7 Key Takeaways from the Future of Sports Report 2024

I have summarized Deloitte's Future of sport report so you don't have to!

Original link: https://www.deloitte.com/uk/en/services/financial-advisory/research/the-future-of-sport.html

Summary

Four major forces shaping the future of sports:

• Evolving Global Market: This encompasses the changing dynamics of the sports industry on a global scale. It includes shifts in how sports are financed, marketed, and consumed worldwide. The report highlights increasing competition between traditional sports and new entrants, as well as the growing influence of global investors and media companies.
• Pace of Digital: This force focuses on the rapid technological advancements transforming how sports are played, watched, and managed. It covers everything from AI-driven analytics in performance tracking to immersive fan experiences through virtual and augmented reality.
• Next Generation: This addresses the changing preferences and behaviors of younger audiences, particularly Gen Z and Gen Alpha. It looks at how these groups consume sports content differently, their expectations for engagement, and their values that sports organizations need to align with.
• Trust: Newly added this year, this force emphasizes the growing importance of integrity, transparency, and social responsibility in sports. It covers issues like governance, athlete welfare, environmental sustainability, and community impact.

Evolving Global Market

• Intensified investment: There's a surge in capital flowing into sports from diverse sources. This includes traditional investors, private equity firms, sovereign wealth funds, and even tech companies. For example, the report mentions the record-breaking $6 billion acquisition of the Washington Commanders.
• Accelerating polarization: The gap between top-tier leagues/teams and the rest is widening. Elite properties like the NFL, NBA, and Premier League are securing increasingly lucrative media rights deals, allowing them to invest more in talent and infrastructure, further cementing their dominance.
• Radical reform: Sports are reimagining their competition structures to maximize value. This includes expanding existing tournaments (like the UEFA Champions League), creating new competitions (like LIV Golf), or exploring novel formats to attract younger audiences.

Pace of Digital

• AI mainstream: Artificial Intelligence is being integrated across various aspects of sports. This ranges from tactical analysis in coaching (like the TacticAI tool developed by Google for Liverpool FC) to personalized content recommendations for fans and automated highlight generation.
• In-house incubators: Major sports organizations are setting up their own innovation labs to foster tech startups. Examples include NBA Launchpad and MLS Innovation Lab, which provide startups with access to real-world testing environments and potential investment.
• Tech partnerships: Sports entities are increasingly collaborating with tech firms to enhance their offerings. For instance, Formula 1's partnership with Globant focuses on improving digital fan experiences, particularly in critical areas like the pit wall system.
• Data investment: There's a growing focus on building robust data infrastructures. This allows sports organizations to gather and utilize first-party data more effectively, enabling personalized fan experiences and more targeted partner activations.

Next Generation

• Content evolution: There's a shift towards content formats that appeal to younger audiences. This includes short-form vertical videos, behind-the-scenes content, and live streaming. The report mentions examples like the T20 Cricket World Cup broadcasting matches in vertical format for mobile viewers.
• Direct-to-consumer: Sports organizations are developing their own platforms to engage fans directly. This allows for better data collection and more personalized experiences. The NBA's League Pass app, which saw a 50% increase in subscribers, is cited as a successful example.
• Entertainment collaboration: Sports are increasingly partnering with other entertainment sectors. This includes collaborations with music artists, fashion brands, and gaming companies. Examples include FC Barcelona's partnership with Spotify and the IOC announcing the first Esports Olympics.

Trust

• Stakeholder activism: Athletes, fans, and partners are increasingly vocal about social and environmental issues. The report mentions examples like Kylian Mbappé taking public political positions and athletes raising awareness about climate change.
• Increased scrutiny: There's growing public scrutiny over organizational behaviors, leading to reviews into issues like discrimination and sexism. This has resulted in stronger regulations, such as the UK government's bill to establish an Independent Football Regulator.
• Sporting integrity: As financial stakes in sports grow, there's increased pressure to uphold integrity. This includes the use of technology for officiating, player welfare monitoring, and anti-doping measures.
• Governing bodies' relevance: Traditional sports governing bodies are being challenged to prove their relevance. They're responding by bringing in new capabilities and refocusing their activities to maintain their importance in the sports ecosystem.

Key Trends

• Optimism: 55% of leaders surveyed feel more optimistic about future growth than last year, indicating a positive outlook for the industry despite challenges.
• Digital revenue: 67% expect digital products to be the fastest-growing revenue stream, highlighting the importance of digital transformation in sports.
• Women's sport: 65% see women's sport as the greatest overall growth opportunity, reflecting increasing interest and investment in women's leagues and events.
• AI impact: 85% expect AI to be one of the most impactful tech trends, underscoring the potential for AI to revolutionize various aspects of sports.

Future Expectations

• Regulatory oversight: The report anticipates increased focus on social, environmental, and financial responsibility in sports, with stronger frameworks and targets driving improved standards.
• Governance evolution: New models are expected to emerge, balancing the need for commercial decision-making with stakeholder interests.
• Fan ownership: There's an expectation of growth in fan ownership models, potentially underpinned by blockchain technology, giving fans more say in how their favorite teams are run.
• Local impact: Sports organizations are expected to focus more on delivering tangible benefits to their local communities, using sport as a catalyst for social and economic development.

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