Pillars of Growth & Major Trends in the Sports Industry from 2017–2027
What was it like being a sports fan in 2007?
The short answer…a lot different than it is today.
The global sports industry was estimated to generate $50bn of revenue in 2007, compared with a projected $90bn in 2017. HD Broadcasts of live sporting events, social media and of course fantasy sports all play a hand in the development of the sports industry over the past 10 years.
That got me thinking…what will be the drivers of the sports industry be over the next decade.
Fast forward to 2027 and what I believe to be the six pillars of growth for sports.
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Virtual Reality (VR)
Unless you’ve been hiding under a rock, you’ve heard tons of stories about VR’s expansion into the sports industry. And for good reason, the applications are endless.
Imagine watching the Super Bowl with a view from the sidelines, all from the comfort of your couch. This is one of the bold promises of VR likely to come to fruition by 2027.
Other areas within sports that VR will revolutionize: training of players, injury prevention and rehabilitation, eSports gaming & competitions, sponsorship opportunities and interactive fan experiences.eSports and gaming in general deserve a section of their own, due to the enormous potential of their markets.
The emergence of the Drone Racing League and major areans selling out in minutes for eSports competitions prove that there is demand for competitive competitions in the electronic gaming space.
VR was pegged as a $1.8 billion dollar industry in 2016, with only $300 million of that revenue coming from software and services. Take a look at the projections below. As headsets become more widely used, expect a mutually beneficial relationship between sports and VR development.
Customized Channel Packages
Traditional cable providers are one of the ripest industries for disruption. The long-standing model of cable networks like ESPN throwing down billions of dollars for the rights to NFL and NBA national broadcasts, has already seen diminishing returns.
Rather than paying $200 a month for every channel, consumers will be offered customized packages, allowing sports fans the option to pay only for the channels they want to watch. I’m scratching at the bit to be able to dispose of my FIOS cable boxes but live sports has been holding me back for so long.
As consumers are provided with more choices, the compounding effect of cord-cutters (especially among a growing proportion of Millennials and Generation Z’ers) will force cable providers to become more competitive in their pricing structures.
The trickle down effect of such a changing business model will have substantial impact on the economic incentives to owners, teams, professional athletes and ultimately fans.
Soccer in the US
Like it or not NFL fans, soccer is here to stay. Unlike previous generations, the tolerance for long breaks in action for commercial interruptions and timeouts is a lot shorter in today’s generation.
While cable-cutting will have a profound impact on the business model of professional sports like the MLB and NBA, soccer is positioned well to capitalize on this change.Up every year since 2009, there are now 16 million Americans who regularly play soccer.
The combination of a growing pipeline of home-bred talent, along with a viewable product that will transition well to the sports broadcasting industry moving forward, means that soccer will cement its status as a major sport in the US by 2027.
Marijuana
America’s opioid crisis has shed light on one of the darkside’s of being a professional athlete. The process of recovering from injuries has been accompanied with the prescription of highly addictive painkillers, resulting in players whose lives (and their families lives) being impacted well beyond the playing field.
71% of NFL players prescribed opioids admitted to misusing them. Let that sink in for a minute.
Advances in the medical space will shed light on the benefits of legalized marijuana, especially in the treatment of pain during a player’s recovery process. Expect the use of legalized marijuana to be a sticking point in the NFL Player’s Union’s case during 2021 CBA negotiations.
As individual states in the US continue to legalize medicinal marijuana, it seems more and more likely that we won’t be seeing NFL players suspended for marijuana use come 2027.
Professional Franchise Ownership Model
The current model of professional franchise ownership has seen little change since the advent of professional sports.
While owners have seen their franchises balloon in value each and every year, pro sports teams have become mammoth enterprises that stand to benefit from becoming publicly traded corporations.
With the advancement of financial technology, expect many professional franchises to sell interests directly to sports fans. I wrote about how equity crowdfunding and blockchain technology will change the ownership model of professional sports here: Democratizing Professional Sports: Turning Fans Into Owners.
Player’s Brands
Professional athletes have become true icons and rank among the most powerful and influential figures on the face of the earth.By turning themselves into a corporate entity, professional athletes can further their platforms and minimize their risk factors by selling ownership interests in their brands directly to fans.
Much like the impact on team ownership, I wrote about how players can maximize their interests here: How Fans Can Invest in Athletes: The Ultimate Fantasy Sport.
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Tom is a co-founder of Global Sports Inc., a crowdfunding platform that connects sports fans with sports products, charities and organizations seeking to raise capital. An avid New York Yankees & Giants fan since birth, Tom is interested in all things sports, finance and cryptocurrency.