2023 Global Sports Survey

Setting the Stage

The latest edition of Altman Solon's annual Global Sports Survey dives into an industry whose cultural impact has never felt stronger and yet is on the verge of major disruptions. In 2023, we spoke with over 150 senior sports executives globally and surveyed 2,500 sports fans located in the U.S., Mexico, the U.K., France, Germany, Spain, Italy, and China.

The sports media industry is experiencing unprecedented changes. As fans' habits continue to evolve and the industry faces further fragmentation, a dialogue among all market participants—fans, rights owners, media distributors, investors, and partners—is necessary to ensure the sector's continued success.

We are delighted to present the findings of our 2023 Global Sports Survey:

The sports media landscape has never been more fragmented, creating obstacles for the average fan to discover and access sports content. Meanwhile, a younger cohort of sports fans with shorter attention spans is favoring post-game highlight reels and second-screen experiences over live games broadcast on "traditional" linear TV. As fans move towards short-form and digital content, broadcasters and rights owners are experimenting with ways to monetize highlights and adapt this format to a multitude of platforms for a broader reach. It's not just the content that's changing, but the nature of fandom itself. Indeed, 56% of sports executives foresee a more athlete-based fandom that centers sports celebrities over teams taking hold among younger generations.

As sports fans in generations Z and Alpha come of age, they are expected to maintain their online-heavy media diet. By 2040, total TV hours watched per week are expected to drop by 15-20%. What's more, today's sports fans multitask: 57% of fans report browsing the internet while tuning into sporting events. In response, over 70% of sports executives see expanding content offerings beyond live events, augmenting live media experiences, and personalizing content and recommendations as essential ways to increase engagement with fans.

Finally, the rise of streaming platforms has further decentralized the sports media landscape, making content harder to find as well as difficult and expensive to access: 60% of fans report having issues accessing and discovering games for one or more of their most essential leagues. Executives believe that content syndication through rights sharing and where-to-watch guides; promotion strategies like live push notifications; and flexible pricing are integral to making live sports easier to watch. At the moment, reconsolidation in the sports media landscape is likely to follow one of two scenarios: a closed market with a small number of dominant platforms aggregating sports audiences; or an open market where live sports content is cheaper and easily accessible through multiple media outlets.

Media rights have long been sports organizations' main source of income. But in today's fragmented and economically challenged media landscape, some rights are facing potential devaluation. Factors like cord-cutting, market saturation, and competition from other sports have already led to flat domestic rights revenues for four out of five European soccer leagues. Even though rights deals continue to climb for top-tier U.S. sports, some 85% of industry leaders believe that rights owners are not actively addressing the changing needs of their media partners.

Despite this challenging media environment, the reach of top leagues and athletes has never been more global, with fans in some markets willing to pay hundreds of dollars a year to stream games and events from their favorite leagues. Sports organizations can innovate their product offering and experiment with new direct-to-consumer distribution models geared toward these fans – especially given that elite domestic leagues, like the NFL and major European football leagues, appeal to over 80% of fans in their respective domestic markets.

For rights owners to mitigate market risks, they should expand their addressable market by:

Looking towards international distribution deals and investing in marketing their league/teams on a global scale.
Packaging and negotiating media rights to bring more bidders to the table, including upstart tech platforms, streaming services, and gaming sites.
Focusing on long-term partnerships with longer media rights cycles and performance-based variables. Deals, like that between Major League Soccer and Apple TV, amounting to $2.5 billion over ten years with potential upside based on subscriber growth, are largely seen as the future of rights deals.
Creating new categories of rights in emerging areas like gaming and Web3.

The sports industry is undergoing a massive transformation, and sports organizations must adapt their business models accordingly and take a more active role in their media rights. By better understanding who their fans are, and getting clarity on their business model, including distribution strategy, buyer profiles, and ways to innovate, sports rights owners can thrive in uncertain times while rewriting the playbook on monetization.

Premium sports rights remain must-have assets: they deliver high-value programming and attract big audiences on a repeatable and predictable basis. Deals like the recent record-breaking $8.5 billion broadcast rights agreement for the English Premier League with broadcaster Sky and TNT Sports are evidence of the value of live sports. However, the rise of streaming has impacted legacy media companies’ economics, and even premium sports require new strategies to boost viewership and increase monetization opportunities.

Sports fans are an important audience segment: they dedicate more than one-third of their TV and video budgets to sports content. Broadcast networks and cable providers have courted sports fans for years, and streamers are also keenly interested in growing and diversifying their subscribers by appealing to sports fans. But attracting and retaining sports fans has become more complicated. With media fragmentation on the rise, sports fans are now more likely to become free agents: nearly 70% of fans are willing to switch television providers to retain access to one or more of their essential sports.

