The Trends That Will Reshape Sports Fandom Over The Next Decade

If you are not a subscriber of Huddle Up, join 56,000 other professional athletes, business executives & casual sports fans that receive it directly in their inbox each morning — it’s free.

This Email Is Sponsored By…

Eight Sleep is one of the best purchases I’ve ever made.

I have been sleeping on their thermo-regulated Pod Pro Cover for more than a year, and it has made a significant impact on my overall health. I fall asleep faster, get higher-quality sleep, and wake up feeling well-rested and energized — it’s a total gamechanger.

So join me and thousands of pro athletes and CEOs—Francis Ngannou and Lewis Hamilton sleep on an Eight Sleep—and get an Eight Sleep Pod Prover Cover today.

Hey Friends,

There are a few trends emerging among professional sports leagues and teams globally. These trends have been accelerated and prioritized due to COVID-19, and I think they will probably reshape the fan experience over the next decade.

Here are two specific examples:

1. Sports organizations (leagues & teams) will prioritize international expansion, leading to increased revenue opportunities and a more global fanbase.

2. Sports organizations (leagues & teams) will become entertainment properties, dedicating time, money, and resources to exclusive content that they can appropriately monetize and use to organically promote their business.

Both of these are already happening. But I think only the smartest leagues and teams have really focused on it, and others will soon be forced to follow.

Let’s start with international expansion. This one is pretty obvious. Most professional sports organizations, both the parent league & individual teams, have historically catered to a local fanbase. This makes sense — they are the people buying season tickets, drinking beers at a game, and purchasing their favorite player's jersey.

The Green Bay Packers, for example, are the only NFL team to release a financial report each year publically, and it typically shows that ~40% of their $500M+ in annual revenue comes from local sources (tickets, concessions, merchandise, parking, etc.).

The rest comes from the NFL’s multi-billion-dollar national TV broadcast deals.

But this is changing rapidly. Everyone talks about the digital world and the metaverse like it is a decade in the future, but the reality is that we are living in it right now.

The average internet user spends more than 7 hours online each day. They check their phone once every four minutes (344 times per day), and they now have more friends in the digital world than they do in the physical world (Twitter, Instagram, TikTok, etc.).

And I don’t say that in a super depressing tone. Daily sunlight and in-person conversations will always be necessary. But the multi-decade shift to a digital world has undoubtedly been a positive — geographic boundaries have been shattered, the walled garden of higher education has been broken down, and there has never been a better time in history to be an entrepreneur attempting to create value in the world.

So it’s only natural that professional sports leagues and teams take advantage of this also. And no, I’m not talking about mobile tickets and using Apple pay at the stadium.

I’m talking about the ability of professional leagues and teams to truly go global.

The NFL is a good example. They have been playing games in London since 2007 and recently expanded their schedule to host games in Mexico and now Germany also. They announced rights for 18 teams to market their brand in 8 countries, and they even hired GMs for UK and Australia with one goal — to grow the league’s existing fanbase of 150 million international fans by 50 million within the next few years.

Formula 1 is another excellent example. They historically cater to a European-based audience. But after not hosting a single race in the United States from 2008 to 2011, they have since expanded to three US Grand Prix’s starting next year — that’s more than any other country in the world.

None of this is by accident. Many of the world’s largest sports leagues have dedicated time and resources to international expansion, including the NFL, NBA, Premier League, Formula 1, and others. But the shift is now happening on a team level also.

AdAdge released an excellent article last week breaking this down. The example they used was Club de Regatas do Flamengo — a Brazilian soccer club that has 40 million fans and regularly sells out their 78,000-seat stadium in Rio de Janeiro but has since decided to invest resources into developing & promoting its brand internationally.

They hired the international sports marketing agency Sportfive to work on this, and the German firm now has a client list that includes the New York Jets, Los Angeles Lakers, Chicago Bulls, Borussia Dortmund, Atletico Madrid, and several others.

The goal for each of them is simple: To grow the team’s international fan base.

This will end up providing several benefits. The brand becomes stronger. The fan base widens horizontally and continues to grow vertically, and the individual teams will be able to develop entirely new and lucrative revenue streams over the next few decades.

Level Of Interest In The NBA In Select Countries (Statista)

Now let’s move to point #2 — the idea that sports organizations will become entertainment properties, dedicating time, money, and resources to producing exclusive content they can monetize and use to promote their business organically.

Again, this is already happening in a specialized manner. But I think the trend will grow tremendously over the next decade, and there are several reasons for that.

First, content is king. Everyone knows that. But with the shift to streaming globally, exclusive, sports-based content has quickly become even more valuable.

I’m talking about Netflix’s deal with Formula 1 for “F1: Drive To Survive,” ESPN’s release of Michael Jordan’s docuseries “The Last Dance,” and even HBO’s new series detailing the 1980s Lakers dynasty called “Winning Time: The Rise of the Lakers Dynasty.”

These are all award-winning productions. They are well-made. But the economic value can’t entirely be credited to the cinematic outcome. Instead, it has more to do with the fundamental imbalance in streaming’s supply & demand equation.

Streaming services are at war when it comes to customer acquisition. It feels similar to what we have seen in the sports betting market, and they are each individually spending billions of dollars annually to acquire the best content and attract customers.

For example, Netflix spends over $15 billion annually on content production and licensing. And most equity analysts believe for the business to continue to grow at its current rate, Netflix could eventually reach $50 billion in annual spending.

Of course, some sports organizations have already realized this. The NFL does a great job with its media arm. And Formula 1 might not get a $100 million check from Netflix, but the value they received in return via growth in North America has certainly been worth it — you could probably even argue that they should pay Netflix :)

But again, I think this will start trickling down to the individual team level also. For example, the NBA’s Golden State Warriors recently launched Golden State Entertainment, a new affiliate company that will “create original content rooted in the worlds of sports and entertainment.”

NBA rules don’t allow them to produce and monetize content on their current trio of star players, but they plan to use historical footage and create value by building a wholly encompassing digital sports platform that now includes a production arm.

And as this space continues to grow, I think other sports organizations globally will look back on this decision by the Golden State Warriors with envy.

Lebron James’ company SpringHill was recently valued at $725 million. Kevin Hart just sold 15% of his media company at a valuation north of $650 million, and Reese Witherspoon sold her media company Hello Sunshine for $900 million last year.

These sales aren’t going to get any smaller, and the valuations will only be more significant. So if you are a global sports organization with access to premium content and a passionate community, I think it probably makes sense to expand your platform to include studio production of original content that can be distributed at scale.

We’ll see what happens. But I think this is a trend worth watching.

I hope everyone has a great day, and we’ll talk tomorrow.

Your feedback helps me improve Huddle Up. How did you like today’s post?

Loved | Great | Good | Meh | Bad

The Joe Pomp Show: New episode with Nicholas Horbaczewski is live!

Nicholas Horbaczewski is the CEO & Founder of the Drone Racing League (DRL), the world’s premier professional drone racing property. Before founding DRL in 2015, Nick served as the Chief Revenue Officer of Tough Mudder, which he grew to over 60 global events and $100mm in revenue during his time there.

Listen, subscribe, share, and enjoy!

The NBA’s $450,000 Fraud: A former Phoenix Suns employee has pleaded guilty to illicitly selling more than 2,800 of the team’s tickets for $450,000 over three years.

Today’s video breaks it down. So check it out, subscribe to my channel, and enjoy!