Jack Stiuso

Anna Gnudi
Geoff Miller

Innovating outside the lines

View from the inside

Competition. In sports, it’s defined inside the lines and measured by the records. For sports brands, the competitive boundaries are increasingly fluid, expanding to new categories and evolving over time. It’s not about competing within an industry. It’s about competing for customers’ time and money. With customers taking center stage for this competition, it means they set the rules of play. 

Play is how we connect — and disconnect. How we let loose in a stadium shaking with energy. And how we zone out on a Sunday afternoon to the tune of whistles and color commentary. Customers in this arena desire the freedom to switch on and switch off as they need. To play the way they want to play. 

The freedom of play takes many forms. Freedom to create, to discover, to express ourselves. It’s a multi-faceted desire, met today by a wealth of new forms of content. With more outlets to play their own way, customers are not the same captive audience they used to be for sports brands. The 2021 Super Bowl hit a fifteen-year low in terms of television viewers. NFL ratings have experienced 12.5% decline since the 2014 season1. In a Morning Consult survey, 53% Gen Zers considered themselves sports fans, compared with 63% of U.S. adults and 69% of millennials2. The line between distraction and disinterest is blurry. Both can be remedied, but the latter requires a stronger medicine. For sports brands, staying responsive and engaging amidst the noise is more than just a way to stop the bleeding, it’s an opportunity to find fans and revenue in new places. 

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Radical technological change is both the cause of distraction, and a solution. Ellie Norman, the CMO of F1, told Interbrand, “One of the true benefits of digital is actually the ability to meet audiences on their level, in a way that works for them.” The F1 Virtual Grand Prix and their Drive to Survive on Netflix exemplify the F1 brand extending across the arena, into gaming and the arts, to expand their reach and acquire new fans. You never needed season tickets to be a die hard. Now, you don’t even need to watch live. Race day, matchday, or gameday — rituals are changing. Brands need to look beyond their marquee days to a more wholistic customer experience. More than 60% of fans say a great “year-round experience” would make them more likely to be more engaged in the coming season. 55% say it would make them more likely to purchase a ticket in the future3. Brands who rebalance their investment in different fan experiences now will be better equipped for engagement and retention in the future.  

Reliance on proximity is fading. Not just for the fans, but for the competitors as well. Accentuated by COVID, eSports has ridden a wave of growth that highlights the dotted line between gaming and sports. The industry is growing rapidly, from $691.6m in 2019 to an estimated $1.86b in 20264, driven by an audience that is young, hyper-connected, and profoundly global. 35% of Gen Zers identify as fans of eSports compared to 19% of all adults5. Brands like NASCAR are pushing into eSports to find new customers on the margins. As CMO Jill Gregory explained, the NASCAR partnership with FOX to broadcast its virtual eNASCAR iRacing Pro Invitational Series resulted in the most-watched eSports event in TV history. Moving forward, brands would be wise to ensure that their investment in eSports is not only a short-term response to COVID-19, but rather a core component of their engagement strategy.  

Necessity is the mother of invention, and in sport today, it could be the bringer of opportunity. When COVID turned the floodlights off in stadiums around the world, leagues scrambled for ways to return to play. In June of 2020, the National Women’s Soccer League pioneered the return of team sports in the United States through its NWSL Challenge Cup. In returning first, the league was able to draw its highest-ever TV ratings, and command interest from a wider swath of sponsors and partners. Perhaps most critically for its future growth, the Challenge Cup highlighted the institutional barriers to success impacting women’s sports, notably in media coverage. In 2010, a University of Southern California study found that 96% of sports coverage was devoted to men’s sports6

In 2018, female tennis players received 41% less coverage during the Grand Slams, despite two of the four Grand Slams having higher viewership for the women’s final7. A 2020 study from the International Journal of Environmental Research and Public Health found that the top media outlets in Spain devoted 96% of Twitter coverage to sportsmen over sportswomen8. Yet, an international Nielsen study found 66% of the population, and 84% of sports fans to be interested in women’s sports9. In fact, Deloitte estimates that women’s sports will cross the billion dollar revenue mark in the coming years10. A call to action for brands — don’t mistake disregard for disinterest. Media companies, leagues, and teams should look to women’s sports as a way to rejuvenate engagement and wake up a new band of customers. 

Games are getting gamified. The instant gratification, serotonin-spiking style of gaming continues to influence the sporting landscape. Zach Leonsis, SVP of strategic initiatives at Monumental Sports & Entertainment (who own the Washington Capitals, Washington Mystiques, Washington Wizards, and Team Liquid), said that sports properties “need to make their games engaging by fostering gamification, daily fantasy, free-to-play games and, ultimately, sports betting.” The Las Vegas Raiders, among other U.S. sports teams, are leaning into gamification with their new Allegiant Stadium, which includes an MGM club where fans can engage in mobile betting. The partnership between the Raiders and MGM extends beyond the stadium, with MGM Resorts owning the rights to exclusive fan experiences at their locations11. Product innovation and partnership strategy are both ways that brands can boost their extensibility and reach fans in new places. Customers are hungry for different styles of engagement with the sports brands they love, and sports betting (along with its $13b in U.S. regulated spend in 201912) is just another way brands can be creative in rethinking their engagement with their customers. 

We all have our reasons to get lost in the action. To feel the intensity from our favorite driver’s perspective. To enjoy a sport we rarely get to see. To get in on the game with the click of a button. For brands, reach and revenue await for those who give customers the freedom to play the way they want to play.