Broadcasters and media companies should optimize their rights portfolios and diversify their strategies for engaging fans across viewership levels. While more avid fans who watch sports multiple times a week are often laser-focused on their favorite teams, they represent less than 15% of the global fanbase. Casual sports fans who watch games less than weekly are a potential growth opportunity for media companies and rights owners.

Over 70% of the media executives surveyed believe casual fans should be catered to through expanded content offerings, like pay-per-view options, augmented live experiences, personalized content recommendations, and ad-supported models. With rights costs per subscriber on the rise, the question remains as to how media companies can sustain their current levels of live sports programming in today's streaming ecosystem. While legacy media has led the pack in broadcasting sports content, tech aggregators and OTT streaming services are uniquely positioned to exploit live rights over the coming 5-10 years. This is thanks in part to streamers’ ability to capture fan data and experiment with new in-stream features (e.g., stats, overlays, adverts) and offers adapted to fan profiles.

Consistent revenues, popularity among advertisers, and loyal fan bases make global sports an asset class with significant upsides. Over the past 18 months, the launch of dedicated investment funds that focus solely on sports, from athlete-led initiatives like APEX Capital to funds dedicated to women's sports, signal an even greater deployment of capital and the rise of sports as an investment class. In fact, over 60% of sports executives believe that private investment in the sector will accelerate over the next 5-7 years. As far as investor typology is concerned, 39% of sports executives see institutional private equity dominating sports properties, followed by 35% who believe sovereign wealth funds will lead investments in sports.

Eager for growth, these new investors have been quick to launch products and test partnerships designed to attract fans, expand reach, and optimize monetization. Liberty Media Group's 2016 acquisition of Formula 1 resulted in new Grand Prix events in Miami and Las Vegas, as well as IP expansions in the form of a buzzy Netflix series, leading to an increase in revenue and visibility. While investors are typically drawn to established leagues, emerging sports with niche fan bases, like drone racing, are seen as interesting long-shot bets to attract venture capital-style investment.

As private equity firms and sovereign wealth funds continue to invest in sports, league management will shift away from traditional models. The emerging generation of sports investors can optimize revenues by:

Adopting a portfolio-management approach that leverages synergies in areas like media, technology, intellectual property, and analytics
Identifying areas for expansion to grow the fanbase and improve distribution

Growth in the global sports industry and recent deal activity show no signs of slowing down. US sports franchises have an enterprise value that's tenfold of their current revenues, and European football clubs have the potential for a fivefold enterprise valuation. As the industry becomes more global, investors should expand the ecosystem through targeted investments in leagues and adjacencies in technology and media.

Sports media is innovating at a rapid clip. New technologies, including AI capabilities, virtual production tooling, and cloud-based workflows, are transforming content production and distribution. Meanwhile, digital native sports fans are consuming content in new ways, ranging from ultra-personalized feeds and streaming subscriptions to Web3 fan communities. The landscape is in flux, experiencing top-down and bottom-up changes, and is ripe for new products and revenue streams.

An overwhelming majority of sports executives see change on the horizon: Some 79% believe automated content creation will have a major impact on their business, and nearly as many (74%) believe remote production technology will be just as game-changing. Both capabilities can lower costs while producing content at scale and unlocking new revenue streams, giving rights holders the ability to create differentiated products from a single sports event. The partnership between WSC Sports Technology and the NBA, which provides customized in-game and post-game highlight reels, is just one example.

On the consumer side, just over half (52%) of sports executives believe content augmentation (AR/VR, gamification, and advanced stats) will impact sports media. This tepid response is due in part to low consumer adoption of mixed reality products. However, continued innovation in mixed realities and launches of devices like Apple's Vision Pro headset signal emerging opportunities in the area.

Sports executives are less bullish on blockchain and tokenization, with only 26% thinking that Web3 technologies and ownership models will move the needle. This is largely due to low adoption among fans (only 6% surveyed have purchased a sports NFT or fan token). However, executives believe that in the future, blockchain-based loyalty programs hold great promise and have the potential to create synergies with gaming and live events. Our survey of sports fans shows interest in a hypothetical "digital fan ID" that can unlock personalized content and experiences for sports fans. Leagues like the NBA, along with technology companies like Sportradar, are already experimenting with this concept and are testing ways to provide tailored experiences to individual fans.

Rights holders and sports media groups have an opportunity to innovate, thanks to advances in enabling technologies and major shifts in consumer habits. To take advantage of a rapidly changing landscape, sports business actors should invest in a well-defined innovation roadmap that targets areas with long-term growth potential. Identifying interdependencies between innovation in production, distribution, and consumer behaviors is key to thriving in a changing ecosystem.