All sports organizations today – from federations to national associations, to leagues and teams and player bodies – face enormous opportunities and challenges.
Sports can represent the ultimate passion-led weapon in today’s competition for attention across media, entertainment, and consumer brands, but faltering traditional media rights fee income growth in many developing markets and the changing tastes and needs of Generation Z (and Alpha) means that every sports organization is reviewing what they do and how they do it.
These responses come down to deciding what to do in four interrelated areas –
(i) Expanding or deepening the fan relationship – from avid fans to the casual fan;
(ii) Getting the proposition right – from the overall calendar to individual leagues and events;
(iii) Optimizing monetization – from B2B or D2C media income to sponsorship relationships, data exploitation, event hosting fees, ticketing, and e-commerce;
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(iv) Sustaining and growing the whole complex ecosystem from participation levels to elite athlete/player development to team finances, to competition development – and bringing all the key stakeholders along with any plan.
Sports have become more practiced at looking at each of these four areas individually, and a whole host of advisers – format designers, CRM specialists, rights agencies, change management consultants, and corporate financiers – have grown up to serve each area. But every sport is going to have to make them work better together in order to ensure their sport enjoys a virtuous circle of growth (or “flywheel of success” as the Americans like to call it) rather than a circle of relative decline both compared with other sports and other entertainment.
A proposal to change a competition format or the rules of the sport itself can only be properly assessed if its impact on developing the fan base in the medium and long term, or on key areas of monetization and long-term ecosystem sustainability is also assessed.
Similarly, any move to develop a sports own direct-to-consumer over-the-top TV service may not be just about enhancing media rights income but also about growing fan engagement, enhancing sponsor activation, easing grassroots participation, and facilitating player development paths. No move to raise external funds to sustain an existing ecosystem should be made without having a consistent plan for fan development, monetization strategies, or potential format changes.
What all sports increasingly need, is the ability to link all their levers together in order to develop a sustainable long-term plan for the future and to get the stakeholders to agree to that plan. They can either do that themselves in an orderly fashion or end up reacting to a series of challenges from external disruptors or from within their own sport – witness the recent LIV Golf vs. PGA events, or the planned and abandoned European Superleague in soccer or even the rapid development of the Saudi Pro League or the increasing power and influence of the Board of Control for Cricket in India and Indian Premier League in world cricket.
While the most obvious places to go for such strategic advice might seem to be the existing big names in corporate strategy, this may fail to deal with the fact that many sports are run as not-for-profit, social purpose organizations with complex constitutions. Often changes are subject to supermajority votes of member organisations and sometimes raise national and geopolitical issues that need to be handled sensitively both with governments and voters.
It needs a combination of strategic insight, commercial execution experience, regulatory/policy sensitivity, and financial assessment capability that can often not be obtained by traditional strategy houses or from specialists – no matter how good – in just fan base development, monetization, financing, or format reform.
The future of sports is going to be very different from the past, and that demands a new way of developing solutions and a new type of multifaceted adviser.
Oliver & Ohlbaum Associates is an independent strategy advisor in the media, entertainment, and sports sectors.