At the beginning of 2022, AST analyzed and suggested several key transformational trends that we believed would accelerate in the sports industry. As the end of the year approaches, we would like to evaluate our predictions and highlight some of the most significant developments in the sports industry. in this article.
Women’s sports are taking off
Women’s sports really took off this year in several key areas including sponsorship, investment, headlines, fan engagement, and viewership.
Women’s professional sports sponsorship deals recorded a 20% YOY increase in 2022 according to SportsPro; with Alex Morgan overtaking Serena Williams as the most endorsed female athlete. There is also a 146% YOY increase in unbundled sponsorship investment in women’s sports (UEFA, FIFA, World Rugby) compared to a 27% rise in 2020, according to Nielsen’s 2022 Global Sports Marketing Report. Hologic also signed the largest sponsorship in WTA history, reported to be well above US$15M annually, as per the NYT.
There’s a significant rise in the popularity of Women’s football. FC Barcelona Femení set a world attendance record for women’s sports when 91,000 fans attended their UEFA women’s Champions League semi-final vs Wolfsburg in March according to Sports Business Journal.
The Women’s FA Cup in the UK also set an attendance record with just under 50,000 at the final between Chelsea and Manchester City in May. The tournament is also expected to deliver US$65 million in economic activity to the nine host cities across the UK and it welcomed over 96,000 international visitors according to a report by EY.
While in the US, Angel City FC of the NWSL, a team with many high-profile investors, attracted US$11 million in sponsorships this season. This is well above some MLS teams and close to what a few MLB & NHL teams make.
Besides football, we are also seeing growth across all women’s professional sports such as golf, tennis, and cricket. For example, the BCCI has just set a base price of US$50m per cricket franchisee for the upcoming Women’s IPL in India, and expects much more. This is almost 3x the reported expansion fee for a WNBA team!
Women’s sports have come a long way during 2022 and we are finally seeing the silver lining. This is just the beginning, with growing investment and visibility in the space, rights-holders, brands, and investors should capitalize on the momentum to secure lucrative returns.
More work needs to be done in sustainability
ESG ranks high on the agenda for every stakeholder in the sports industry including federations, sports leagues, teams, venues, event organizers and manufacturers. More of them have started incorporating sustainability policies and practices into their business strategies. Though it has been steadily growing in the past year, there is a long way to go, especially in Asia.
AST’s Founding Partner Loron Orris led an “ESG & Purpose Panel” in September at All That Matters and interviewed Erica Kerner@SailGP and Sven Schaefer@UBS Business Solutions AG.
UBS has launched a “Sustainability Playbook” to align sponsorship activation against special ESG goals. SailGP is a pioneer in the field, and one of the most sustainable sports leagues in the world highlights their great commitment to staying climate positive.
In 2021, they launched the “Impact League” – a world-first initiative to make sustainability essential to the fabric of sport, and to accelerate the transition to clean energy. It has two leaderboards: one measures a teams’ sporting performance during the event, while the other measures the level of sustainability. SailGP’s innovative model could inspire other sports leagues and rights holders to follow, while UBS’s playbook highlights the responsibility of all their partners to work together as they develop and execute their ESG policies.
The UN previously proposed the “UN Sports for Climate Action Framework” that requires sports bodies to:
• Achieve a 50% reduction in overall CO2 emissions by 2030
• Achieve net zero by 2040
• Submit annual reports to the UN on progress to achieve these goals
The IOC has already committed to these targets, and the Paris 2024 Olympic committee demonstrates their ambition to host the most sustainable games of all time.
Sports play a significant role in tackling climate change and there are many areas that could be better managed to reduce the overall carbon footprint including construction materials for stadiums, sustainability of sporting infrastructure, the supply chain for sporting goods and equipment, and the planning and operations of sporting events.
Sports fans realize the value of the Metaverse
Last year, the Metaverse was still a relatively new idea to many sports fans, but we’ve seen great acceleration in 2022 with sports leagues and brands preparing to make a splash in the Metaverse.
A recent study from Momentum Worldwide indicated that 81% of surveyed sports fans would pay to watch a real-world sporting event in the metaverse, while 85% of sports fans would pay to access exclusive live experiences sponsored by brands in the metaverse that feature their favorite athletes. This implies a massive opportunity for the sports industry to leverage the metaverse to build community, create unique money can’t buy interactive fan experiences, engage more fans and help fans monetize their online activities. The NFL, MLB, Wimbledon, and FIFA have all launched virtual worlds over the past year where users can access digital merchandise for their avatars.
Apart from Sports IP owners, corporations continue to piggyback on sports to engage customers. Sony, the ‘Virtual Fan Engagement Partner of Manchester City’; recently acquired Beyond Sports, an AI-based data analysis and visualization company that offers a new way of experiencing sports.
There are also many other developments in sports that accelerated this year including immersive sports that was at the intersection of physical and digital sports experiences. Please read our previous article here.
Sports is being democratized under Web3.0
The potential of blockchain in the sports world is transformative with the sports industry paving the way for the blockchain industry to reach a broader audience.
DAOs (Decentralised Autonomous Organisations) are also becoming more common in the sports industry which we believe will continue to develop. Some key examples include:
• SailGP partnered with NEAR to enable fans to participate in a DAO-owned SailGP team;
• MotorDAO will offer motorsport fans and online communities the chance to finance teams, drivers, and events using non-fungible token (NFT) based membership;
• CortADO, W Series’ first internet-based team allowing online community members to part-own a motor racing team; and
• LinksDAO raised US$10.4 million in 48 hours selling NFTs to build “a global community of golf enthusiasts in web3 reimagining the modern golf and leisure club.”
Sports and esports organizations are playing an increasingly important role in growing the Web3 ecosystem. “As the world decentralizes, blockchain is creating more opportunities for sports entities to grow and monetize. There’s no reason to think that the sports industry cannot leverage its IP into new Web3-focused product categories that generate tens of billions of dollars of incremental revenue. I also see sports continuing to be a key focus of the company’s investment/business growth strategy in the future”. Michael Thomas, Business Director Sport at Animoca Brands mentioned at the panel hosted by AST’s Founding Partner Loron Orris at the Stadia Ventures’ Web3.0 Innovation Summit and you can watch the panel here:
Driving fan engagement in sports by leveraging NFTs and gamification.
It is obvious that the sports industry is moving towards a more ESG and purpose-driven, environmentally focussed and digitized Web3 world which we highlighted in our predictions early this year. The key to capitalize on these trends as they continue to accelerate in the coming year is to understand how they will impact the different parts of the sports ecosystems in different markets and leverage key insights and relationships to create the right strategies.
Reach out to AST if you would like to learn more about how these fast evolving trends will impact and create great opportunities for your business. Please also stay tuned for our 2023 Trends Forecast!