Marc Portus, Praxis Performance Group
Understanding global trends in sport helps clarify industry context. This type of content helps leaders move out of a transactional operational mode and start thinking big picture, which is essential to develop an insightful strategy. There are a range of global trends that will be more important to some sports over others, but here are five selected global trends that you should consider to inform your strategic planning. These trends are mostly drawn from a range of annual surveys and reports from consulting firms PwC, Nielsen Sports and Deloitte.
Global Trend 1: Altering revenue models
The sports industry has lost revenue during the COVID-19 pandemic due to cancelled events or holding events in empty stadiums, firstly through lost ticketing and hospitality sales, which has also impacted media rights, broadcasting deals, sponsorship and advertising. In the PwC surveys of 2020 and 2021 this has seen betting related rights emerge as the fastest revenue growth area. This is expected to continue through more sophisticated insights and analytics being made available to fans through digital platforms. The changing nature of media consumption is also expected to significantly shift revenue generation, with the traditional broadcast media rights deals morphing into partnerships and platforms where streaming and time-shifting will be the norm. Fans being able to watch their favourite sport on demand is a growth area for young fans, while older spectators will tend to stick to traditional broadcaster timeslots. Recently it appeared broadcasters felt the National Rugby League (NRL) in Australia went a step too far with their digital offerings, pressuring them to downscale their platform operations. This illustrates the tension points as the landscape shifts, there are probably plenty more to come.
For sports not at the scale of worrying about broadcast arrangements, there is opportunity through the many digital streaming platforms as they become more affordable, accessible through social platforms or leverageable through digital partnerships. Highlights and short form content are the most popular offerings through these new mediums, but understanding fan demographics and viewing preferences is important to gain traction (more on this in global trend 3).
Global Trend 2: Sports role in society
“Accept that sport is political and take a stance”.
Professor Mikkel Draebye, SDA Bocconi School of Management (PwC, 2021)
Generally, sports and athletes have historically preferred not to take stances regarding contemporary social, political and environmental issues. However, sports have had to respond to fan, commercial partner and sponsor expectations. These stakholders see sport providing an influential platform to promote change for issues that are important to their image, and ultimately their invetsment. In the US the Black Lives Matter movement has made a significant impact, demonstrating that important and larger societal issues are now expected to be addressed by sports, and often led by prominent athletes.
Cricket Australia’s decision to indefinitely postpone the men’s test match with Afghanistan due to the Taliban’s ban on women playing sport in that country is a recent example. The equalisation of opportunity and support for women in sport is a long neglected area. Many new initiatives have commenced to address specific physical preparation for female athletes through to correcting the disproportionate lack of female coaches, sports administrators and board members. While progress has been made in many of these areas in Australia, there is still work to do.
There is also evidence that it makes for better business decisions too, due to more diversified thinking and representative decision making. It also provides more informed access to 50% of the consumer (female) market. However, it is important that sport aligns and embraces contemporary social issues in authentic ways, less than genuine efforts to chase commercial opportunities through important social issues will likely fail. Consumers sense disingenuous sentiment and trust can be easily lost. Building trust of fans and participants was rated as an important or the most important driver for 84% of sports leaders to engage in social and environmental issues in the PwC 2021 sport survey.
Global Trend 3: Changing fan engagement
Having a better relationship with fans is a fundamental imperative for sports moving forward. As with any relationship, understanding your partner is an important ingredient for a better relationship! As per Stephen Covey’s 5th Habit - seek first to understand, then to be understood. Having a better understanding of who you are trying to appeal to, how they would interact with you and why, is critical to build and sustain fan engagement. Increased fan engagement in turn leads to revenue generation opportunities. Given the shifting media landscape (outlined in trend 1) sports are taking more ownership with how they connect with fans.
For example, according to Nielsen Sports, social media generally conveys quick updates and brief highlights best, websites and TV are still preferred for in-depth analysis, but not surprisingly millennials have strong preferences for sport consumption through social media, apps and streaming devices. Females have a 41% higher preference to engage with sport through social media than men, and in general fans enjoy connecting with their favourite sports through team and athlete generated content (more on this soon). A recent study reports that female sports fans are also more likely to purchase sponsor products.
Better resourced sports invest in technology and analytics capabilities to inform their initiatives here, however there are still plenty of low-cost methods (e.g. social platform analytics features) for sports to consider building their intelligence in this area. Recall all those annoying surveys sports keep throwing at you recently? There is a reason, but doing it well takes some planning and forethought.
Global Trend 4: Athletes as content creators
This has been a trend for a couple of years now, but it is still important, particularly for less commercially oriented sports. A sports leading athletes’ will often outperform their team, club, event or federation as a touchpoint in social media platforms such as Twitter, Facebook and Instagram (Deloitte, 2019). For example, consider the following statistics on Twitter (as of October 2021):
US baseballer Mike Trout (@MikeTrout) had 2.5M followers versus his team the Los Angeles Angels’ (@ANGELS) 1.2M followers.
