Global sports industry on track for more growth

There is elevated confidence in the global sports market, with significant growth expected in the next several years, despite lingering macroeconomic and geopolitical issues. That is according to an annual report from PwC, which surveyed sports industry leaders from around the world.

The report projects that the sports industry will see higher growth rates in a diverse set of revenue streams, with the exception of media rights. Ticketing and hospitality is boosted by a return to live events post-pandemic, while betting-related rights are supported by the legalization of sports betting in several markets.

There is also strong demand for ownership in professional sports, which is likely to drive up the valuations of sports teams and franchises. For example, celebrities (like Will Ferrell and Ryan Reynolds) have spent millions on stakes in major British football teams and American basketball teams, among other record-breaking deals.

Women’s sports is another area in the industry that is seeing major growth thanks to increased popularity. For example, the WNBA (the American Women’s basketball league) saw a 42% increase in audience size from 2022 to 2023, with 89% more female viewers.

A total of 85% of the industry respondents to the PwC survey believed that women’s sports would see double-digit growth over the next three to five years. Some events, like the US Open women’s tennis final and the NCAA women’s basketball tournament have recently outperformed their equivalent men’s events.

“From the shifting media landscape, to the positive momentum surrounding women’s sports, and from changing fan behaviors to the potential of generative Al, the industry is constantly evolving,” said Clive Reeves, global sports lead at PwC.

“Yet these opportunities also need to be considered in light of the increasing economic uncertainty which could affect consumer spending and investor risk appetite.”

Another factor in the sports boom is the emergence of new funding options that will drive investment and growth. Dedicated sports investment funds (like US private equity platform Arctos Partners, or the UK’s athlete-led venture capital firm Players Fund) have helped to unlock value across different sport-related assets.

Changing consumer preferences are another major factor shaping the future of the sports industry. And that does not go unnoticed: Executives noted that shifting consumer behaviors is currently a top three trend in the industry.

For example, younger audiences are increasingly opting for data-rich online experiences when watching their favorite sports. Think: Live chats, live streaming, or other interactive media. Around half of those older than 55 years-old, on the other hand, never use online media and prefer traditional television.

“Data shows that younger sports consumers are more willing to pay to access content than older generations,” notes the report. “These audiences are also likely to have more paid subscriptions, reflecting the growing fragmentation of the media landscape for must-see sports content.”

AI in sports

With all the hype surrounding AI in essentially every industry around the world, it would be remiss to not mention it in the context of sports. Generative AI, for instance, has great potential to boost productivity and increase value by handling multimodal data, foster innovation, and spur greater fan engagement.

“AI – including generative AI – are revolutionizing how rights holders can scale powerful and direct connections with fans, which can in turn deliver more value to sponsors and broadcast partners and drive incremental revenue,” said one sports industry CEO in the PwC survey.

Tokenization is one particular avenue that some sports industry players are exploring in order to boost foreign direct investment. This refers to real-world assets tokenization, which, in a nutshell, is when tangible assets are represented by digitalized tokens that exist on a blockchain, a bit like how cryptocurrencies work.

But it is not just the private sector that plays a role in the how the sports industry operates, if not also the public sector – including in legislation, infrastructure, and the huge role governments play in facilitating major sporting events, like the various Olympic Games.

“Despite variations in policy approaches, certain global trends such as promoting women in sports and adapting to digital advancements are universally crucial for the public sector,” said Matthias Remund of the Federal Office of Sports in Switzerland, in response to the survey.

“These efforts serve societal interests and offer significant economic benefits. Additionally, the necessity for public sector intervention in areas like setting ethical standards, enforcing anti-cheating and doping regulations, and overseeing sports betting is consistent worldwide. These responsibilities underscore the indispensable role of public sector involvement in addressing challenges that transcend national sports sectors.”