Only 2% of UK Sports Leaders expect media rights to show anything more than moderate growth in the next five years according to our new study, the Sports Leadership Benchmark.
For the past 30 years the vast majority of sports organisations have relied on broadcast rights for a large proportion of their income. However, that market appears to have peaked in the face of subscriber churn, driven by rising costs of living and piracy.
So where will future commercial growth come from?
Our respondents saw the only significant growth potential in two areas: sponsorship and D2C/Digital Products. We see considerable challenges in both areas.
Firstly, the sponsorship market has been a bear market for at least 15 years, with any growth distorted by the very top of the market as brands rush to quality. Most big brands have shifted substantial portions of their marketing budget into hyper-targeted, flexible digital platforms at the same time as the economy has become increasingly illiquid.
For the most part, sport is simply selling what it wants to sell rather than what brands want to buy.
We outlined our thoughts about the challenge to D2C growth here
If the industry is right about its prospects for these two revenue streams, it will need to invest into a more strategic approach to data to make it happen. And quickly. As we argue in the report, the battleground for brand budget is for who has the best data. Offering small, vague data sets with no way to engage directly isn’t going to cut it in a world of TikTok and Instagram, paid search and immersive gaming.
As media continues to fragment and cords continue to be cut, “eyeballs” are just not valuable enough currency for most.
But with a change in mindset and approach, sport will give itself a much better chance of achieving its revenue targets.
We explore how in the report, which you can download at www.ptidigitalgroup.com
