Sport is currently facing some unique challenges that can radically change the industry for many years to come.
Predicting what the future may hold is not an easy task, with clubs and leagues striving to navigate through an unprecedented set of circumstances.
Empty stadiums, shifting consumer habits, and funding difficulties are among many factors that sports organizations are dealing with.
Read on as we look at some of the critical issues facing sports organizations at both the top and further down the scale.
The Empty Stadium Conundrum
Playing games behind closed doors present a major challenge for sports with a business model based on fans being allowed to attend.
For instance, Major League Baseball franchises rely heavily on income from fans and investment from big brands to keep themselves afloat.
With the ‘in-game’ connection lost, clubs such as the Seattle Mariners have had to invest in digital advertising to link corporate partners with supporters.
The Funding Challenge
Although playing in empty stadiums has allowed sports to return, the reality is that this will not be sustainable in the long-term.
The appeal of sports for sponsors is the access it gives them to fans, and maintaining the same level of engagement in a solely digital environment is a challenging task.
There is also the question of the venues themselves to consider, with every stadium and arena reliant on footfall and secondary spend to make the numbers add up.
Many of these businesses have lost huge sums of money when closed, and opening up with limited capacities presents another costly set of challenges.
In some jurisdictions, there has been no funding support from governments, leaving the future of many venues hanging by a thread.
The Relevancy Issue
While the bigger leagues have been able to find ways to operate behind closed doors, organizations lower down the ladder haven’t been so lucky.
In the United Kingdom, ice hockey is the most-watched indoor sport, but clubs cannot operate without fans in attendance.
Nottingham Panthers’ owner Neil Black recently confirmed that the club had already lost £250,000 due to the Elite League season’s early curtailment, and further losses are anticipated.
Black also noted that running with a reduced capacity for the 2020/21 campaign isn’t viable, placing the whole future of the league in doubt.
All of this leaves the Panthers and other clubs with a fight to stay relevant in a landscape where fans may be inclined to turn their attention towards other activities.
The Digital Shift
Some leagues may well survive without fans in attendance, mainly if they can fully leverage digital technologies to their advantage.
Consumer habits have shifted significantly over the past few years, with people increasingly using digital platforms to engage with sport.
While many experts argue that sport without fans isn’t the same, organizations must explore new ways to reach people to stay relevant.
Augmented and virtual reality applications offer a wealth of possibilities, especially for the leagues and clubs who can monetize these mediums.
Digital content-led sponsorships and leveraging football apps and live streaming are other revenue streams that may well become much more prevalent as sport embarks on a different future.