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Reshaping and expanding revenue generation models in the Sports industry

By Borja Burguillos

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We initiate our article series in our new Valora blog to talk about the future of our industry and what are the main challenges we have ahead.

I’ve been very active speaking with Clubs, Medias and Leagues about the impact of Covid in the industry and the future. I went through the 2021 outlook report for the US sports industry prepared by Deloitte and I do agree on most of it so I would like to condense the main ideas and takeaways. I strongly believe that 2021 is a pivotal year—challenging fans, athletes, broadcasters, teams, and leagues alike in new and unexpected ways.

Following the Deloitte report, we have identified Three critical issues for the sports industry to consider in 2022 and beyond. Today I want to talk about the first one, “reshaping and expanding revenue generation models”.

Reshaping and expanding revenue generation models.

One of the biggest sources of alternative revenue for the Sports organizations in 2021 and beyond could be data monetization, particularly in the areas of fan engagement, player and team performance, and sports betting. The market for data-wranglers and aggregators is heating up as organizations increasingly employ data analytics to guide decision-making and support their marketing efforts.

Key opportunities for growth

  • Expanding novel partnerships, that allow one or more technology companies to showcase their products while improving the fan experience. Organizations should consider breaking away from traditional category management, especially in the area of technology, and develop complex stories and platforms in which multiple vendors can participate.

  • Attracting private equity investment, to address revenue shortfalls and working capital needs.

  • Growing the fan base, by meeting the needs of groups that have not traditionally participated in or followed the sport.

Key challenges to overcome

 

While data monetization represents a significant opportunity for sports organizations, it does require a sizable infrastructure investment to generate the desired impact. These costs (for everything from data collection to potentially purchasing third-party data) can be hard to justify unless an organization truly understands the potential return on investment.

Actions companies should take now

 

  • Prioritize investment in digital infrastructure, people, and processes pertaining to fan data.

 

  • Build broader business acumen across your teams, along with considering non-traditional partnerships that bring outside perspectives.

 

  • Be willing to be bold. Use today’s challenging environment as an opportunity to try new things.

Strategic questions to consider

 

  • What technologies (for example, data infrastructure technologies or in-stadium data collection) can enable new revenue opportunities?

 

  • Do you have a coherent and comprehensive strategy for monetizing fan and athlete performance data? How could you implement that strategy more effectively?

 

  • What learnings can you take from other sports organizations and/or other industries that have done a good job driving new revenues since the start of COVID-19?

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