The sports industry must seize its seminal moment
Updated: Jun 1, 2020
The latest episode of the Are You Not Entertained? podcast is a must listen for those working in the sports industry, highlighting the long-standing issues sport must overcome as it rebounds from COVID-19.
I must admit, I'm a little overwhelmed with the amount of quality podcasts on the market right now - I genuinely can't keep up. With that in mind, I'm extremely glad I took the time to listen to the latest edition of The Groundsmen from the Are You Not Entertained stable this week and would urge all those working in sport (and beyond) to do so too. This was a fascinating discussion, where a vastly more experienced and knowledgeable panel than me (Roger Mitchell, Grant Williams and Giles Morgan), confirmed many of my own observations from the past 8+ years in the sports industry, having previously worked in the slightly less glamorous world of insurance.
Now Insurance gets a bad rap, and let's just say it's a dry industry, but I still maintain that I learnt as much in four years at Allianz than I have in double that time working in sport. This is partly because is was my formative years as a marcomms professional and partly because the company was excellent at investing in its people. But, mainly it was the fact I was introduced to concepts like market orientation and segmentation, CRM, data capture, Net Promoter Scores and tailored product offerings; staples of D2C businesses for decades, but rarely discussed subjects in sport circles.
Roger Mitchell states in this excellent episode that sport has been a lazy and complacent industry for many years. As the founding CEO of the SPL and an executive in the music/sport industries for 25 years, Roger knows far better than me, and his view certainly resonates. Failure to look and learn from other D2C sectors quickly enough, not foreseeing trends in viewership and sponsorship, and generally being reactive to change rather than instigating it.
Sport can be terribly insular with its decision-making, often basing it on emotion and subjective opinion because, after all, we are all sports fans aren’t we? So surely we know the answers and don’t have to ask the actual consumers.
I caveat this criticism by pointing out that the sports industry outside of the US market is still relatively immature, when viewed as a commercially-driven entity. US professional and collegiate sports (including US/IMG/McCormack-driven global tennis and golf tours here) are decades ahead in realising the commercial value of sport and treating franchises and college programs as sustainable money-making operations.
Clearly you cannot group all rest of the world sports and leagues/events as one homogeneous group, there are different tiers - based primarily on the popularity of the sport - that drive vastly disproportionate broadcast and sponsorship revenues. As a Liverpool fan, I hate to use the Premier League formation as an era-defining point in time (for obvious reasons), but that was the moment when serious media money, coverage and sponsors started defining top-tier professional sport in Europe, firstly in the case football and followed by cricket, rugby and cycling.
You could argue that failing to integrate more elements from the US model is a prime example of the rest of the sports world’s lethargy. Another explanation is the very foundation of European sport structures, with many leagues and Associations well over 100 years old, still employing traditional ownership/governance structures and with fans typically more resistant to embracing commercialisation than their US counterparts - the process of modernising professional sport has not always been straightforward.
Now, as former HSBC sponsorship supremo Giles Morgan explains, we find an industry in crisis that has been used to working in very different ways for the past 20+ years, with very different metrics from those needed now and in the future.
Morgan hits the nail on the head when he says on the pod that a lot of people aren't actually trained to deliver what sponsors require in order to prove effective ROI. This was backed-up by the comments of Two Circles chief executive Gareth Balch, who claimed last week during SportsPro’s Insider Series, that the industry lost out on UK£13.7 billion (US$16.7 billion) in unrealised sponsorship revenue throughout 2019 - largely owed to not knowing how to best monetise user data. It’s not just within the sponsorship specialism that sport suffers in comparison to other industries.
Looking solely through the lens of my areas of experience, I’d have to say marcomms is one of the worst offenders. I appreciate I’m making some sweeping statements here and this is by no means representative of all the organisations and individuals that I’ve had the privilege of working with and for. That said, I’ve seen plenty of high-level decisions in the past 8 years, I’ve met a lot of people, chewed the fat with plenty of smart-thinkers and listened, and read, the opinions of many more, we can't all be wrong.
Just this week I had a conversation with a contact in the commercial team at a respected sport trade media outlet, who was explaining how they sometimes finds themselves talking to four different people, in different departments, at the same organisations when trying to confirm partnership opportunities. None knew they were in conversation with the other. I explained I wasn’t at all surprised at this inefficiency as from my experience there is often a distinct lack of 'true' collaboration (not just weekly catch up meetings) between marketing, digital, commercial and communications in many businesses and its even less clear who has ultimate authority. This is just one small example, but it makes the point.
Don’t get me wrong, there are some organisations I've experienced that are aligned - normally those sharing reporting lines - but there are also many working completely independently and there is still much do to reach the holistic approach that is going to be needed moving forwards.
Silos simply can’t exist when it comes to the touchpoint-owning functions of modern sporting structures, in fact for all D2C organisations regardless of sector. The fan really does have to be at the centre of everything and not viewed as a single simplistic segment, but all the different profiles that now exist with data the new premium currency.
Indeed, commercial deals should no longer be signed without other stakeholders being part of the process and advising on how they will be activated. Digital content needs to be aligned to brand positioning, rooted in ROI for commercial partners and seen through the critical lens of communicators before being committed to. Marketing campaigns need to be purpose-driven and deliver data to connect and engage new and existing fans. Communications and PR has to cut the crap and prove its press release claims to be ‘market-leading’ or the ‘first-of-its-kind’ with meaningful data and find ways to show tangible value to the bottom line, not just protecting reputation on a reactionary basis.
Only when there is a true collaboration will organisations thrive. Look at the most valuable and recognisable brand in the world: Apple. OK it’s a tech company, but many Apple consumers have the same passion for the company’s products as fans do for their sports. Why?
Apple create products, services and experiences its consumers don’t even know they need. That’s true customer innovation - and the way sport needs to start thinking.
I firmly believe that the most innovative organisations are the ones where it is a core part of corporate culture and there is total alignment across all functions. This is actually much easier, and more important, for start-ups and rights owners of second-tier sports to achieve, as they battle for broadcast rights, sponsorship income and visibility in an increasingly crowded content market.
The green shoots are emerging in the way sport has reacted to COVID-19 and the industry has some brilliant thinkers, organisations and entrepreneurs that are beginning to generate change. Sport has the eternal advantage of stirring emotions like no other cultural activity. COVID-19 has necessitated many developments at a far greater pace than originally planned, and that will only be a good thing for the industry in the long run. We are in a period where only the strongest will survive and new commercial models will be needed to attract future investment in a recessionary environment. Many in the sports world will need to widen skill sets, create new management structures and truly integrate across departments to deliver sustainable success in this brave new world.