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This article was originally published on sportbusiness.com. It is written by Deakin University’s Jonathan Robertson and Swinburne University’s Adam Karg.
Two leading Australian sports industry academics distil five key challenges for sports industry leaders, identified at last month’s SportNXT conference in Melbourne.
The sports industry is changing. Fast. From blockchain to Black Lives Matter, sports executives must pay heed to an ever-increasing number of trends and new forces affecting the industry. At the same time, the fundamentals of sport remain the same. Successful leaders must have their eyes on core business – creating unmatched experiences for sports consumers – while confronting a new wave of product and organisational considerations
These were the key messages from more than 800 sports leaders that gathered at the SportNXT conference in Melbourne last month, addressing the big question: What’s next for the sports industry?
From Adam Silver to Megan Rapinoe, Lord Sebastian Coe to Stefano Domenicali, some of the sharpest minds in sport assembled to tackle the big issues facing the industry, spanning broadcasting, social change, data, technology, esports, climate change, fan engagement, and sports diplomacy. After listening to and talking with this stellar line-up, we distilled five key questions sports executives need to be asking themselves and their organisations:
The core business of sports organisations has evolved to focus on seamless, unique and affordable sports experiences in stadiums and in the home. Consumers associate great experiences with value. The battle for their wallets and eyeballs is fierce, and sports companies are employing new tactics and strategies to win.
Key trends include: the power of storytelling in customer acquisition, for example the impact of Netflix’s Drive to Survive on Formula 1 audiences; and ‘driveway-to-driveway’ event delivery, where event organisers are using new technology to improve fan experiences as they commute to and enter major events. Top-tier sports are redesigning stadia to enable fans to socialise and investing in storytelling to create movie-like viewership experiences at home.
The best sport experiences are only going to get better. Second-tier sports face challenges to retain consumer attention and spending when benchmarked against the top-end experiences, and there is a risk of a widening gap between the haves and have-nots. Nevertheless, building memorable consumer experiences should be at the forefront of every leader’s mind
While revenue streams are diversifying, the relationship between sport and media continues to be the central engine for sport organisations. The rights distribution business continues to be impacted by fragmentation of sport content providers and platforms. These now offer consumers greater choice and features, leveraging second screens, commerce integrations and gamification.
There is an acute need to consider the differing roles of sports organisations and media companies, when it comes to being the ‘custodians of fandom’. When knowing customers and owning customer relationships is critical for all businesses, what are the implications of where and how sport fans spend time consuming sport-related content? Is it sport organisations themselves, media, or both, who should own, program and develop content for audiences?
The pandemic changed the way sports and media organisations work and collaborate. Some have successfully partnered more closely to grow audiences and evolve sports media delivery. Collaboration can improve experiences, and create new sports media features and points of interaction.
Creating value via the application of new technology is arguably the biggest opportunity for sport. Blockchain and NFTs, while still in early adoption phases, have potential applications in stadiums, ticketing and consumer products. Gaming, esports, Web 3.0 and the metaverse also present emerging prospects.
In adopting new technologies, sports organisations must look beyond immediate revenue and consider a wider range of KPIs.
Different technologies can reach different groups of fans. Interactive experiences and media-based NFTs are being used to target highly-committed existing audiences. Gaming and esports are being used in attempts to grow fan bases.
As innovation outpaces regulation, issues like data governance, and retaining safe and inclusive spaces for stakeholders, become critical.
From BLM to #metoo, climate change to transgender inclusion, sport exists at the intersection of rapidly-changing social forces. Approaches to social changes, inclusion and equity will not be driven by yesterday’s administrators, but by the expectations of the next generation of fans. In attracting future lifetime consumers, administrators and marketers need to listen, empathise and act to ensure that rhetoric is transformed into authentic and meaningful change.
Interpersonal skills remain a premium commodity to lead contemporary organisations in times of increasing complexity and uncertainty. More than ever, leaders must lead with purpose. Several leaders noted that society is more frequently turning to sport to provide social leadership as other institutions lose relevance, while the visibility of athletes and sports organisations spreads globally. In societies that are becoming increasingly polarised, leaders must be able to: empathise and authentically engage with diverse stakeholders, build relationships based on trust and respect, and develop welcoming organisational cultures.
Maximising recovery after a turbulent and uncertain 24 months requires positioning sports organisations as being innovative, and building a reputation of being receptive to new thinking and ideas around experiences, technology and the social outcomes of sport. Alongside focusing on core business and revenue, sports organisations must be open to disrupting their own businesses, and be leaders in the creation of economic and social value.
At the same time, approaches to customer and commercial growth need balanced and considered decision-making born within diverse organisations.
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