The world of sport is changing fast. Wherever you look, the industry is transforming: fan habits are evolving, games are getting more diverse, sport media is being reimagined, and the sector is becoming increasingly global, attracting billions of dollars in investment. It’s a hugely exciting time: who would have thought ten years ago that a Netflix show would bring in more than a quarter of Formula 1 fans, or that a Women’s Euros match would break TV viewing records?
Against this backdrop, organisations in sport are rushing to formalise and professionalise their approach to growth. And, from a leadership and strategy perspective, many businesses are beginning to think more deliberately about how sport fits into the wider consumer ecosystem. Over the past few weeks, I’ve sat down with leaders from across the sport industry, to explore how the sector is evolving and discuss future leadership considerations.
If you’re a sports fan, you’ll have noticed a sea-change in the way we consume sport over the past few years. Today, it’s a small proportion of fans who watch live games, and an even smaller minority who pay to watch in-person. In the US, a recent study found that half of fans between 18 and 34 prefer watching highlights to full games – with many relying on Instagram or Twitter for their sports coverage. And it’s not just the games: on social media, behind-the-scenes insight into individual sportspeople has fostered a culture in which more and more young fans follow players, rather than teams.
The industry is also globalising at a rapid rate. The English Premier League is one of the fastest growing sports in the United States, for example. And in the US, the National Basketball Association and the National Football League are desperately trying to crack Europe and Asia for sources of growth.
For sports organisations, the challenge now is how to adapt within this new landscape – to attract new fans through content, and to cater for different cultural demographics. As part of this, there are lessons to be learnt from the consumer sectors, particularly about customer or fan centricity. “I think the organisations that are doing the best job,” said Claire Cronin, former CMO at McLaren Racing, “are the ones taking a really long-term view on the end-to-end lifecycle of their fans, and treating them a bit more like traditional customers.”
Central to this approach is really getting to understand the fanbase. Historically, sports businesses have not prioritised customer data or analytics – in large part because of the built-in loyalty which comes from being a fan. “Coming from retail, joining sport was like going back in time,” recalled Martyn Philips MBE, currently Chairman of Premiership Rugby, who joined Welsh Rugby Union as CEO from B&Q in 2015. “We didn’t understand our audience nearly as much as we should have done. We were so light on data, and there was very little segmentation.”
In an industry where teams have hundreds of millions of fans all around the world, harnessing customer data – and using it to inform marketing and other business decisions – could be truly transformative. “In my world, we do not have an awareness issue,” said Ellie Norman, Chief Communications Officer at Manchester United. “But what I’m looking to do in my role is use data to drive fan relationships at scale, making sure our fans are known to us, and deepening their engagement in the club.”
There are also opportunities around branding. “Brand can be seen as quite a dirty word in sport,” suggested Ellie, “but there’s a real bravery required to cut through the noise.” Claire Cronin echoed this view, recalling her early days at McLaren Racing when she encouraged her team to adopt a more consumer-focused mindset: “one of the first questions I asked was: why is the team kit white, when our brand colour and car livery is papaya? Moreover, the data from our own website showed the top seven items of fan apparel were all papaya, so it was clear there was demand for it. Off the back of that conversation, we changed both the team kit and fan replica kit from anonymous white to recognisable papaya. I remember visiting Silverstone, and how proud the race team felt when they saw a whole sea of papaya shirts in the stand. Fans wanted to be part of our tribe and were willing to pay good money to advertise their loyalty to McLaren.”
“Brand can be seen as quite a dirty word in sport, but there’s a real bravery required to cut through the noise.” – Ellie Norman, Chief Communications Officer, Manchester United.
As priorities change, so too does the talent landscape. Traditionally, the industry has attracted sports fans into management roles, many of whom stay within one company or sport for their whole career. While this trend breeds passionate leaders, it can also have a limiting impact on the sector – discouraging high-potential candidates who may not be fans from entering the industry, and allowing for strategic blind spots.
Bringing in talent from the adjacent consumer sectors can bring much-needed customer centricity, and create better conditions for challenge, innovation and change.
Mark Darbon, CEO at Northampton Saints, began his career at Diageo before leaving the consumer industries to take up a senior role at the London Olympics. “There are so many parallels between consumer industries and sport, especially when it comes to standing out in an increasingly cluttered world and attracting in new consumers,” he told me last month. “At Diageo, we were very focused on getting under the skin of our stakeholders – be it consumers or customers – and this put me in great stead to work on the Olympics. The Olympic Games were all about delivering a brilliant experience for a complex web of stakeholders, from athletes and spectators to broadcasters and sponsors. In the consumer sectors, understanding who you’re delivering to is crucial – and applying this mindset to sport is hugely beneficial.”
Of course, there are some fundamental differences between sport and the consumer arena which bring challenges for leaders migrating between industries. Every leader I spoke with for this column touched upon increased levels of scrutiny within sport, and the emotionally-charged reactions decisions can trigger from fan communities. “Nobody’s talking about a retailer’s financial results in the pub,” said Martyn Philips, “but everyone has an opinion on the choices leaders make in sport. It takes some getting used to – but I just treat it like free consumer research.”
“Nobody’s talking about a retailer’s financial results in the pub, but everyone has an opinion on the choices leaders make in sport” – Martyn Phillips, Chairman, Premiership Rugby.
For CEOs coming in from the consumer sectors, there’s the added need to balance commercial and club leadership – especially as a club’s financial fate is often tied to its athletic performance. “You have to be comfortable that you can be responsible for how you’re performing on the pitch,” said Mark Darbon. “At Northampton Saints, I’m not going to coach from the side-lines, but I have to be able to provide direction. It’s about creating accountability, and fostering an environment where your performance departments can succeed.”
I’m excited to see what’s next for the sports industry. As new concepts, games, and formats emerge, the winning businesses will be those which can stand out in an increasingly cluttered landscape. Reframing how sports companies think about their fan base – and applying a specifically customer-focused lens – could make all the difference in the years ahead.