Data driven sports agency Two Circles has released a magazine, in which it predicts global sports industry revenues to reach $260bn by 2033.
Two Circles’ data delves into strategies for sports organisations to capitalise on future growth opportunities in the industry, which currently generates $159bn in annual revenues from sports IP owners.
The agency predicts that sports properties are projected to experience a Compound Annual Growth Rate (CAGR) of over 5% between now and 2033, overtaking traditional television in terms of revenue generated from advertising and subscriptions.
Gareth Balch, CEO and Co-Founder at Two Circles, commented: “By knowing fans best, sports organisations will build better sports products, experiences and opportunities, creating better value for everyone. Ultimately, the fans will be the real winners of this exciting growth in years to come.”
Zoning in on the growth, the agency predicts that while growth opportunities will be available across the board, the largest sports properties worldwide are expected to drive the expansion, with 55% of the top 20 organisations projected to outperform the market.
“As the global sports industry stands on the brink of this transformative growth, the Two
Circles’ magazine serves as both a forecast and a call to action. It is essential for sports IP owners to adapt, innovate, and focus on the fan experience to realise their full potential in the coming decade,” Balch added.
The magazine identifies three primary drivers set to propel this significant growth, the effects of which it says are already evident.
Primarily, there’s the idea of “more fans, more attention.” This means that as more people become fans of sports and pay attention to them, the value of sports content goes up. The magazine explores how to engage audiences with sports in new and exciting ways that suit different interests around the world.
The second primary driver is “diversified sports experiences”. The magazine predicts that sports will echo what we see in other forms of entertainment and that the industry is going to change to attract a wider range of people.
Two Circles explains that this means offering more types of experiences to appeal to different groups, especially casual fans, with the agency predicting that sports groups will start focusing more on entertainment and finding new ways to get fans involved.
Lastly, the report highlights “direct value capture”. It predicts that sports organisations are expected to focus more on making money directly from their fans and business partners.
The magazine explains that by building stronger relationships with fans and partners, organisations can capture more value and grow their business-to-business revenues, signifying a shift to create a more sustainable economic model for the sports industry.
The report emphasises that more sports properties will adopt Nike‘s multi-channel approach, focusing on direct-to-consumer (D2C) relationships to enhance fan experiences and create mutually beneficial business-to-business (B2B) partnerships.
Two Circles uses examples like the NFL and F1 to demonstrate how organisations can effectively leverage direct relationships to drive value and improve engagement.
Additionally, the publication examines the evolving landscape of media rights, along with the growing significance of college and women’s sports as brands recognise their value as well as how the influence of Name, Image, and Likeness (NIL) rights among college athletes continues to grow.
NIL has already been a big talking point this year, as the Tennessee Federal District Court prohibited the NCAA from restricting schools’ use of NIL guarantees as incentives to attend a member university.
Disregarding how or why sports revenue will increase dramatically in the next decade, Two Circles states that the, “biggest winners will be sports that give fans what they want, and know their fans best”.
