Digital transformation shall be key to engaging sports fans during the pandemic and beyond, and will improve sports organizations’ financial standing in the long run. Aves Lair is closely observing the trend of digital transformation in sports teams around the world. The COVID-19 crisis has upended the way sports teams connect with their fans, engendering financial losses across the industry. The Elephant in the Room: The pandemic’s disruption to the fan experience and sports organizations’ traditional revenue sources has accelerated the pace of digital transformation in sports teams, both as a means to boost revenue and connect with fans amid a period of profound uncertainty. The outcome and the solution: What's The Impact of COVID-19 on Sports Teams? 1. The pandemic has proved financially costly for global sports teams 2. Fans are reluctant to return to stadiums and are unlikely to attend live games in pre-pandemic numbers even once it is safe to do so 3. Sports teams are badly in need of new, sustainable revenue sources to outlast the pandemic 4. Digital transformation: alternative and more sustainable revenue sources Data monetization Media rights utilization 5. New ways to keep fans engaged: 6. Sports teams can use digital technology, like streaming platforms and club apps, to connect with fans even while stadiums remain empty 7. Some clubs are embracing their role as both content creators and distributors 8. Virtual sports are emerging as a viable way to connect with fans during the crisis 9. Great digital experiences are linked with higher fan satisfaction and spending, as well as deepened loyalty . Photo: Photosport The COVID-19 pandemic has forced sports teams to find new ways of connecting with fans and more durable revenue sources . #1 The pandemic has proved ruinously costly for sports teams across the globe For National Football League (NFL) teams, empty stadiums resulted in approximately tied to fan attendance - including concessions, tickets, merchandise sales, as well as sponsorships. Indeed, multiple sources of income relied on by traditional sports teams are tied to fans at live games, and cannot be easily from supporter-filled stadiums. $5.5 billion in lost income “decoupled” The phenomenon is not unique to American sports leagues. - ranging from rugby to horse racing, but not including the upper echelons of men’s football and cricket - are set to receive 300 million pounds in an emergency government bailout aimed at across professional sports triggered by nationwide lockdowns to reduce the spread of COVID-19. Eleven professional sports in England staunching revenue losses Rugby Football Union, representing one of the sports to receive a portion of the government funding, recently publicized resulting from restrictions on spectators and cancelled international matches. revenue losses of 145 million pounds Photo: Andy Rain/EPA via The Guardian The pandemic has put sports around the world under considerable strain - even at the highest professional levels. The British government, meanwhile, has ordered that the English Premier League, representing the highest level of professional men’s football in the country, share some of its money from television contracts - which amount to 9.2 billion pounds in total - to buoy the professional men’s game . below the first-division level The League has agreed to send to teams in League One and League Two (England’s third and fourth tiers of men’s pro football) to help make up for their lost match day revenue. 50 million pounds Though losses for League One and League Two sides have been great - clubs in those two divisions have lost on average $38,000 to $130,000 per game during the pandemic - even Premier League stalwarts have been touched by the downturn in match-day revenue. Manchester United, perhaps the world’s most famous football club, have said they lose every time a game is played in front of empty terraces. four to five million pounds Financial shortfalls have also affected continental sports teams. A y produced by the found that the economic effects of the pandemic have resulted in revenue losses in excess of 1 billion euros among some of Europe’s biggest football clubs. KPMG stud Football Benchmark Team #2 Sports fans aren’t visiting stadiums anytime soon. even when conditions are safer suggests that sports teams’ game-day revenue losses are not likely to disappear the moment the pandemic finally lifts. polled by Deloitte in May 2020 expressed wariness about going to live events for six months (one might reasonably assume that with the worsening pandemic in the United States, those consumers might reiterate their answer if they were surveyed again today). Fans’ reluctance to return to stadiums One in three consumers Secondly, of the people surveyed in a study conducted by Seton Hall University’s Stillman School of Business, of those who identified as “sports fans” “said they would not attend another live sports event until a COVID-19 vaccine has been developed and distributed.” nearly two-thirds Crucially, even if enough sports fans were to eventually feel comfortable enough to attend live games to positively affect sports teams’ game-day revenue, exactly to join thousands or tens of thousands of fans in a stadium remains unclear, and potentially far off. when it will be safe Photo: USATSI The 2020 NBA Finals, which saw the Los Angeles Lakers defeat the Denver Nuggets, was attended virtually by an audience that included some well-known basketball fans. Clearly, , whether in the NFL or EFL League Two, as the pandemic enters its second year and games continue to play out in front of empty stadiums. In fact, a by Deloitte emphasizes the importance of “reshaping and expanding revenue generation models” for professional sports in the new year. it is vital that sports clubs look to alternative sources of revenue report The Digital Transformation That Sports Teams Need Digital transformation hold the ticket to sustainable income generation and fan engagement for sports teams willing to embrace change. #1 Teams can put their media rights and data to work to generate revenue. Sports teams’ adoption of new digital modes to connect with fans predates the pandemic; however, the crisis caused the trend to accelerate in more visible and dramatic ways than ever before. - two MediaKind described as “under-utilized.” Clubs can use digital transformation as a means to utilize their brand and media rights, and monetize their data potential revenue streams Sports’ digital shift also aligns with fans’ growing preference for more digitally integrated experiences and demand for more ways to engage with their favorite sports team or club. The industry, teams, and fans each stand to gain from digital transformation; consequently, sports are about to change in a big way. Sports teams had already been steadily accumulating vast troves of player and fan data before the pandemic set in, collecting information that happens to be extremely valuable to “teams, coaches, broadcasters, and rights holders,” whose interest in connecting teams with their fans has built a sports-specific analytics industry Deloitte expects to approach in the next two years. To to empower better team results, better player performance, and more personal relationships with fans will prove indispensable to the building of a . $4 billion optimize the way that data is used future-proof sports team Sports media rights , on the other hand, offer another opportunity for teams to build sustainable revenue streams. In this context, sports media rights refer to the ways in which a sports brand or rights-holder chooses to sell a copyrighted product - such as a recorded game played by that sports team - to a media distributor. While broadcasting still comprises the bulk of sports media rights use in today’s sports industry, other possibilities have emerged, identified by as “e-commerce, streaming, ticketing, sponsorship, membership, loyalty and wagering.” SportsPro And sports media rights are increasingly valuable from the rights-holder’s point of view. From 2006 to 2018, sports media rights in the United States grew nearly , and are predicted to “triple by 2023,” according to the . 