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2021 Sports Outlook

2020 changed the game for sports. What’s next?

Our eighth edition of PwC's Sports Outlook for North America reflects the challenges of 2020 and the pandemic, which ripped its way through sports, leaving concurrent public-health and social-justice challenges in its wake.

In addition to a broad overview on key sports leagues, this year we have included three “playbooks” for sports executives to consider in 2021 and beyond, including overviews on: 

  • Revenue recovery and growth options

  • Sports betting as an accelerator to bolster fan engagement in a more virtual world

  • Diversity, equity and inclusion for employees, communities and fans.

State of the industry 

Each professional sports league approached the challenges of 2020 differently. There are common themes for 2021, however, including:  

  • Liquidity issues requiring teams to consider increased borrowing or selling minority interests to other investors

  • Revenue-generation issues related to gate, premium seating, parking, concessions, etc., as well as how to make up revenue gaps 

  • Ripple effect into the media business (jobs and revenue) and communities that rely on the sports industry for their livelihoods 

  • Increased costs related to testing of players, coaches and employees, reconfiguring venues to ensure safe distancing as well as cleaning and disinfecting venues

There are also potential opportunities, including:

  • The expansion of advertising

  • The use of technology and creative measures to increase fan engagement

  • Growth in media rights revenues

  • Sports betting as an alternative revenue stream 

  • Navigating a social justice plan of action that unifies fans, teams and local communities

Revenue Playbook

Revenues in the sports industry have always been close to recession proof, but no longer. During the initial gap in play across major sports in 2020 — from mid-March until May— the COVID-19 pandemic put a halt to live content in the sports industry, significantly impacting advertising, distribution and, of course, gate revenues. 

But much like a top seed challenged by an underdog in the first round of a bracket tournament, the sports industry can look beyond the pandemic with a survive-and-advance approach. Revenue recovery will depend on new strategies, including fan experience beyond the gate.

How can leagues get there?

Betting Playbook

The sports industry experienced multiple points of disruption in 2020. But a potential bright spot for 2021 — and beyond — will be continued growth of the US sports gambling market and the strategic revenue opportunities it could create for teams, leagues and their partners.

While multiple opportunities exist, strategy is key to success. Top considerations for 2021 are:

  • If you haven’t yet, now is the time to help inform and shape upcoming regulation at state and local levels. 

  • Sports betting has the potential to transform both digital and in-stadium fan experiences, as well as top-line growth. To best capture this growth, take a holistic look at how gaming plays a role across all your customer connection points. 

  • Data, data, data. The critical piece that may be missing from (or underdeveloped) within your strategies.

Social Justice Playbook

In professional sports, with athletes of color largely in the majority, social justice issues continue to be intertwined with the business of sports. More than seven in 10 sports fans (71%) support teams and athletes who speak out on issues of social justice and racial equality according to a recent ESPN survey, yet there’s no unified approach on how leagues and teams seek to address issues of diversity, equity and inclusion (DEI) in their organizations. 

What does this mean for leagues, teams and brands? At its core, DEI represents an evolution in the DNA of an organization. Brands and corporate entities should identify their values and principles, while acknowledging that taking a side will raise awareness and support, but might also alienate some fans or customers.

After identifying your guiding principles, the next step is to look toward purpose-led behavior: 

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Michael Keenan

Managing Director, Sports Practice Leader, PwC US

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