of favorite teams. The first is that video games and fantasy sports have blurred the lines and importance of the actual teams. Creating your own “Madden” teams or fantasy teams shifts the emphasis from the teams to the individuals and thus your favorite team becomes the one you have created. The other possibility is that interest in following team sports is declining. When you add in other factors such as cord-cutting and other forms of competition, spectator sports (live and on television) are entering very difficult waters.

No matter how you spell it — we’re all about football/futbol.

Since 2015, soccer is the second favorite overall sport for all Americans age 12-45, and Lionel Messi is the favorite overall active athlete for males 12-54.

The world’s most popular sport has made serious inroads in the U.S. and will continue to do so. Thirteen TV networks are broadcasting soccer matches in the U.S. Among youth age 12-17, MLS is more popular than MLB.

More than 25 million Americans watched the U.S. defeat Japan in the Women’s World Cup. Fox generated $40 million in ad revenue for the Women’s World Cup from 50 U.S. advertisers.

Wandering eyeballs.

One-third of all fans 13 and older who use the internet for something related to sports say that, overall, their time online has meant they are spending less time watching or participating in sports.

Short, sweet, to the point and on demand is how millennials like their information. The NFL Network and DirecTV “red zone” channels ensure that they never need to watch an entire NFL game.

“SportsCenter” and ESPN.com have mastered the “highlight and the sound bite.” “SportsCenter AM” was designed to deliver a trendy approach to sports news that might capture millennial viewers.

The future is all about E.

While only half of the U.S. population age 12 and older is really aware of esports, 30 percent of males 12-17 are already avid fans.

In 2014, 205 million people watched or played esports. If those people were a nation it would be the fifth largest in the world and it is growing by 21 percent annually. Need more evidence? The 2014 League of Legends Championship drew an online audience of 27 million, which is more than any other championship in any professional sport except the Super Bowl.

These statistics are not lost on U.S. professional teams. The Philadelphia 76ers recently announced the purchase of esports franchises Team Dignitas and Team Apex (which will be combined under the name Team Dignitas), which was followed by an announcement that included Golden State Warriors ownership/leadership making a similar purchase. Sixers executives believe the esports investment will give them an entry for sponsors into a younger, male-dominated demographic that defines the white-hot esports industry.

Given each of these factors, here is what we need to do:

Initiate grassroots marketing efforts that educate and inform the under-25 market as to what’s in it for them.

Embrace a variety of marketing channels that are age- and interest-specific and relevant.

Undertake a serious competitive analysis of your marketplace and begin to understand what is perceived as cool and in the moment, and, most importantly, why that is the case.

Examine your venues and determine what it is you need to create to attract younger fans and hold their interest. Video gaming lounges and interactive areas would be a good start, and non-premium clubs with affordable concessions would be another consideration.

Finally, consider alterations to playing formats that take up less time and may not require a high level of proficiency but are perceived to be more social and more fun. For example, what could speed golf look like? It might involve a four-player team-oriented game where each person has a specialization and you are judged on time not score.

In 1964, Bob Dylan released “The Times They Are A-Changin’,” and in the sports world of 2016 those changes are coming hard and fast. While they may not show up in the gate receipts today, they surely will in the next decade. So if this news doesn’t cause a few sleepless nights about what you should be doing, you may be sleeping through these changes during your day job. In the future, you might have plenty of time to catch up on that sleep.

Bill Sutton (wsutton1@usf.edu) is the founding director of the sport and entertainment business management MBA at the University of South Florida and principal of Bill Sutton & Associates. Follow him on Twitter @Sutton_ImpactU.

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