150% World Economic Foundation Gaps remain in the market, though. Sports media rights-holders, such as teams and clubs, rarely offer a , and those mobile apps that are offered by rights-holders do not take full advantage of “secondary” monetization sources, like “ticketing, merchandising and advertising,” which are often absent from app interfaces, according to . team-specific app to connect with fans MediaKind #2 New tech allows teams to connect with fans during the pandemic and in the digitally-integrated future. The sports industry is also attempting to use , effectively bringing them “inside” empty stadiums. Fox Sports rolled out who filled vacant stadiums in the network’s coverage of Major League Baseball games. digital technology to connect with fans in-person despite the pandemic “virtual fans,” The atmosphere at one empty, 50,000-seat stadium in Japan, the Shizuoka Stadium Ecopa, was recently enlivened by an app produced by Yamaha, the “Remote Cheerer powered by SoundUD,” which allowed fans to from their homes into the ground of their favorite team. broadcast their cheers Top-tier Danish football club Aarhus Gymnastikforening (AGF) set up an pitch-side to virtually bring into the stadium for a match against Randers. array of massive screens 10,000 AGF fans The club used Zoom to host fans virtually, in what became a case study in digital agility as the key to seeing out the pandemic and keeping fans engaged in the long run. Shortly after the experiment, bigwigs at reached out to AGF to discuss how the digital fan experience was accomplished, and a Zoom spokesperson said London-based West Ham United were also interested in testing the video conferencing platform to once again fill London Stadium with fans - albeit virtually. Norwegian, Dutch and English teams Photo: Henning Bagger/Ritzau Scanpix/AFP via Getty Images Aarhus Gymnastikforening supporters cheer their team on via Zoom during a game against Randers in the Danish Superliga. Previously, forerunners in the industry had begun to . explore new applications for technologies like artificial intelligence to create engaging game day experiences Major League Soccer side became one of the to deploy artificial intelligence to serve fans’ needs, including helping fans order concessions, when it unveiled its AI assistant, OLLY. Los Angeles FC first sports teams Moreover, the sports venue of the future will likely reflect a technological approach to the changes sports fans have grown accustomed to during the crisis. that the experience of attending a sports game in the future will involve fans buying tickets from personalized ads on social media platforms, storing their ticket in a digital wallet, and preloading the ticket with cash for merchandise and food at the venue, undergoing a symptom and temperature check at the gates of the stadium, picking up food orders from a contactless location, betting on game events with their mobile device, and experiencing contactless shopping in stores at the venue (that is, customers can simply walk out of the store with whatever merchandise they want, knowing that their account will automatically be charged for their purchases). Deloitte predicts #3 Teams aim to build all-season connections with fans through official apps. Some sports teams have opted to create an to give fans fuller means of keeping up to date with the goings-on at their favorite team while hooking the brand up with new revenue streams, like along with premium content and subscription plans for fans interested in accessing an even richer fan engagement experience. official team app “paid advertising and sponsorship,” Indeed, asserts that sports organizations need to “establish year-round, two-way relationships with fans,” converting supporters’ passion into an all-season demand for team content, whether by using streaming platforms like Twitch or rolling out fan apps. a Deloitte report #4 Consumers want more ways to interact with their favorite sports teams - and the industry is listening. Pioneering sports teams are busy for and digitally integrated ways of connecting with their team. keeping up with fans’ growing appetite digital sports consumption For some clubs, this means . leaning into the convergence of content and distribution - being both the creators of content fans love and the platform on which fans consume that content Last year, to produce its own bundled D2C game broadcasting and fan engagement platform. the NBA announced that it would partner with Microsoft Indeed, sports teams and the players who comprise their rosters are in their own right. “becoming platforms” This process of “platform-ification” enables sports teams to get closer to fans in spite of the pandemic. Some fans tune into their favorite athletes’ video game streams on , for instance. Twitch Teams are attuned to the potential to connect with fans this way; many, like the NHL’s Capitals, the gaming talents of their players in Twitch channels. “showcase” Meanwhile, esports is attracting traditional sports organizations, who see in the emerging world of competitive online gaming an opportunity to foster connections with younger, digitally native fans. Recent years have seen owners of teams from in the U.S. dabble in esports, “largely with owned by Activision Blizzard and Riot Games. “every major sport” franchised leagues The move is likely to pay off. Data show that more consumers are with approximately one-quarter of consumers and about one-half of Millennials and Gen Z consuming video game streams and recorded video every week. “watching video game content,” Esports’ popularity is staggering. Revenue across esports was predicted to exceed last year. $1.1 billion Image: Twitch Some sports teams have turned to virtual sports and live-streaming to engage fans online. #5 Virtual sports: The future, today. , meanwhile, also makes it possible to sustain fan engagement in spectator sports like and cycling during the pandemic. Virtual sports car racing A held last year used the Zwift indoor cycling platform to tap into cycling fans’ love of technology and tracking vital statistics by showing viewers the competing athletes’ heart rates and power in real time. And the category is already gaining traction with consumers: almost watches virtual sports. virtual Tour de France one in five Millennials Image: The Connexion Cyclists competed in a virtual Tour de France last year using the Zwift virtual cycling platform. #6 Fans reward teams that offer great digital experiences. Sports teams are likely to benefit from their efforts to go digital, because digital transformation is linked to higher fan satisfaction and engagement . Over 60 percent of fans polled in “agreed that having a great ‘year-round experience’ would make them more likely to become more engaged with their team in the coming season,” and 55 percent of respondents attested that a fuller fan experience “would make them more likely to purchase a ticket in the future.” one survey Nearly three in four go to more games after a positive interaction with digital fan engagement. “avid fans” Digital transformation is also associated with increased spending on team merchandise - almost half of the fans polled in the survey “ on team merchandise following a good tech-enabled experience.” often increased their spending Summary The COVID-19 pandemic has upended the way sports organizations around the world connect with their fans, and dealt a serious financial blow to the sports industry. Moreover, fans are wary of returning to stadiums amid the crisis, and may not flock to sports games in pre-pandemic numbers even when it is safe to do so. Doubtless, the sports industry requires new ways to shore up its financial health during this period of uncertainty and beyond. Aves Lair believes that digital transformation presents a viable path forward for the sports industry, both in terms of sustainable revenue generation and fan engagement. Sports teams can use digital transformation to utilize their brand rights and monetize their data, providing new revenue sources; while connecting with supporters year-round using digital technology, including streaming platforms and club apps. Sports teams that have embraced their dual role as both content creators and distributors, or ventured into the world of esports and virtual sports stand to reap major dividends from their digital transformation. Positive digital experiences mean happier, more loyal fans who spend more on the club they are passionate about - which should motivate the sports industry in this time of profound changes and challenges. By John Payne for Aves Lair Blocksport is a fan engagement technology startup and member of Aves Lair’s 2020 winter accelerator cohort specializing in white-label platforms for the sports industry, unlocking new revenue sources and data for sports teams and bringing clubs and fans closer together. Contact info@blocksport.io to learn more about Blocksport’s white-label solutions for the sports industry. To learn more about Aves Lair and the Aves Lair accelerator program, visit aveslair.com , or follow us on LinkedIn and Twitter .

