While not unexpected, the crypto crash has drained faith in a sponsorship revenue source that rights holders were planning to milk into 2023 and beyond, putting pressure on partnership executives to go back into the market next year – albeit with greater due diligence.
That could prove challenging at a time when brands are tightening their marketing budgets in anticipation of a looming recession, meaning there will be added onus on rights holders to be flexible with their inventory and create more bespoke packages that deliver against their partners’ objectives. Fail to do that and I suspect some businesses will be prepared to walk away from the negotiating table with more established, premium properties to pursue the growing number of options available to them.
Indeed, the audience for women’s sport is only increasing and the addition of expansion franchises in major leagues coupled with new competitions, such as the Women’s Indian Premier League, will create more opportunities for sponsors to invest. Emerging sports like padel and pickleball, meanwhile, could similarly represent a more cost-effective way for businesses to connect with growing and highly engaged communities. Then there is also the metaverse, where in 2023 brands will continue to acquire virtual real estate and experiment with gamified virtual activations that help them reach new demographics.
More specifically, my guesses are that 2023 will deliver a naming rights sponsor for the Tottenham Hotspur Stadium in the form of a technology company; Nike won’t be able to resist the temptation of adding a fourth men’s US major league to its portfolio so will sign a uniform deal with the National Hockey League (NHL); and we’ll see a Saudi airline – whether it be Saudia or the soon-to-launch RIA – become the shirt sponsor of a major European soccer club.
Adidas has confirmed that it won’t be renewing its league-wide kit supply deal with the NHL
If the story of sports technology in the two preceding years was about keeping the lights on and adapting to unique circumstances, then 2022 delivered a much clearer idea of where the sector is going in a post-pandemic world. The narrative of 2023 will be about the relative maturity of innovations that many believe will transform the industry.
This will be the year that Web 3.0 grows up – it has to. Unrestrained optimism during the first six months of 2022 gave birth to plenty of non-fungible token (NFT) projects, some of which had more merit than others. But this activity failed to quell scepticism and a wider crypto crash dampened enthusiasm and caused values to plummet.
The collapse of trading platform FTX in November has given plenty of ammunition to critics of blockchain-based innovation in sport, but there are signs that the industry is starting to understand the long-term potential of Web 3.0.
The acronym ‘NFT’ has all but vanished in official literature and we’re seeing more blockchain-based products and digital assets that claim to have genuine utility. We are seeing fewer projects without a defined purpose and expect to more of this in 2023. Video-based digital collectibles like NBA Top Shot have not been immune from the wider crash, but the anticipated launch of a Premier League-based collection will help establish the concept in the mainstream. Meanwhile blockchain-based fantasy games like Sorare will continue to gain traction – provided there’s no mention of ‘NFT’ anywhere.
As the sporting world realises that blockchain is more than just a cash grab opportunity, the most immediate benefit will be fan engagement. Web 3.0 has the ability to reinforce the idea of community at a time when social media is splintering and fandom is increasingly globalised. Owned and operated channels with a focus on membership are back in fashion, as demonstrated by the National Basketball Association’s (NBA) new application, while third parties like DAZN and OneFootball want to become all-in-one sports destinations.
However the metaverse will continue to struggle to find a clear purpose. Despite the vast financial and development resources being thrown at digital environments, a convincing use case has yet to appear. The best example so far has arguably been Roblox and its youthful audience. Perhaps the arrival of the Playstation VR2 and Apple’s rumoured smart glasses might provide the catalyst.
‘Roblox is the next immersive 3D social channels where fans can experience sport, have fun and really engage with their favourite athletes and content’ – Roblox’s Christina Wootton on the role metaverse platforms can play in reaching young audiences #SportsBiz
Never has it been more acceptable, necessary even, to grease the wheels of the sports business with cash from outside sources. External investment has long propped up the industry, of course, but the need to ensure liquidity in uncertain economic times has forced more sports organisations to seek new, occasionally dubious sources of capital.
That won’t change in 2023.
‘For Sale’ signs adorn the doorways of sought-after real estate across the world’s top leagues. Premier League giants Liverpool and Manchester United, the National Football League’s (NFL) Washington Commanders, the NHL’s Ottawa Senators, the NBA’s Phoenix Suns, the Portland Thorns and Chicago Red Stars in the National Women’s Soccer League (NWSL), the Bundesliga’s media rights business, Fifa’s soon-to-be-expanded Club World Cup and English cricket’s The Hundred are all on the market in some form or another. No doubt there are many more owners across the globe courting capital away from public eyes.
Each of those aforementioned organisations will welcome new owners and investors next year, so expect a continuous swirl of speculation as private equity circles, consortiums materialise and billionaires of varying persuasions put their representatives to work.
Indeed, for all the talk of consolidation in the media space, 2023 will be the year when inward investment ramps up and sport’s ownership landscape fragments still further. An already intricate, interrelated web of interests will only grow more complex as more and more chunks of sport – from commercial rights divisions to production studios and entire competitions – are spun off and carved out, creating new opportunities for prospective buyers to snaffle a slice of the industry.
Rights holders who own their IP outright will benefit most in 2023, but their number will dwindle as the big sell-off continues.
