g-f(3)1 Deloitte: 2020 Sports industry outlook

Extra-condensed knowledge

Interview with Pete Giorgio. This marks our fifth year of predicting the trends that we believe will dominate and disrupt the sports industry over the next 12 months. As we look toward 2020, we believe that five trends will have the biggest impact on athletes, team and league executives, and players across the sports ecosystem: 

1. the rise of women’s sports, 
2. the continued evolution of esports, 
3. legalized sports betting, 
4. college athletes maximizing their short-term value, and 
5. 5G/sports in the cloud.

Genioux knowledge fact condensed as an image.

Condensed knowledge 

• Women’s sports continue to build momentum. The momentum around women’s sports has opened unparalleled opportunities for the creation of new professional leagues, franchises, corporate sponsorships, and increased ticket sales. 
• Opportunities for growth in 2020: 2020 may herald many new and evolving opportunities for women’s sports: 
• Marketing products and services to young female athletes and nonathletes alike via youthful national icons, such as tennis’s Naomi Osaka and Olympic snowboarding gold medalist Chloe Kim 
• Championing relevant topics, such as inclusion and diversity, via social media channels 
• Supporting year-round female sports (such as the WNBA, college sports, and soccer friendlies) by leveraging the momentum generated by the record-breaking year for women’s sports in 2019 
• More corporate sponsorships at professional sporting events to further enhance support, interest, and participation in athletics

• Some strategies may facilitate growth. Typically, women’s sports leagues have been modeled after men’s leagues. However, there are often unique aspects of women’s sports that create new and different opportunities. In 2020, leagues and teams can break the mold, embrace those differences, and engage fans in a new way.

• Esports continues its rapid evolution. This is the third time in five years that esports has appeared among our top trends—and for good reason. In 2020, the global esports market is expected to generate $1.5 billion in annual revenues, primarily from sponsorships and advertising to an estimated global audience of 600 million fans. According to Deloitte’s 2019 Digital Media Trends Survey, 40 percent of gamers watch esports events at least once a week.
• Opportunities for growth in 2020. 
• As the esports ecosystem expands, we expect to see dramatic growth in streaming and broadcast sponsorships involving platforms such as Twitch, YouTube Gaming, Facebook Gaming, Mixer, and Smashcast; Huya, Douya, and PandaTV in China; and OGN in South Korea, in addition to more integrated sponsorships that can occur in-game and as part of esports events.
• New branding and sponsorship opportunities are also expected to emerge—especially for brands that align naturally with typical gaming behaviors (such as energy drinks, meal delivery, and peripherals).
• With esports’ popularity skyrocketing, many markets are ripe for launching new franchise leagues and city-based teams. Other opportunities include one-stop solutions for players and teams to reach larger audiences across many different OTT or streaming engagement channels.
• Some strategies may facilitate growth. Until now, esports leagues, teams, and players have typically thought of fans merely as spectators. That should change—it’s time to start creating more one-to-one relationships with fans, leveraging direct marketing and CRM approaches not only to drive advocacy and talk value, but also to take advantage of the viewing behaviors and data coming out of engagement with esports leagues to drive greater monetization, awareness, and advocacy. 
• Legalized sports betting could make giant strides in 2020. The US Supreme Court lifted the federal ban on sports betting in May 2018, and since the ruling, 14 states have legalized the activity: Arkansas, Delaware, Indiana, Iowa, Mississippi, Nevada, New Hampshire, New Jersey, New Mexico, New York, Oregon, Pennsylvania, Rhode Island, and West Virginia. However, the jury is still out on the ruling’s long-term implications. Several US states are grappling with whether to join those that now allow sports betting. While many companies see opportunities to monetize sports betting, others raise concerns about legalized gambling’s potential impact on the integrity of sport— and their organizations.
• Some strategies may facilitate growth. Given the critical importance of accurate, real-time data in the world of legalized sports betting, companies should focus on hiring sports-betting analysts and increasing their data-capture capabilities.
• College athletes look to maximize their short-term value. In October 2019, the NCAA said it eventually intends to allow college athletes to earn compensation for the use of their name, image, or likeness. However, the NCAA is just starting to work out the details of how this compensation plan would play out. The NCAA’s announcement comes on the heels of California’s Fair Pay to Play Act, signed in September 2019, that would allow college players to strike endorsement deals and hire agents. The California law is scheduled to take effect in 2023. 
• Opportunities for growth in 2020. Although it may not happen in 2020, there is growing potential for college athletes to become their own brand, with the ability to profit from their various likenesses (name, image, and so on). This could be accompanied by the creation of “college sports free agency,” in which athletes would be free to go where they have the greatest ability to profit off their likenesses. 
• These developments will likely drive the need for a new form of agent and talent representation specifically for college athletes. 
• In terms of opportunities, it’s unclear how the compensation issue will play out for well-known vs. relatively unknown college athletes.
• 5G and cloud computing open new possibilities in sports. As 5G wireless technology is rolled out during 2020, its faster transmission speeds can reduce latency for fans—both at home and in stadiums.
• Opportunities for growth in 2020. In-stadium fan experiences can be revolutionized as mobile devices provide instant replays, live-TV graphics, faster connectivity, and expedited food and beverage orders. Monetization of 5G-enabled VR devices can allow fans to experience live games from virtually anywhere and with friends across the globe. Mobile devices will soon be able to match the latency and quality of consoles for esports. Hologram broadcasts are already being explored by some broadcast companies as a legitimate use case of 5G’s speed. Service and streaming providers will be able to monetize higher-quality, immersive, and added-value broadcasts. 
• Telecommunications providers may also have an opportunity to capitalize on real-time sports betting by providing high-speed links to gamblers looking for an edge.
• What should businesses be mindful of as they plan for growth? Seventy percent of providers’ 5G launch plans revolve around sporting events. In addition, 74 percent of mobile traffic will be through video in 2024,15 meaning full integration and understanding of 5G services are high-priority action items.

Category 3: The Big Picture of Sports

[genioux fact extracted from Deloitte]

Authors of the genioux fact

Fernando Machuca

References

2020 Sports industry outlook, Interview with Pete Giorgio, Deloitte.

ABOUT THE AUTHORS

Pete Giorgio

Principal | US Sports Practice Leader

Pete, a principal with Deloitte Consulting LLP, leads Deloitte’s US Sports practice, serving multiple sports clients including the United States Golf Association, NBA, United States Tennis Association, and United States Olympic Committee. His main areas of focus are strategic growth, customer acquisition, digital transformation, innovation, organization transformation, new business operations and implementation, and cross-unit integration.

Pete joined Deloitte after spending time with multiple IT strategy and development consulting firms. Prior to that, he served in the United States Air Force, achieving the rank of Captain. Pete earned a B.A. in Computer Science from Amherst College where he was a four year varsity basketball player, three year starter, and still holds the single game rebounding record.

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