Activision Blizzard

Funding

Microsoft

Nationwide

Twitter

An Insider’s View on Digital Asset Opportunities for Institutional Investors

Aves Lair Announces Three Startups Comprising Inaugural Accelerator Cohort 

Too Long; Didn't Read

Get Free Unlimited IP Geo Data With IPinfo Lite

Sports Teams Need To Embrace Digital Innovations to Regain Engagement and Revenue Lost to COVID-19

About Author

Comments

TOPICS

THIS ARTICLE WAS FEATURED IN

Related Stories

Untitled Story

An Insider’s View on Digital Asset Opportunities for Institutional Investors

10 AR Agencies to Follow in 2020: From Talking Business Cards to Explorable Paintings

121 Stories To Learn About Coronavirus Impact On Business

3 Digital Tasks SBOs Can Tackle While Working From Home During Shutdown

278 Stories To Learn About Covid 19

An Insider’s View on Digital Asset Opportunities for Institutional Investors

10 AR Agencies to Follow in 2020: From Talking Business Cards to Explorable Paintings

121 Stories To Learn About Coronavirus Impact On Business

3 Digital Tasks SBOs Can Tackle While Working From Home During Shutdown

278 Stories To Learn About Covid 19

Light-Mode

Classic

Newspaper

Dark-Mode

Neon Noir

Minty

HN StartUps