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Volume 27 No. 7
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Transformational Trends in the Sports Business

Sports are gradually and cautiously starting to resume play. However, with no universal guidelines or script to follow, the reintroduction has been far from a one-size-fits-all approach.

The NBA tipped off at Disney World this week. European football’s hallowed grounds have been hosting the restart of the season to eerily silent stadiums and record viewing numbers. Meanwhile, the UFC launched Fight Island in Dubai for their international fighters that cannot travel to the United States.  

Watching games unfold on the court, pitch, field, octagon, etc., across our many different screens may look somewhat the same, albeit minus the passionate crowd energy. However, in the front offices of sports organizations across the globe, the lasting impact and changes created by COVID-19 will be felt for years to come.

Here are some predictions on how the sports world will be transformed:

Importance of revenue diversification: Modern sports organizations have faithfully relied on broadcast, sponsorship, and ticketing as their core sources of revenue for decades. With all of these foundational revenue sources in jeopardy or decline, it is now essential for sports organizations to identify and explore different revenue streams.

Replacing the rush: Sports betting will accelerate adoption with core fans that cannot attend live games. These core fans will need to replace the adrenaline rush of tailgating and pregame hype.

Local to global: E-commerce will branch out into new areas as every fan’s home becomes their new stadium, and supporting all things local (including sports teams) will be a passionate cause on a global level.

The home gym:With the boom in gym equipment purchases and newly formed training habits, home workouts are replacing fitness club memberships. Savvy sports organizations will develop fitness content within their owned and operated platforms to deepen a connection with fans that extends beyond the playing field.

Acceleration of OTT adoption: The increase in consumer streaming and adoption of new OTT services during quarantine will result in a diversification of media consumption, and accelerate the rate at which users migrate to OTT platforms.

Content is king: Sports organizations will realize the importance and value of content beyond game highlights and coverage, and will aggressively pursue development options (largely through external partnerships due to budget limitations).

Adapt and evolve:Live sports broadcast coverage will permanently evolve based on new features that are successful during the COVID-19 games. Ex: Who knew Charles Barkley would be such an amazing golf cart commentator? Who knew we even needed a golf cart commentator?

Innovative storytelling:Whether or not sports entities keep their OTT subscribers will be directly correlated to their investment in telling compelling stories and developing diverse content formats. This is no easy task, and one that requires an evolved approach.

Short-term decline of media rights: Many media companies will look to renegotiate or submit lower bids for sports rights due to a loss in ad revenue. This will drive media format diversification and creativity through alternative content ideas and distribution formats to support their bids.

New audience segments:Media companies will sweeten lower offers with intangibles focused on growing new audience segments, and creating ancillary revenue streams (merchandise, betting integration, esports, etc.).

Non-traditional formats: Rights holders will get less guaranteed revenue for upcoming broadcast bids, forcing them to place bets in nontraditional areas or formats to make up the delta in revenue.

Original content: Streaming networks will be inundated with requests by sports organizations to develop programming and original content. It will become harder to secure episodic content deals without truly original storytelling.

The fans are the future: Serving the needs of fans and restoring society will be a top priority for brands. This will guide their sports partnership and messaging strategy.

There are few industries that are simultaneously as rooted in tradition and as ripe for disruption as sports. As the next two years force an evolution in the sports business model, it will be interesting to see which organizations view this as an opportunity to drive permanent change, and which organizations make temporary adjustments in hopes for a celebrated return to the business model of old.

Craig Howe is the CEO and founder of Rebel Ventures, an agency dedicated to helping sports organizations transform into modern media and entertainment businesses.