The sports sector will grow at 6.4% over the next three to five year, a certain though marginal decline from the 7.4% growth sports business has registered over the past three to five years.
PwC’s Sports Survey 2019: Sports industry – time to refocus? has stated that the “sports industry leaders expect the sector’s growth to continue at a healthy annual rate of 6.4% in the next 3-5 years, albeit below the 7.4% seen in the past 3-5 years. Interestingly, compared to last year, in this years’ edition respondents foresee for the next 3-5 years slightly lower growth rates overall and across revenue streams.”
Even as the growth rate is feared to come down by a marginal 1%, the report foresees it as a sign of concern and uncertainty around the business impact of changing consumption behaviour of younger generations.
“A great number of rights owners, and in particular sports federations, are in need of transforming the way they do business. While different players will be at different stages of progress on this long journey, we hope that the insights in this report are indicative of how to refocus the efforts to effect the changes needed for their organisations to flourish,” says David Dellea, Head of PwC’s Sports Business Advisor.
Cricket will continue to grow at 28.4% in terms of revenues. However, there are nine other sports which offer better commercial prospects than cricket, which has been the driver for the sports business in India. Esports is the best placed with an expected growth rate of 88.4% to 86.7% for action/fantasy/shooter and stimulated sports respectively.
Among other disciplines, the report foresees football (soccer) revenue to grow at 80.2%, followed by basketball (80.2%), urban sports (53.3%), tennis (45.4%), rugby (38.6%), golf (35.6%), cycling (32.6%) and American football at 29.4%.
“Fuelled by the growing visibility of the FIFA eWorld Cup, the FIFA eNations Cup and the newly launched UEFA eEuro 2020, the jury is out if eFootball, for
example, will take on a life of its own and mobilise fans beyond the gaming community,” states the report.
“As truly global sports, football and basketball lead the way once more in terms of potential to grow revenues among traditional sports. Boasting leading properties that are cementing their position as the creators of leading premium content, both sports seem poised to continue their growth trajectory across multiple markets.”
The report also forecasts a huge potential of growth for women’s sport. “With women representing 70-80% of the consumer market – through a combination of their buying power and influence – there is huge untapped potential in the female audiences of women’s sports,” is an observation in the report, which has cited examples of the FIFA Women’s World Cup, attendance at the Atletico Madrid versus Barcelona women’s match and rugby events.
The report also states that as the digital disruption is accelerating, transformation and innovation is essential to the future of sports.
The survey though points a finger at sports federations functioning with 56.6% calling for improvement in transparency and good governance, 37.4% call for protection of athletes rights and wellbeing. Though there are not many issues regarding “governing the rules of the sports” and “organising competitions”.
The survey emphasises on development of elite athletes and grassroots participation (55.1% votes), while a strong 90.8% majority calls for innovative formats and rules to sustain sports revenues in a better way.
A strong majority of 72.0% sports leaders have stated that federations should focus resources on partnering with third-party investors or commercial entities, as opposed to fully controlling own events and content (28.0%). This result raises the question of the future role of sports marketing agencies in the evolving sports ecosystem.
While assessing the overall state of the industry, this year’s edition has zoned in on three important themes: the need for innovation within established sports organisations, the value of direct-to-consumer media distribution and the role of sports federations going forward.
CLICK HERE to access the full report.