By the end of the next decade, sports begins to reach its full potential in the global market, and the top franchises in soccer, basketball, and baseball reach valuations over $10 billion. The differential between franchises that cash in and those that get left out will become more extreme. Soccer, which is the dominant global sport, thrives despite this disparity between the winners and losers: the top five Premier League teams are approaching household-name status in the United States. Few Americans have heard of the bottom 15. The exposure of widespread corruption in the operations of FIFA will result in far-reaching reforms that, once complete, will accelerate the sport’s growth. But while those reforms are being made, other sports looking to expand their global footprint have an opportunity to appeal to disenchanted fans around the world.
-
01
Three billion new potential sports fans are expected to come online via smartphone by 2020.
Global television live audience size:
-
1B2014 World Cup Final1 billion viewers
-
900m2012 London Olympics Opening Ceremony900 million viewers
-
500mManchester United vs. Liverpool 2014 regular season500 million viewers
-
360m2014 Champions League Final360 million viewers
-
160m2014 NFL Super Bowl160 million viewers
Some of the same dynamics that drive block-buster bets on creative content also foster investments in superstars…Growing international markets in film, television, and other media are driving an increased focus on a select few superstars with global appeal. In sports, the expanding role of television and other media as additional sources of revenue (as opposed to ticket sales only) has significantly increased the income earned by the top-performing teams — and sometimes just the most star-studded teams.
Anita Elberse
Lincoln Filene Professor of Business Administration at the Harvard Business School
Author, Blockbusters: Hit-Making, Risk-Taking, and The Big Business Of Entertainment
DisruptionWinners Take All | OpportunityA full array of financial controls — from salary caps to revenue-sharing to Financial Fair Play— successfully fine-tune competitive balance to keep things interesting. | |
DisruptionMust-See TV | OpportunityTime zones around the globe create significant protection. European basketball fans might want to watch the NBA rather than the Euroleague, but few Europeans are awake at 2 a.m. to watch. | |
DisruptionAsia | OpportunitySports entertainment is a luxury business, and the Asian markets are happy to import their bling. |
-
FootballFew outside North America play it or watch it.
-
BasketballWeaker NBA teams stay on the bottom too long; 75% of the teams are irrelevant come playoff time.
-
BaseballRelating to a younger audience that wants the game to move more quickly with more action.
-
SoccerConverting World Cup interest into domestic league interest.
-
HockeyNeeds to be a better television experience — the puck is hard to follow, and viewers can’t follow the line changes.
Will financial inequality within leagues destroy competitive balance?
Not necessarily. It all depends on the “upset frequency” of the sport. The drama created by uncertainty provides a compelling reason to watch and attend the games. Pro football has the lowest upset frequency of any major sport — so the NFL needs its salary cap to engineer parity and stoke the drama. Meanwhile, Major League Baseball has a high upset frequency; despite financial inequality, the uncertainty of who will win is still compelling.
The Vectors of Global Brand Building
Yes, winning drives global recognition. (With 11 championships, the Lakers are by far the most popular basketball team in the world.) But if you’re not hoisting trophies regularly, how can you grow your audience worldwide?
Hire international players
Asian baseball stars in the MLB like Masahiro Tanaka and Yu Darvish generate fan interest back home. Twenty-six percent of the players in the NHL are from outside North America, which drives interest in the league across Northern Europe. The question is, which American sports league will move the most quickly to integrate players from Asia, Europe and South America?
Market rivalries
Everywhere in the world, people understand the significance of rivalries. These monumental matches become a war of ideas, history, and lifestyle. Lakers vs. Celtics. Red Sox vs. Yankees. Bruins vs. Canadiens. Barcelona vs. Real Madrid. All Blacks vs. Springboks in rugby. India vs.Pakistan in cricket. Teams battle for supremacy of their state, their metropolitan area, their country. Since everyone can relate, these matchups make sense to even casual fans across the oceans.
Tour and tour some more
The MLB has hosted regular season games in Japan, Mexico, Puerto Rico, and Australia. The NFL goes to London. European soccer tours the US in the summer. Exhibition games and international friendlies go a long way — especially if a team makes the trip several years in a row.
Sell team values
- Seattle embraced grunge music, then premium coffee, then made same-sex marriage and pot legal. So the city that loves being “alternative” is a perfect fit for the alternative sport, soccer. Sounders FC attendance has broken all US records.
- Working-class teams with “lunchpail” players may seem less relevant in an era when fewer workers are blue collar. But hiring hardworking players and emphasizing solidarity and gritty defense still fits historic working-class cities — even abroad, from Newcastle to Marseille to Dortmund to Turin.
Pimp the stars
Even if his team has a losing record, a single star player can help a team get global recognition. Star players are a vector by which small-market teams and upstart leagues (like Major League Soccer) can gain international renown. Stars who cross borders have an elevated global appeal.
Be larger than life
In the cosmopolitan cities, the lifestyle of celebrity culture can be embraced as an escape from it all. Players’ and owners’ big personalities and opulent lifestyles can be highlighted to draw the fans whose appetite for the rich and famous is endless.
Predicting the Future
-
1-5 Years
The Tinkering Phase
-
Globalization continues to happen more slowly than expected. During its exhibition season, the NBA champion plays in a one-week Club World Championship against the top teams of Europe. The NHL All-Star Game is played in Russia. London and Mexico City are granted NFL franchises — but not to start play until 2028.
-
5-10 Years
The First Disruption
-
Some rules standardize internationally — Japanese baseball adopts the larger MLB ball, while European basketball adopts NBA rules. These have a similar effect to standardizing the width of rail lines and the size of shipping containers — it makes global player movement possible. The NFL opens in London and Mexico, but by the time it finally happens, it’s almost anticlimactic. Then, an unexpected, seminal disruptive event happens. It could be any number of things. But it creates a significant global shift in professional sports. Some possibilities:
- During a future labor contract strike, NBA players stay sharp playing in China, earning double what they’d make here; many end up staying, splitting the NBA’s talent pool.
- To prevent brain trauma, NFL rules on tackling change radically, prompting an increasing number of rugby stars to make the transition to American football. The NFL’s popularity booms in Oceania and Europe.
- Scoring in soccer becomes so rare that the game’s appeal plummets, creating an opportunity for other sports to expand into soccer’s territory, winning over fans with more scoring and action.
- Taking advantage of genomic screening or medical manipulation, China starts cranking out superathletes who are faster and stronger than athletes in the rest of the world. (See The Athlete)
-
10-25 Years
Global Consolidation
-
Intercontinental or global leagues fully develop. Even though any one team’s players might be from many countries, the games take on that nation-vs.-nation excitement we know from the Olympics and World Cup. Extensive alliances are created to minimize business risk and control player development and movement to the superteams. Eventually, these coalesce across sports; superclubs in major global cities have pro teams in each viable sport.