Reigning champions the Portland Thorns are one of two NWSL franchises up for sale
Too many times this year have head and heart been in conflict. The childlike giddiness a top event such as the recent Fifa World Cup usually brings was swiftly offset by the sobering realisation that things were not as they should be.
Soccer’s showpiece tournament brought a well-documented litany of controversies, tainting an event designed to foster goodwill and unity. Indeed, Qatar 2022 merely caused further divisions between Fifa and many of its member associations.
The World Cup is not an isolated incident, with the Beijing 2022 Winter Olympics also proving polarising. The frustration, though, hasn’t just come from the stances countries including Qatar and China took on human rights and alike. The failure of governing bodies to provide sufficient reassurances on key decisions, be it hosting duties or sponsorship contracts, caused major reputational damage. That needs to change and a more transparent approach is required.
You can’t please everyone. And while the likes of Fifa and the International Olympic Committee (IOC) with their global reach feel obligated to appease all, it simply isn’t feasible. This is not about alienating certain groups. Rather, international sports organisations should adopt a position that is anchored on evidence, reason and good intentions. Doing so demonstrates decisive leadership and encourages collaboration with other stakeholders.
Occasionally, the smartest thing is to do nothing. But, in this instance, sport’s inertia on divisive issues cannot be allowed to continue.
The last time we undertook this exercise, I said the NBA rights chatter would heat up in 2022 ahead of the domestic rights deal the following year – and it has. While Warner Bros Discovery chief executive David Zaslav has tried to play down expectations, I expect that swollen media giant and Disney to lock up some big-money renewals with a much heavier emphasis on streaming. For Warner Bros Discovery, flexibility over where they can put the games will be key and I expect HBO Max to emerge with a significant role. There could also well be an entire digital-only package carved out for the likes of Amazon, too.
Elsewhere, I would be stunned if there is not a big uptick in the rights fee the Football Association (FA) commands for English soccer’s Women’s Super League (WSL). Sky and the BBC are currently paying UK£15 million (US$18.2 million) a year for their domestic WSL deal, but that expires at the end of the 2023/24 season. Off the back of some serious audience growth, neither broadcaster is in a position to complain about the value they have extracted from the current arrangement and should be called upon to cough up more when talks heat up in Q4.
Finally – the big one – we will likely see whether the aforementioned Warner Bros Discovery decided to double down on its €1.3 billion Olympics gamble from 2015. The tender for the 2026 Winter and 2028 Summer Games was issued in February, with bids requested by 25th April. Since then little has been heard about the process being overseen by agency giant IMG, apart from the European Broadcasting Union (EBU) stating its intention not to miss out (again). My feeling is that the winner will be whoever provides the most security for the IOC, locking in a deal covering the Games up to Brisbane 2032, and that in the UK the BBC will want more say over the digital rights than it is being afforded currently.
Will Warner Bros Discovery go big to retain its rights to the Olympics?
While money has always been a major driver in motorsport, multiple series will see investment take a front seat in 2023. Next season is set to be a pivotal year for those series that have decided to take the plunge and put their money where their mouth is.
Formula One has already invested a whopping US$500 million into its flagship Las Vegas Grand Prix. The investment is set to create a permanent hub in Las Vegas, highlighting its long-term intentions despite the three-year race contract. With Formula One also promoting the event itself, this is a risk unlike any taken by the series before but going all-in could see it win big in ‘Sin City’.
Likewise, Nascar is diversifying and adding a street race to its calendar for the first time in its history. July’s event in Chicago is already set to cost the stock car racing series US$50 million, but like Formula One Nascar is looking to embed itself in its chosen city for a long-lasting impact. Again, this event is likely to be a success with the amount of money behind it.
However, one series lagging behind is IndyCar, and this has clearly been noticed since it announced a massively increased marketing budget for 2023. The series is trying its hand at a docuseries in the lead up to next year’s Indy 500 but, as Dorna Sports has proven with its failed MotoGP Unlimited series, it’s not as simple as following the Formula One ‘formula’. This could prove to be a misstep in IndyCar’s wider strategy.
We surprised our drivers with some news earlier this year…
Do you think they’re excited? ?#F1 #LasVegasGP @Vegas pic.twitter.com/wkgI5FtP7a
Dyn Media, the German subscription streaming service set for launch in 2023, will offer a range of sports content outside of football across the DACH region, including Germany’s elite handball, volleyball and basketball competitions. The joint venture between long-time Bundesliga chief executive Christian Seifert and Axel Springer has recruited former German Football League (DFL) digital chief Andreas Heyden to lead the company. When it launches in 2023, expect the platform to build out its content portfolio, offering greater exposure for underserved sports.
2022 was another productive year for TikTok, as the short-form video platform signed a landmark title sponsorship deal for the Women’s Six Nations, and content partnerships with the Uefa Women’s Euros and National Hockey League (NHL). The appetite for original athlete content is greater than ever, and TikTok will continue to exploit this in the coming year. It’s more than likely the social media giant has yet to reach its peak.
Elsewhere the great schism at the heart of golf has dominated headlines this year, amid the ever-growing roster of PGA Tour players defecting to LIV Golf. The Saudi PIF-funded circuit will resume the role of the disruptor within the sport, as it eyes an expanded calendar in 2023, and will aim to flesh out its media rights portfolio after denying reports that it will be paying Fox Sports to broadcast its events in the US.
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