Sports viewership is soaring, and revenue is growing faster than some countries’ GDP, making it a $700 billion global industry. What makes sports industry so successful?
According to Inga Stasiulionytė, former Olympian and head of the MIT Sports Entrepreneurship Bootcamp, this is the result of sports business adapting to modern challenges, trends and audiences – embracing digitalisation, big data, technology and the newest research in many disciplines, including psychology.
It’s crucial to understand the future changes in the industry in order to adapt, improve, and move forward.
Here are the 7 important current sports industry trends, according to Stasiulionytė, who is also behind Ofounders, a startup specialising in Olympic-mindset techniques for executives, business and sports.
Clear philosophy (to win or to earn) for on and off-field activities. According to Ben Shields, Senior Lecturer at the MIT Sloan School of Management, the sports business strategies fall into two categories: for on-the-field operations, the key question to answer is “how do we help to win”; for off-the-field solutions, the question is “how do we help to earn money.”
For example, German Bundesliga has built themselves to be as one of the most powerful media companies. Distilling a clear philosophy for off-field activities strengthens the organisation and helps it become distinctive and unbeatable.
2. Scalable direction
Elite teams are creating scalable and transferable business models by focusing on fans. Sports teams – especially German elite teams – are discovering that their players are not the centre of attention, their fans are.
Players come and go, get injured, games are won and lost – a lot of success factors depend on pure luck. The business problem that requires a solution is how to make fans come to games no matter who plays.
“Fans are the stars of the show. Leagues and teams are going directly to them now,” explained Shields. Teams are learning to discover the engine that drives business.
For example, sports teams are creating their business plans based on enhancing their community’s participation in sports and growing fans’ loyalty to the club instead of focusing on athletes. Big data, also used in sports, helps gain clarity and deeper perspectives.
3. Smart data
Transferring big data into smart data helps achieve meaningful results. From wearables that track athlete movement to trackers in hockey pucks or basketball nets, fan engagement charts, ticket sales and sponsorship behaviours, it all comes down to huge amounts of data that has to be put in context.
However, big data is not always interpreted in the right way. “Big data, big words, little action. We need to transform big data into smart data,” explained Sascha L. Schmidt, Director, Center for Sports and Management at WHU Otto Beisheim School of Management.
Companies pride themselves in collecting big data sets and promoting it as their competitive advantage, but very few know how to use that data to deliver meaningful results. Interpreting this data is the fundamental step into turning it into smart data that can help an athlete, a team or a sports business.
By correctly analysing the tremendous amount of data, teams can understand how to keep players healthy, create strategies to win, deliver excitement to fans and profitable exposure to sponsors.
4. Personalising game experiences.
The days when enjoying the game meant only sitting in the stadium or in front of the screen are over. Fans want to engage with their favourite teams, follow their adored players into the stadium, and share special moments with the world.
Personalisation is one of the most important methods used by the sports industry to make the game experience better for everyone.
There are services offering camera angles with zoomed-in views meant for mobile devices. The NBA, for example, now offers live on-screen group chats with celeb influencers, in-depth analytics and so on.
Moving forward, there will be services designed to let fans engage with the content, even more, using personalised camera angles and gamification, among others. Personalisation is also helping to improve athlete health, scouting and company employee career pathing.
5. Promoting human & technology interaction
Technological innovations have become one of the most important pieces in athlete development. Data analysis may help optimise player’s performance as well as determine the risk of trauma, leading to a 30% reduction in player injuries.
Dr. Brett Kirby, Lead Physiologist of Next Generation Research in Nike Sport Research Lab, has been working on Nike’s Breaking2 attempt to break a marathon run in less than two hours. The meticulous data was used to select a fitting athlete and create a tailored training course. The experiment ended in a history-making run, when on 12 October 2019, Kenyan marathoner Eliud Kipchoge finished the 42.2km distance in 1:59:40, becoming the first athlete to run a marathon in under two hours.
6. Driving change
Instilling systematic structures of change for future-readiness. For a long time, sports were considered a hobby – no one was taking sports business seriously. Those who saw the major changes in media, technologies and people’s lifestyle could predict the sports business growth and take advantage of it.
“On the surface, we see only certain events, but underneath there are patterns of change and systematic structures that are driving those events. If you understand systematic structures, you don’t need to wait for events to happen. You become the driving force of global change,” explained Erdin Beshimov, Lecturer and Director, MIT Bootcamps on the transforming changes of the sports industry.
Therefore, it’s advisable not to get attached to one worldview or one idea. “The biggest problem is when sports entrepreneurs are getting attached to their business idea believing that it is their golden ticket to make a significant difference and fearing that a new idea will never come again. The instant habit of attachment to familiar paralyzes the opportunity for better options to reveal themselves and create the constant possibilities to be at the forefront of endemic and inevitable changes,” Stasiulionytė claims.
7. Reducing personal biases
Experienced support helps eliminate personal biases that stand on the way to greatness. “I am the one who makes the most mistakes in the organisation – this is why I have a separate department that helps me fix those failures,” openly admitted Dr Peter Gorlich, Managing Director at TSG 1899 Hoffenheim, the premier league football club.
According to the researcher Tim Rees, ongoing support of friends and family may be one of the crucial elements for an athlete’s performance. For his study, Rees used a sample of high-level professional golf players and found that stressors were associated with worse performance, whereas athletes that received social support performed significantly better.
“As we aim to achieve the highest goals in sports, we encounter bigger challenges than ever before. The fear of failing and the consequences of bad decisions dramatically increase with every step and the support of the right people becomes essential,” continues Stasiulionytė.
“We all need support. We need good mentors, who are successful in their careers and have a good heart. What you can learn in sports is for life,” shared Silke Mayer, President of Dirk Nowitzki Foundation that has recently launched a program to support youth coaches.