Over thirteen years in sports business and I have experienced a lot of change but generally sports franchises have been incredibly focused on fielding a winning team and selling out their buildings. Years ago a few teams started to look at the business of sports differently. They thought bigger. They created 4 ripples of change which have become large waves for every property to examine. A fifth wave, sports betting, is rising quickly but lots of questions remain. Let’s luck at the top 4 right now and what might happen with number 5.
Big Data is at the center of this change. The next 4 waves deliver even more data teams they must protect, store, parse, analyze and monetize. Many fans never attend a game. They may be too far from the team or can’t afford to attend. But they can buy merchandise, consume content and engage with the team.
Example – Kraft Group (Patriots, Revolution)
With a large data acquisition strategy and CRM team the Patriots are now consulting other entities on how to build and grow a fan database. Kraft Analytics Group counts 15 years of experience and puts this to work for teams, league, and enterprises. How have built this practice? Ove time they’ve also been part of the next 3 waves we will look at. They drove data acquisition with national fan promotions and built analysis teams to monetize the data. Many vendors can provide the tech to manage all this information flow. Below is one such solution and I think a good visual of all that needs to be managed.
Which brings us to…
2) Mixed Use Development
In 2007 Kraft Group launched Patriot Place which started as a strip mall outside of Gillette Stadium but it had bigger plans. It now features the Patriots hall of Fame, presented by Raytheon as well as a luxury movie theatre. Sponsors and non-sponsors are integrated into the retail environment including Dunkin Donuts and Bass Pro Shops. LA Live followed soon after with the Lakers and Kings. NASCAR has Daytona One. Baseball with the Cards, Braves and Cubs, and even Minor League Baseball with High Point, NC announcing a mixed use development around a downtown stadium just this week. In the NFL the Jaguars have announced waterfront development plans and the LA Rams are building a $5 Billion complex with a stadium, entertainment, NFL Network Studios and retail.
Example – Atlanta Braves
The Battery outside of Atlanta is a destination in Cobb County. Office Buildings including Comcast’s Regional HQ, A Roxy Theatre for concerts along with restaurants and bars of every cuisine are within 3 blocks of the ballpark. All of this created together with the stadium development. Digital billboards throughout the complex highlight sponsors and retailers. Baseball Commission Rob Manfred “I think the kind of mixed-use development the Braves have done at SunTrust Park provides a roadmap for clubs to get new stadiums built.”
3) Expansion into Other Sports, Events and Entertainment
Cross ownership in sports is not new though some leagues have rules about what leagues their owners can be involved with. Combinations in hockey and basketball are frequent due to the nature of being able to utilize the same arena. Now these organizations are expanding outside of the typical arena or stadium game to include other event opportunities from soccerto concerts. The Jaguars added an amphitheater allows for many different events, targeted at every demographic and adding valuable names to their master database allowing them to build a comprehensive look at every fans. Favorite players, type of music, drive or rideshare.
Example – RSE (Dolphins)
RSE Ventures who owns the Dolphins and recently completed an incredible renovation of Hard Rock Stadium has since added the Miami Open Tennis Tournament to its roster of events. Transforming Hard Rock Stadium and the surrounding parking area into a state of the art tennis venue.
Hard Rock Stadium Tennis In addition to tennis RSE produces the ICC Summer Soccer exhibition tour with global soccer brands touring the US and now is said to be in talks to jointly promote an F1 race in Miami. Diversifying their database even further and opening up new sponsorship opportunities.
With the average age of TV viewers for sports leagues all above 40 years of age all leagues are looking at e-sports and their younger demo. It’s yet another way to grow the database and take ownership of a growing industry with new sponsors and fans as the prize. https://www.sportsbusinessdaily.com/Journal/Issues/2017/06/05/Research-and-Ratings/Viewership-trends.aspx
Some franchises and leagues are sticking to their sport with the NBA and their NBA2K League and draft recently and last year all 32 teams participating in crowning a Madden Challenger. But there are other ways to play in e-sports with the Fiesta Bowl hosting an Overwatch Championship https://fiestabowl.org/events/fiesta-bowl-overwatch-collegiate-national-championship/. The Mets and Patriots bought into an Activision Overwatch league as well.
Example – Monumental Sports (Caps, Mystics, and Wizards)
You would be hard pressed to find a bigger believer in e-Sports than this group and they are already reaping the rewards. At #SSAC18 Ted Leonsis said the Capital One Naming rights deal for the building where the Caps and Wizards play sold for $10 million to Capital One. The naming rights for the house where their gamers are staying sold for $4.5 million. They are all in with Gruber and Vinik on Team Liquid.
See Ted’s comments at the 39:30 minute mark though the entire panel is must see TV. For instance Leonsis also says at Sloan Sports they will be out in front when it comes to trend number 5.
5) Sports Betting
This is so wide open but many organizations and States have been preparing for the opening up of sports wagering laws for some time now.Europe offers many examples of what we could see in the future. While I was in England at London Stadium they had automated betting kiosks in the stadium where you could bet on any number of outcomes and events within the game or other games. Betting sponsors are often the largest for most Premier League teams with several prominent shirt or sleeve sponsors.
Waves 2-5 should all feed the database beast in wave 1. Leading teams will be able to analyze and monetize this data with partners and improve the fan experience at the same time.
What waves do you see being the most important? Did I miss any big trends? Look forward to your comments and discussion.