Sports industry’s huge revenue growth

Article posted by Coliseum, March 13^th, 2024

Image: Coliseum GSVA

The global sports industry is predicted to grow annual revenues by over 60% to $260 billion by 2033, according to a new study

In a newly released magazine – Sports’ Sprint to $260B – Two Circles explores how organisations across the sports industry – which currently boasts $159 billion in annual revenues generated by sports IP owners – can ride the wave over the coming decade.

The London-based data-driven digital agency said that during this growth period, sports fans are set to be the biggest winners, as successful organizations do more to know their fans best.

The publication highlights how more sports properties will mirror Nike’s multi-channel mindset and leverage direct relationships to drive D2C value and deliver better fan experiences, while creating more win-win B2B relationships.

The NFL and F1 are cited as two properties who have begun to do this effectively.

The new magazine highlights that while there are opportunities for all, the growth will be fuelled by the biggest sports properties, with 55% of the top 20 projected to outperform the market.

This anticipated trend underscores the expanding economic footprint of sports worldwide, highlighting the sector’s evolving nature and its increasing importance as a major contributor to the global economy.

This growth will also result in revenue generated from sports IP overtaking advertising and subscriptions revenues generated by traditional television.

Currently, the top five Sports IP Owners by % of market share are:

NFL 7.0%
Hong Kong Jockey Club 3.9%
UEFA 3.9%
FIFA 3.6%
Premier League 2.5%

Ultimately, sports fans will be the big winners of this growth, with IP owners that focus on those fans set for the best chance of success.

Sports properties will grow by +5% CAGR (Compound Annual Growth Rate) between now and 2033.

Gareth Balch, CEO and co-founder at Two Circles, said, “By knowing fans best, sports organisations will build better sports products, experiences and opportunities, creating better value for everyone. Ultimately, the fans will be the real winners of this exciting growth in years to come.

“As the global sports industry stands on the brink of this transformative growth, the Two Circles’ magazine serves as both a forecast and a call to action. It is essential for sports IP owners to adapt, innovate, and focus on the fan experience to realise their full potential in the coming decade.”

The biggest winners will be sports that give fans what they want and know their fans best.

The publication identifies three primary levers poised to drive this remarkable growth, the impact of which is already being felt:

More Fans, More Attention: The intrinsic value of sports IP is expected to surge as the global fan base expands and consumption patterns deepen. This lever hinges on the growing engagement of audiences with sports content, propelled by innovative distribution and content formats that cater to the diverse interests of a global audience.

Diversified Sports Experiences: Echoing trends in the broader entertainment industry, sports properties are set to evolve their offerings, presenting more varied experiences to engage broader demographics and better serve existing casual fans. This diversification will push sports organisations to adopt more entertainment-focused models that capitalise on new opportunities for fan engagement.

Direct Value Capture: In a strategic shift towards optimising revenues, sports IP owners are expected to leverage direct relationships with their fan base and business partners. This approach will enable more effective value capture, facilitating the growth of B2B revenues and fostering a more sustainable economic model for the industry.

Elsewhere, the publication explores what it would take for three new ‘unicorns’ to emerge within the industry and their immense revenue potential; the evolving challenges and opportunities in media rights; and the coming of age for both college and women’s sports, as brands wake up to their value and NIL (the rights of college athletes to control and profit from their name, image and likeness) influence flourishes.

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