Sports – the most disrupted of all industries?

Today, we published the 2017 edition of PwC’s Sports Survey, an annual publication launched last year with the aim of measuring the pulse of the sports industry.

We asked a wide variety of sports industry leaders about the challenges and disruptive forces that are prevalent today. Our key findings back up the view that sports may well be one of the most disrupted industries out there…

Hot growth rates cooling off?

While industry leaders expect the sector to continue to grow, they believe annual growth rates will slow down from 8 to 6.4% over the next three to five years. This confirms that the sports industry is reaching a decisive inflection point, where sustained growth may well be the privilege of a few premium properties in the future.
These growth rates need to be taken with a pinch of salt, however, as they reflect the respondents’ subjective viewpoints. Historically, the sports industry has grown between 3-5% year on year. Nevertheless, the message is loud and clear: sports leaders no longer have sky-high confidence in the industry’s continued growth.

Changing habits, increased competition

More generally, 57% of respondents consider the shift in consumer behaviour among younger generations as the top threat faced by the industry. This comes as no surprise given how media is mostly being consumed nowadays, i.e. via mobile and on demand. In this “new” paradigm, sport finds itself in competition with an increasing number of alternative entertainment formats.

eSports on the rise

When looking at specific properties, eSports is seen as a key growth area, ranking as the second highest in terms of forecasted growth potential after football. This backs up the recent hype surrounding this format, which is ideally packaged for commercialisation among millennials.

Olympics facing challenges

The Olympic Games and winter sports, on the other hand, are showing signs of slipping down the appeal rankings of global sports properties. This is also evidenced by their apparent decline in TV ratings, especially among the younger population.
In the case of the Olympics, for example, NBC reported a 17% decline in ratings for primetime coverage of Rio 2016 compared to London 2012, with a steep decline of 25% among the all-important segment of adults aged 18–49.

VR here to stay

68% of respondents believe it to be only a question of time before virtual reality (VR) will have an impact on traditional TV broadcasting, thereby enhancing the sports viewing experience. Nevertheless, respondents expressed that further technological advances are needed if VR and AR are to reach their full potential in this regard.

To read more about the above findings, among others, click on the below link to download an electronic copy of the report, which includes deep dive features on the future of the sports rights market, wearable and sensor technology, and virtual and augmented reality. Happy reading!

Download survey

 

Contacts

David Dellea
Advisory Director
Tel. +41 58 792 2406
david.dellea@ch.pwc.com

Lefteris Coroyannakis
Senior Associate
Tel. +41 58 792 1578
lefteris.coroyannakis@ch.pwc.com

Published by

David Dellea

David Dellea

PwC
Birchstrasse 160
Postfach, 8050 Zürich
+41 58 792 24 06

David Dellea leads PwC’s Sports Business Advisory for Switzerland and is a founding member of PwC’s Global Sports Mega-Events Centre of Excellence. With over 10 years of experience in sports marketing, David focuses on supporting international governing bodies and rights holders with their strategic, organisational and commercial questions.