5 Bold Predictions About the Future of Sports Business
Times are a-changin’.
New trends fueled by technological advances are pushing long-standing establishments to the brink, and the sports industry is no exception.
Here are a few bold predictions about the future of sports business:
1. The NBA will eventually render college basketball obsolete.
NBA Commissioner Adam Silver has already hinted several times that the league intends to rescind the one-and-done rule, or at least significantly modify it.
Once this happens — as soon as Summer 2018, in my estimation — look for the world’s top amateur basketball players to head straight into the NBA, or the NBA’s development league, the G League, where they can:
- Make decent money for a teenager playing professional basketball
- Further develop their skills without NCAA-imposed official practice limits
- Better acclimate themselves to the long and taxing NBA season, and most importantly
- Monetize their athlete brands through marketing deals and the eight digital profit centers, without any restrictions
With more talent-laden rosters, the G League will drive substantially more fan attention, media exposure, revenues and overall excitement, positioning it to pay players (and coaches) more money. In fact, the G League is already instituting "big pay raises" for its players, and I have no doubt non-player personnel (i.e. coaches) will inevitably benefit from increased revenues as well.
Plus, its four-round, 108-selection annual draft means dozens of would-be college basketball players will start opting to play in the G League, resulting in an exponential “talent drain” for the NCAA.
2. AI and machine learning will minimize the negotiating power of sports agents.
As artificial intelligence (AI) and machine learning become more sophisticated and integrated into front offices, player contracts will be determined predominantly (if not completely) by "big data," therefore minimizing the negotiating power of sports agents. (Look for player contracts to become increasingly, if not totally, incentive-based as well.)
The most forward-thinking sports agencies will consequently shift their primary focus to athlete marketing and branding (e.g. the Hub-and-Spokes Model), leveraging it as a primary profit center, as well as using it to attract and retain more clients.
3. Players will become salespeople for their teams and leagues.
Take into account these two trends:
- Athletes are becoming an exponentially bigger window through which fans consume sports and support affiliated brands; and
- Tickets, memorabilia and other sports-related purchases are mainly transacted online nowadays, which provides unprecedented sales tracking, attribution and measurement capabilities
With this in mind, teams and leagues will create elaborate affiliate marketing programs that compensate players with a commission for selling tickets, memorabilia and other products which are directly attributed to the player.
In other words, the willingness and ability to engage in successful affiliate marketing campaigns will become an attractive trait when teams scout players — not to mention, a major opportunity for athletes and their representatives to make significantly more money.
Either way, this will require athletes and their representatives to become more entrepreneurial, with a heavy reliance on the most advanced, sophisticated, creative branding and marketing practices.
4. Teams and leagues will go "direct-to-viewer."
TV ad spending, which decreased for the first time since 2009, is expected to continue declining over the next five years, at least according to eMarketer. As more sports fans cut the cord and ratings continue to fall for even the most popular sporting events (like NFL games), ad spending is transitioning from TV to digital.
That, coupled with the notion that it’s only getting easier to stream live online, will pave the way for teams and leagues to remove the “middle men” (traditional media companies) and broadcast directly to fans across the world. This way, teams and leagues can enjoy most (if not all) of the tremendous advertising revenues and ROI, which are currently retained by the traditional media companies that own the broadcast rights.
But that’s not all: Teams and leagues, realizing that athletes are becoming the exponentially bigger window through which fans consume sports and support affiliated brands, will utilize technology to enable fans to watch games, competitions and highlights “through the lens” of any one of the participating athletes.
5. Athletes will transcend retail sales.
By removing every "middle man" from the equation, athletes and their representatives will employ the Direct-to-Fan Model to achieve:
- Higher margins
- More creative freedom
- Greater product variety
- Enhanced fan engagement and loyalty
- Access to new territories