By Rick Horrow & Scott Pranger
What does the future of sports look like? It’s shaping up to be more interactive than you might think, especially for spectators on the sidelines. Who stands to gain as borders evaporate, new forms of competition take center stage, and consumer preferences evolve—and how?
Let’s review five areas that will define the next 50 quarters of sports and how you can capitalize on these trends moving forward.
#1: Esports & Gaming
Coming off an astronomical rise in popularity, Esports aren’t going away anytime soon. Similarly, the video game industry continues to expand, and it is expected to reach $219B in revenue by 2024 (Washington Post). As professional sports teams invest in Esports, younger generations continue to turn out in droves to watch and interact. The streaming space plays a huge role in connecting professional players and their fans.
#2 Payments & currency
Now that college athletes can earn money off their name, image, and likeness (NIL), opportunity is exploding for them around the country. While things are a bit like the Wild West now, regulations will inevitably follow. Making sure athletes are paid and have easy access to the data for compliance’s sake will be important for schools and teams.
#3 Web 3.0
First, what is Web 3.0? It refers to the next stage of development in the internet. In the current iteration of the internet, Web 2.0, content creators enjoy earning power, but they’re also beholden to the third-party platforms they use to interact with their followers. Web 3.0, by contrast, will be decentralized such that platforms won’t “own” fan relationships, putting that power in the hands of content creators instead.
Without the middlemen, content creators will be free to interact more directly with followers and fans. Platforms hoping to stay relevant will need to shift their focus from offering a “meeting place” to providing tools that facilitate and/or enhance the creator/fan relationship.
#4 Venues & facilities
For younger generations, it’s all about the experience—not things. They’re spending more money on live entertainment, spectator sports, theme parks, and travel than product-oriented services. As more young people look to live events for entertainment, venues and facilities will need to provide unique, differentiated experiences, even for something as simple as buying merchandise on-location.
The challenge for venues and facilities is handling the increased demand, given that they currently rely heavily on hardware and software solutions. They’ll need systems that can handle payments, including the increasing acceptance of cryptocurrency, to facilitate a unique, intuitive, and simple purchasing experience.
Fandoms are becoming less and less tied to geographical location. Fans interact with one another from around the world and will continue to seek more accessibility from decentralized networks. Target markets and dedicated fans who spend good money will flock to whatever systems give them the greatest freedom and return on investment for using their platform.
Capitalizing on these trends
So how can we prepare for these upcoming trends? Integration and ease of access will be key across the board as the global population looks for ways to onboard using their smartphones.
Fans are going to be more involved with their favorite teams than ever, and they’ll be able to support and even make money backing their favorite athletes. Both sides will need an ecosystem or platform that supports these interactions.
The Roaring 20’s
Though nothing is ever certain, we can confidently look forward to a 21st century “Roaring 20s” thanks to what we know about the last one. The 20th century version followed a global pandemic, and the pent-up demand to gather again fueled economic expansion, both generally and specifically with respect to mass entertainment forms and venues – including the establishment of the golden age of sports.
The easing of a pandemic that took 675,000 American lives in 1918 to 1919 can be credited with the remarkable attendance records quickly established in baseball and boxing, and the building of new venues for gathering – from ballparks like Yankee Stadium to movie palaces around the nation.
One of The Sport Business Handbook’s contributors, former National Football League Senior Vice President of Events Frank Supovitz, has written extensively on the topic of sports facilities, their evolution, and the impact of the large gatherings held within them. He’s also been an expert commentator making predictions about the future of those spaces.
The 21st century “Roaring 20s” will have some familiar features and some novel ones. We will return to gathering, although perhaps more deliberately given the advances in scientific knowledge that can guide us today. What’s different is that we have far more venues that will facilitate this return compared to a hundred years ago, as well as a greater acceptance and enjoyment of consuming sports from a distance than was the case when radio was the primary mass media.
Also, the occasions where we will gather may be different this time around. We have substantially more options from which to choose today, including burgeoning new opportunities such as Esports and more opportunities than ever on and off the field for women and BIPOC individuals.
Just over 100 years later, we can begin to see some positive impacts on the sports world – impacts even more significant than those exquisite cardboard cutouts that will live with us forever! Consider these three assertions that have emerged from the business of sports during the pandemic:
- Creativity is born out of necessity: Facing the inability to hold live events, sports leagues and media partners explored options to mitigate lost TV revenue, which is typically the primary source of any given league’s earnings, and grant additional rights making goods, and extend existing agreements. Creativity sharpens an organization’s focus. While it may seem essential to deal with layoffs and shutdowns occurring all around you, leaders must also see beyond the carnage and embrace an entrepreneurial mindset to pull their teams through.
- Best practices are born out of natural selection: Some organizations succeed in tumultuous times; others end up on the sidelines through bankruptcy, folding, and mergers. This is a survival of the fittest mentality. This, folks, is business – the business of sports. To live to see another day, organizations must stay in touch with their customers and find new ones.
- Cooperation is born out of urgency: Unprecedented sharing resulted from the realization that for all the disagreements and cut-throat competition that mark our favorite sports, the business of sports requires that we act as though we are all in this together. Because we are. The industry rises and falls together. We learn from each other, and we innovate in real time.
- Creativity, best practices, and cooperation. In the opening pages of the just-published book, The Sports Business Handbook: Insights From 100+ Leaders Who Shaped 50 Years of the Industry, we share examples of how the COVID-19 response required the sports business industry to be nimble in these three areas. But this was the case long before the pandemic.
The first edition came out just before COVID-19 shook the world. Through The Sports Business Handbook we had the benefit of referring to the history of sports business during a period of growth to help guide us moving forward.
In the revised edition, we provided post-pandemic insights from current industry leaders divided into three areas – creativity, best practices, and cooperation. Those insights draw from our current environment to provide ideas we can learn from, adopt, and implement now.
Rick Horrow, JD is a leading expert in the business of sports and has orchestrated over 100 deals worth more than $20 billion. The CEO of Horrow Sports Ventures, he has served as a sports business analyst for SportsGrid Television and Radio Network, FOX Sports, Bloomberg TV, Bloomberg Businessweek, Reuters, NBC, PBS, and the BBC. Horrow is nicknamed “The Sports Professor” thanks to his time spent as a visiting expert on sport law at his alma mater, Harvard Law School.
Scott Pranger is the founder and CEO of Nashville-based digital asset/mobile payment leader Staks. A three-time Inc. 500 entrepreneur, Pranger has a demonstrated track record in expanding publicly traded and early-stage companies into US and international markets. An established force in the fields of entrepreneurial information technology and software industry operations, Pranger was inducted into his university’s College of Business and Analytics Hall of Fame in 2004.