Indian cricketer Virat Kohli (@imVkolhi) had 43.9M followers versus Team India’s 15.4M followers (@BCCI).
Tennis star Serena Williams (@serenawilliams) had 10.7M twitter followers versus the US Open’s (@usopen) 2.1M followers.
The pattern is clear, and of course it doesn’t always hold, but its important to understand that a high profile athlete, or a future high profile athlete, can help your sport increase its profile and build fan engagement. Developing a mutually beneficial agreement with your up and coming athletes in this area should make for a smart strategy. If done well it can be a win-win for the athlete and the sport.
Behind the scenes documentaries about athletes, teams and clubs is a booming niche being exploited by many sports, some very successfully. Some notable documentaries are Power Meri, which follows the Papua New Guinea Orchids female rugby league team through to their first World Cup appearance in 2017, The Test, an Amazon docuseries tracking the Australian men’s cricket team as they rebuild after the “sandpaper gate” scandal, and Drive to Survive, a Netflix docuseries giving access to all the trials, tensions and successes of the top teams in Formula 1 motor racing. Stories tracking journeys from some form of adversity (e.g. a scandal, or a disadvantaged upbringing) through to a significant achievement makes for great viewing, and these documentaries have it spades. People love insights and an engaging backstory to their sporting heros and teams.
Global Trend 5: Attacking entertaining play
Based on ever evolving athlete preparation practices, changing event formats and rule changes, sport is expected to get more and more entertaining and free flowing. Higher scores, newer skills and fewer stoppages are an expected part of the evolution of sport. It is what will keep it attractive to old and new fans and keep them coming back for more in an age where more and more leisure activities compete for peoples’ time.
This is not to downplay the value of defence and other tactical nuances of sports. Rugby League in Australia in the last year or two is an interesting case in point. There have been several rule changes to the game – most notably the six again rule – where the attacking side gets another 6 tackles, rather than a penalty, when the defending side infringes. Its largely worked, with the game considered a lot freer flowing and attractive for fans and broadcasters (if you want to see what free flowing rguby league looks like check out this NRL try of the year from the Manly Warringah Sea Eagles).
However the eventual NRL competition winners this year – the Penrith Panthers - built their successful finals campaign on several factors including a very strong defence, in a series of tightly contested, and relatively lower scoring games. While attacking sport will always be attractive to fans and other stakeholders, lopsided scorelines can become monotonous. Deloitte (2021) reports that attacking prowess will need to be balanced with skilful and tactically relevant defence to foster close contests.
An example of shorter more attacking formats of a game attracting new and old viewers is the global spread of the shorter forms of cricket, such as the Twenty/20 format. Games are over in 3 hours, rather than the traditional multi-day formats, and feature high scoring, a lot more sixes, more athletic fielding, new bowling variations and supplementary entertainment. Commercialised to a large scale in India, the Indian Premier League (IPL) has become one of the pre-eminent annual tournaments in world cricket. In Australia the format was introduced to bring new audiences from non-traditional cricket backgrounds, families and in particular females into the game. It has been a strong strategy, and is the form of cricket that allows a possible re-entry into the Olympic Games, plus move into new markets where cricket is not as widely played, such as China and the USA.
Conclusion
Getting your strategy right in sport is critical for growth, organisational harmony, on-field performance and stakeholder engagement. Understanding the global context your sport is operating in is an important start to get your strategy heading in the right direction. From fans, to athletes, commercial partners and investors, having a great strategy demonstrates that you are on your game, you understand the big picture and you have the insights to take your sport forward. Understand global trends to help you get there.
Background Materials
Deloitte (2019). Deloitte's sport industry starting lineup: Trends expected to disrupt and dominate 2019. https://www2.deloitte.com/be/en/pages/technology-media-and-telecommunications/articles/sports-business-trends-disruption.html
Deloitte (2021). 2021 Outlook for the US Sports Industry. https://www2.deloitte.com/us/en/pages/technology-media-and-telecommunications/articles/sports-business-trends-disruption.html
Nielsen Sports (2021). The Changing Value of Sponsorship: 2021 Global Sports Marketing Trends. www.nielsensports.com/the-changing-value-of-sponsorship/
PwC (2020). Sports Industry: system rebooting. PwC's Sports Surevy 2020. https://www.pwc.ch/en/insights/sport/sports-survey-2020.html
PwC (2021). Sports Industry: ready for recovery? PwC's Sports Survey 2021. https://www.pwc.ch/en/insights/sport/sports-survey-2021.html