2024 Sports Industry Outlook

In this global golden age of sports, 2023 is expected to bring organizations and athletes more chances than ever to deeply connect with their fans. This includes engaging through some important international events, such as the Cricket World Cup (India), Rugby World Cup (France), and the FIFA Women’s World Cup (Australia and New Zealand). This year will also see new media deals and more innovations from streaming providers as their influence grows.

In a challenging economic environment, sports will likely still be seen as an attractive option for investment, with investors endeavoring to take a responsible and sustainable approach. Technology will continue to infuse every aspect of sports, empowering athletes and creating a more immersive experience for fans at live events and at home. In general, 2023 will be about making the most of these near-term opportunities while managing associated risks with the longer term in mind.

Our 2023 outlook in brief:

• The blending of physical and digital experiences will move from proving concepts to creating new functionality and better experiences.
• With the possibility of new sports betting restrictions emerging around the world, there will be a greater emphasis on risk management and responsibility as the industry seeks more growth and profitability.
• Interest and involvement by private equity investment in sports will continue to grow. How will sports organizations respond to new types of investors and their expectations? How will investors act during a potential economic downturn?
• After a breakthrough year, women’s professional sports are in a strong position to further advance in 2023, but additional work is necessary to improve awareness, expand sponsorship, and grow media rights valuations and investment.

PRIVATE EQUITY & SPORTS, Teaming for long term - has taken an increasingly active role in sports over the past few years—with firms establishing funds and new entities being created to invest solely in sports. They are buying shares of teams, leagues, and broadcast rights. Nearly US$60 billion in private equity was invested in sports in 2021 and more than US$30 billion in 2022 through August. In Europe, the rules are fairly relaxed for PE involvement. In the United States, the NFL doesn’t currently allow PE firms to invest, but the NBA, MLB, NHL, and MLS have encouraged it, with guardrails. These can include setting minimum investment levels, controlling the individual and total percentages that PE firms and other institutional investors can own, and limiting the number of teams a single firm can invest in.

PE’s entrenchment in the sporting landscape brings potential issues to watch out for along with new areas of opportunity. Some of these deals have sparked pushback. Fans may worry that investors could put profit above winning, and athletes may ask whether investors have their best interests at heart. If economic times get tough for teams and leagues, will investors try to exert more control to protect their investment—to the detriment of competitiveness? There are also risks tying investment to on-field performance.

Women’s Professional Sports had a record-breaking year in 2022. The levels of interest, attendance, viewership, media coverage, and investment have never been higher. Attendance records were broken around the world. And women’s professional sports are positioned to advance even further in 2023.

THE WIN FOR WOMEN PROFESSIONAL SPORTS, yet despite all this laudable momentum, women’s professional sports still get significantly less attention, investment, and sponsorship than men’s sports do. Over the next few years, some critical areas can help catalyze further growth. The media rights deal for the NWSL 2023 and WNBA 2025 are expiring soon. Both leagues are looking for significant increases and will look to a combination of linear and streaming providers to maximize their reach and discoverability. These deals should provide proper valuations, favorable broadcasting windows, strong production, and substantial marketing to help drive awareness. WPL 2023 in India have a great start already with a magnificent auction. Viacom 18 bags a big bid of WPL media rights in 951 Crores INR.

Women’s leagues have many other opportunities beyond media rights to drive future success. Although innovative approaches are being taken to sponsor women’s sports, mainstream awareness of sponsors is still low. Finally, there are more female investors and former athletes getting involved in ownership. The result could be a chance to do things differently with athlete representation, fan and community engagement, and investment.

2024

1. Changing Economics of Sports: The overall economics of the sports industry is expected to remain strong in 2024. However, the commercial model, which has been undergoing significant shifts in recent years, will likely continue to transform across both traditional and emerging revenue streams.
2. Generative Artificial Intelligence (AI): Like data analytics and machine learning before it, generative AI will likely permeate many aspects of sports. Over the next 12–18 months, we expect innovative applications involving content generation, live sports coverage, player evaluation, sports betting, fan engagement, and back-office operations.
3. Future of Mega-Events: The Paris Games may serve as a proof point for the International Olympic Committee’s “New Norm” and illustrate a new model for the future. Potential host countries and organizing committees around the world will be closely watching.
4. Investments in Fan Data: Sports organizations and leagues are likely to put significant effort and investment into aggregating and managing their own extensive fan data programs, building proprietary fan databases.
5. Potential “New Normal” in College Athletics: From countless conference changes to record-breaking name, image, and likeness (NIL) deals, the past few years in college athletics have been full of change. Will 2024 be the year we start to see a “new normal” emerge?

This transformative period in the global sports industry will be marked by technological advancements, shifts in business models, and the influence of individual athletes and fans on how sports are consumed and monetized.

Let's See! :) ????

-Aditya Pratap.