Creating value through investment in sports participation

On Sunday I read with excitement Roger Mitchell 's latest article. In it he discussed an epiphany he had about the future of sport and how Gen Z can be engaged for the long term.

Using the transformation of the ‘Festival of the Italian Song’ in Sanremo as the backdrop for his article, Roger asked:

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“Rather than sport spending bucket loads of money (on marketing, tech, and content), to distract?casual?fans from everything else they do on their screens, wouldn’t it be better to invest in the one thing we know always fosters fan passion for a lifetime? By getting them to actually participate in a sport and feel direct connection/ownership”.?

Halleluiah!! At last, a sports business heavyweight has seen the light!

Over the last few years (Roger estimates 10) the sports business has increasingly focused on how the latest tech evolution – big data, web 3, NFT, AI etc etc – is going to be the panacea for engaging new fans. Participation has fallen further and further down the industry’s agenda – for the big agencies, sponsors and investors. I’m not for one second trying to say that the potential of new tech isn’t exciting but I believe that there is huge untapped potential in participation that doesn't get enough attention.

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Even if the participant is merely a ‘subset of the fan’ as much of the industry seems to believe then surely it is a more valuable subset than the casual fan and that warrants a greater investment of time and resources to explore how that value can be realised?

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A person who has participated in a sport is going to understand a sport better, or at least in a different way, than someone who hasn’t played. They will understand the nuances of a game which will make their engagement ‘stickier’? But participants and participation have so much more potential value to be realised. But creating value cannot be done overnight it requires strategy, investment and as Roger highlights, new types of leaders.

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Value of investment in participation for Governing bodies and rights holders

I think that the best recent example of what Roger is referring to in his article (the participant as a route to life time value to rightsholders) is the growth of women’s football by the FA. Last year it was announced that the number of new womens and girls teams registered with the FA had jumped by 1500 in the year since the Lionesses’ Euro triumph in July 2022.

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Firstly, I hope that this puts to bed once and for all the belief that elite sport cannot inspire an increase in participation. Of course it can, but not on its own (the transformation of San Remo “wasn’t done by osmosis, Rather by top class proactive artistic direction”). The rise and rise of women’s football in England has been the result of brilliant strategy and execution by Mark Bullingham , Marzena Bogdanowicz , Kelly Simmons, Baroness Campbell and the whole team at The FA.

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The FA's strategy would have required input and buy in from every department - to first secure the hosting rights for the tournament, then ensure that the Lionesses were able to perform at their full potential and that the grassroots game was able to provide the supply for the massive demand in participation that would be generated. It also involved getting buy in from Nike and other FA partners and for the Lionesses to see themselves as the leading protagonists for a “change in society and women’s sport”. They were motivated by a bigger purpose than winning the Euros – they were the biggest advocates of the strategy to create real and lasting change. Who can forget Captain, Leah Williamson’s passionate on pitch interview immediately after the greatest achievement of her life? Amid the chaotic celebrations of England winning a first major trophy since 1966 she talked about the change that she hoped her, and her team-mate's triumph would bring “This is the start of the journey”. She was completely bought into the bigger purpose and strategy, a leader for a whole movement not just a team.

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In December 2023 the Lionesses played The Netherlands at Wembley in front of 70,000+ fans. Many of which were attended with their new football teams from their schools and clubs. For many their first experience of the magic of Wembley - an experience no-one forgets (England v Germany schoolboys 1979!) - and instead of it being to cheer on Harry Styles or Taylor Swift they got to see their Lioness football idols - potentially creating fans, and FA customers, for life.

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The FA have not only created new participation and new lifelong fans, but in the process they have also increased the rights they have available, the value of those rights and created more opportunities to sell out Wembley.

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Value of investment in participation for Brands

Of course, Nike had identified the potential of increasing women’s participation in sport years before. At Limelight we helped Nike create participation touch points with their audience for more than 20 years. Our first event, Nike Park, Wembley in 2000 was packed with tens of thousands of ‘football crazy kids’ - virtually all boys. The first Run London event the following year, despite having healthy female participation compared to other races at the time, was still skewed towards male participants.

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However, we witnessed first-hand the change of global strategy by Nike to focus on female participation. In 2013 we created another huge sell-out running event in London - We Own the Night. The difference being that the event was exclusively for women and alongside athlete legend Paula Radcliffe, Nike engaged Ellie Goulding, a keen runner, to front the event.

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The Nike Training Club (NTC) experiential activity at that time was also dominated by women and in 2019 our football involvement with Nike came full circle when we hosted The Hackney Marshes Takeover – a football event exclusively for women and girls.

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Raising the profile of and creating opportunities that create parity for women’s sport is of course vitally important (and so much more needs to be done). For a sports brand it is also great business - it has the effect of nearly doubling your potential marketplace. The significant investment by Nike has certainly reaped huge rewards whilst also creating a lot of positive change.

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Sky were another Limelight client who understood the value of participation and purpose. As everyone knows their huge investment into cycling through Team Sky and British Cycling’s elite performance was a catalyst to incredible success at the Grand Tours and on the track. But their cycling strategy was also underpinned by their commitment to get 1,000,000 people onto (or back onto) their bikes. Limelight helped them through the creation of the Sky Ride programme of events which created opportunities for people and families to participate in a big event, meet their heroes and engage with grassroots organisations and programmes who supported cycling year-round.

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In 2013 we commissioned some research by SMG YouGov. It found that 66% of the general public that were aware of the Skyride event programme were favourable towards Sky compared to 57% who knew only about the investment in Team Sky and British Cycling’s elite performance programme.

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Value creation for investors

Attracting capital to drive participation is also a significant challenge but with many governing body’s hands tied by a chronic lack of funding it may be the commercial sector that has to grow participation in the future.

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However, participation is viewed by many as not scaleable when compared to what digital can achieve and expensive when viewed through outdated, short term ‘cost per head’ models. In fact, when done properly with planning that optimises all of an organisation’s assets and resources as part of a long-term strategy participation is very cost effective.

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In Roger’s article he references the example of how the Professional Triathletes Organisation (PTO) led by Sam Renouf are linking participation to elite sport through their new T100 series. This is being made possible through significant investment by Sir Michael Moritz. Whilst initially it won’t create NEW participation it will undoubtedly increase the PTO’s market share of participation from organisations like Ironman and the long-term value and sustainability of the PTO will increase as a result.

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Perhaps the best current example of value creation through investment in participation is the Hyrox phenomenon. Fitness events (CrossFit, National Fitness Games, Turf Games) have been around for a while, but Hyrox has used great insight to create a mass participation event that feels more accessible to a wider audience. The event format is ingenious in that it can be replicated at major indoor venues in the greatest cities in the world, takes away the issue of weather and creates a ready-made arena audience for the participants. The investment by InFront in the brand and the rapid global roll-out must be huge (events rarely make a profit in the first couple of years and they have a lot of events) but the impact has been incredible. Hyrox’s share of the fitness event market will be dominant and you can already see the multitude of ways that the brand will be commercialised through gym link ups, training plans, gym wear and many other spin offs. The opportunities are endless.

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In summary, I would urge Roger to continue to tell anyone that will listen about his epiphany and I would ask the sports business to reset its thinking about the role that participation can play in creating value for all of the key protagonists.

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I chose to focus on the participation sector of the sports business a very long time ago because it gave me my ‘purpose’ long before it was in all of the management books that you had to have one, but I fundamentally believe that it also represents a significant opportunity to create huge long-term value for those who are prepared to invest in it in a committed and strategic way.

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