What will be 2024? What will be the trends in sports in the new year? StageUp and ChainOn.it have identified six trends for the sports industry globally and shared them in a preview with Sport&Business. With one caveat: The recent ruling on the Superleague case, which promises to revolutionize soccer setups and beyond, will not have immediate effects. These trends analyzed:
1) Growth in investment in sports;
2) Investment in technology applied to sports and digitization of sponsorship processes;
3) Growing importance of technology: AR/VR, AI, data analytics, blockchain;
4) Exploration of new disciplines;
5) From visibility to “Brand Capitalization”;
6) Growths in the “Welness” sector.
First point, which is then a certainty: investment in sports will grow. “Sports proves to be a great attractor of investment,” says Giovanni Palazzi, president of StageUp and CEO of Chainon.it, and they will follow two strands. One is with the so-called “sport makers,” i.e., rights holders, from leagues to federations to clubs. In 2022 there were more than 220 M&A (Mergers and Acquisitions) transactions, according to Refinitiv’s monitoring, 52 percent of which were in Europe and 32 percent in the Americas. And they will continue in the near future, with two types of motivations. “Arab realities move with geopolitical objectives, so the acquisition of assets, including intangibles, is strategic for positioning on the international political chessboard regardless of cost essentially. In contrast, the Americans, who are primarily interested in the European market, pursue an economic return on investment and tend to believe that there is room for growth, related both to the undervaluation of European sports brands and to player transfer revenues, which are higher than those of North American franchises.”
The other strand is that represented by investments in technology applied to sports, which in 2021 amounted to $13.6 billion and in 2028 is expected to skyrocket to $40.5. Prominent among them is the digitization of sponsorship processes (from marketplace to persponsor and sponsee services), “a sector that has seen exponentially growing startup investments in 2023, amounting to more than $300 million in the U.S. alone,” Palazzi notes. Precisely on the topic of sponsorship, we are in the presence of a new generation of business arrangements. “Sponsorship is no longer visibility, as it was born in the 1970s, but an integrated communication system that takes advantage of the plurality of media available to sports makers and vast digital audiences with a very pronounced rate of interaction,” explains the StageUp president.
Indeed, the sports sponsorship market is expected to grow at an average annual rate of nearly 7 percent to reach $90 billion in 2027, according to
Brandessence.
And it will pay increasing attention to Esg issues, meaning environmental, social and governance impacts. “Sponsorship agreements will increasingly be evaluated through parameters now typical of third sector entities. This will open up important opportunities, especially for grassroots sports: manageriality and specific platforms will be needed to enhance these sustainable activities and also give the sponsor the opportunity to obtain Esg tokens that allow him to enhance and, if possible, compensate for activities that sponsors fail to harmonize with increasingly stringent environmental regulations.”
Third trend, the growing importance of technology, which is moving into four major areas: augmented virtual reality (from stadiums to wellbeing), artificial intelligence, data analytics, and blockchain. “Beware, however, of the negative effects on the compression of spectacle, with the massive use of technological tools for performance enhancement and analysis of opponents that risks obscuring the element of creativity that is crucial to the spectacle,” Palazzi warns.
Then again, the sport is always on the hunt for new fans, a trend that will be confirmed in 2024 arm in arm with the exploration of new disciplines, aimed precisely at broadening the fan base. “We are living in a world where gender and disability inclusiveness is becoming central. In industrialized countries, women already play more sports than men. There will be a lot of mixed competitions at the Paris Olympics, and both golf and cricket are considering the introduction of mixed-gender competitions. And therein lies the big challenge for traditional sports. How to engage the younger generation? The consumption habits of Millennials, Generation Z and Generation Alpha are very different, with a preference for value aspects such as inclusivity and environmental protection and less focus on long formats.”
We are on the fifth trend: from visibility to brand capitalization. StageUp’s president explains, “The return on investment in sponsorship has traditionally been based on the equivalence between sponsor visibility and commercial value. A type of measurement that is proving weaker and of less interest to sponsors every day because the channels and opportunities for visibility have multiplied and fragmented. The future of sponsorship is tied to the ability of the sport maker’s brand to tie in with the sponsor brand in a communication plan that builds a message consistent with its goals and values. Monitoring systems must consequently be updated by placing research and models at the center that value so-called “brand capitalization,” which can be up to 50 percent more valuable than visibility alone.” With this in mind, if visibility ceases to be the only evaluative element, even a less media-driven but strongly rooted in a territory reality such as Empoli in Serie A can prove to bring important benefits to a sponsor comparable to those obtainable with pairings with more emblazoned clubs.
The latest trend lies in the growth of the wellness industry that goes hand in hand with societal dynamics: people are living longer and want to take care of their bodies, so physical activity becomes crucial. According to Statista, worldwide fitness club revenues of $91.2 billion in 2021 will skyrocket to $169.7 billion in 2030. “A boost,” Palazzi adds, “driven by rising per capita income globally. Aesthetic needs, for many, are now equated with primary needs.”
