Ready For Recovery? Sports Industry Faces Multiple Societal And Commercial Challenges To Achieve A Durable Recovery, Says 2021 PwC Sports Survey

• The latest edition of the PwC Sports Survey examines the various challenges for the sports industry to achieve a sustainable recovery 

• Average market growth is expected to remain stable at 4.9% for the next 3-5 years 

• More than 80% of industry executives see the shifting media landscape and growing expectations for sports’ societal role as the sector’s key market forces

• Nearly 60% of football executives believe that sports organisations should focus primarily on controlling costs rather than increasing revenues

• 63% of industry executives feel that reduced exclusivity and increased number of buyers per territory will lead to higher media rights value

PwC’s new 2021 Sports Survey “ready for recovery?” polls nearly 800 sports industry executives from around the world on the current and future state of the sports industry. Amidst the uncertainties of the global pandemic, the study specifically covers the growing societal challenges facing the industry, key areas of transformation for sports organisations as well as the redesign of commercial models. 

Media transformation and growing sport’s societal role are driving change

In the past 3-5 years, the average global market growth has remained stable at 4.9% and is estimated to stay consistent for the next 3-5 years. While respondents expect a strong increase in the Americas, Asia and Africa, growth in Europe, Australasia and the Middle East is forecast to decline.

“To achieve financial stability, over 40% of respondents believe that the focus should be on controlling costs. In the  football/soccer industry, the proportion is even higher and rises to almost 60%.”

Interestingly, brands, sponsors and media companies are less optimistic than event owners or sports federations. According to respondents, the transforming media landscape is the industry’s main change driver, followed by growing expectations for sport’s societal role.  

Stakeholders urge sports organisations to act more sustainable 

For sports properties, the risk of losing the trust of fans has become the main reason for investing in social and environmental sustainability before the need to meet the expectations of sponsors and investors. Fans demand a clear stance on social and environmental issues, also from the athletes themselves. Female athletes in particular are increasingly using their platform to draw attention to  social and political issues.

While most rights owners have long undertaken societal initiatives in an ad-hoc manner, survey results show that sports organisations are increasingly addressing social and environmental performance alongside their broader strategic issues. To achieve financial sustainability, sports executives have traditionally concentrated on growing revenues. Refreshingly, slightly over 40% of respondents believe that the focus should be on controlling costs. In the football/soccer industry, the proportion is even higher and rises to almost 60%.

The risk of taking on too much at once 

Sport organisations are strained by the continuous launch of new leisure offerings and more varied  expectations of brands and media companies, which accentuates the need for transformation. While it is crucial that sports organisations diversify beyond events, some have stated to become publishing, entertainment or even technology companies.

David Dellea, Head of PwC Sports Business Advisory explains: “There is a risk that sports properties lose focus. A coherent strategy is  increasingly important to prevent them from becoming merely good enough at everything, while mastering nothing.”

As sports organisations increasingly turn to private equity to fund their transformation, most executives agree that investors have a real impact on growth. However, 73%  are concerned that they are distracting sport from its historic values. 

Fan and partners’ evolving expectations shape a liquid market 

As shifting fan habits and transition to streaming accelerate, the media landscape is moving from  fragmented to fractured, pushing rights licensors to relax exclusivity while exploring multiple  distribution models. Survey results show that sports organisations need to catch up with the commercial use of fan data to provide their partners with modular, targeted marketing propositions.

“There is a risk that sports properties lose focus. A coherent strategy is  increasingly important to prevent them from becoming merely good enough at everything, while mastering nothing.” – David Dellea.

To date, more than 70% of sports executives perceive the commercial success of fan data as disappointing or below expectations. Beyond OTT (Over-the-top media service) and NFTs (non-fungible token), the combination of content and data assets also expands the opportunities for direct-to-fan monetisation. In general, all market dynamics are heading towards an unprecedented level of liquidity. This is bound to lead sports organisations to take more entrepreneurial risks. 

About this survey 

The sixth edition of the PwC Sports Survey “ready for recovery?” was conducted by the PwC Sports Advisory team between June and August 2021 through an online questionnaire distributed to sports industry leaders occupying C level/senior positions.

In total, 792 respondents across 55 countries have completed the survey. The analysis in this report is primarily based on the collective opinion of the respondents. It is completed by data provided to PwC by Facebook, Videocities, IRIS Intelligent Research in Sponsorship, HYPE Sports Innovation and Parrot Analytics as well as PwC Sports Advisory team’s knowledge, research and views about the industry. 

Download

The entire study can be downloaded as a PDF document – https://www.pwc.ch/sports-survey