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Sports in 2021: 5 Questions the Sports Industry Must Answer

Sports in 2021: 5 Questions the Sports Industry Must Answer

by Naomi Owusu

Does the public still view mega-sporting events like the Olympics and FIFA World Cup in a positive light?  

The sports industry needs to make changes. Empty stadiums, tropical deforestation, sinking broadcasting and sponsorship revenue - the controversies are piling up. Upcoming events like the Olympics, the European soccer championships and other major sporting events won’t be able to operate as they have in the past. Sustainability, social responsibility, and digitalization – the industry must start to move in these directions.  

The People have Spoken: Are mega events still ethically justifiable?  

What do Munich and Boston have in common? Both cities have rejected major sporting events at the insistence of their citizens. Due to the pandemic, international tourism is viewed more critically by host city residents. Health concerns are not their only motivation, however. The financial costs are also extreme. The 2012 Olympic Games in London cost more than 13 billion Euros. The event itself was certainly exhilarating. However, the expenses for the bid, organization, and infrastructure far exceeded the original calculations. Granted, an event like the Olympics can boost tourism for a region. Yet, huge investments are most often solely put toward the staging of the event. Not enough money is budgeted toward useful, sustainable investments that actually support the local community.   

Concrete in the Rainforest: How environmentally sustainable are mega events?  

In both Sochi and the Copacabana, the World Cup and the Olympics brought more than just new stadiums and extensive infrastructure to Russia and Brazil. High-tech stadiums shot up overnight in previously untouched forests. New transportation infrastructure opened these remote regions to the public. Today, many of these stadiums are abandoned or are only used to a fraction of their capacity. Consequently, the newly built local infrastructure is also hardly used. What does remain is the ecological footprint. The construction of these facilities and their destruction of rare flora and fauna are the opposite of environmental sustainability. Concrete does not belong in the rainforest. Not only for nature’s sake, but for society’s as well.  

For the Sake of a “Solution”: Is rights fragmentation truly in the interests of the fans?  

In Germany, soccer fans need several streaming subscriptions in order to access all Bundesliga matches. Broadcasting rights of Champions League matches are also divided up, making things unnecessarily complicated and confusing. A look to the US demonstrates how sports broadcasting can still generate significant revenue without rights fragmentation. Games in the NBA, MLB, and NFL are broadcast via the leagues’ own Season Passes. These passes enable fans access to all games of the season live. Fans always know how and where they can watch their club's games. German fans on the other hand are openly frustrated with the current state of their viewing capabilities. While having numerous rights packages leads to higher revenues in the short run, it will surely lead to a reduction in the appeal of sporting events in the long run. Broadcasters and streaming services should not underestimate this risk.  

Corona and Beyond: How should the sports industry assume social responsibility?  

The sports industry still has enormous impact and reach. Despite the current situation, hundreds of millions of fans around the world are still rooting for their favorite teams. This is precisely why it’s important for these teams to set an example. This example is not set by merely providing new merchandise like masks, but through genuine social commitment projects. Corporate social responsibility is a crucial element of brand identity for companies like Oatly, a milk alternative provider, or outdoor specialist Patagonia. They use CSR to communicate their visions of sustainable coexistence on the planet. Because professional sporting events are still taking place, the industry benefits from a great deal of attention. This attention provides the perfect opportunity to draw attention to social causes. For example, 1. FC Nürnberg launched "Unser Club," a new digital community-engagement platform. Here, fans are rewarded with exclusive rewards for their social commitment by participating in local volunteering campaigns. Other clubs are also fulfilling their social responsibility with other similar projects. This is a step in the right direction! In the future, the sports industry must show more courage and create more innovative projects in this area in order to support the communities they represent and rely on.  

E-sports for Growth: How will the sports industry digitize itself for the future?  

The sports industry’s dependence on TV and spectator revenues became more than clear in 2020. Many clubs will have to deal with the financial shortfalls for a long time to come. For this reason, new digitization concepts and solutions are needed to bring fans and clubs together outside of game time. Sustainable, scalable revenue models for websites, apps, on-demand content, or voice formats like talks, are also necessary to establish a relationship with the fans. This connection is not only important in times of crisis. Digital storytelling within a club’s content strategy is especially important in times when fans hardly ever get to see their idols live. But a club's digitalization strategy must also include the expansion of e-sports. Fans and athletes are not only getting younger, but also significantly more numerous. It’s therefore not surprising that advertising and sponsorship revenues in this field are increasing. Platforms such as Twitch in particular are creating new revenue potential through micro-payments. For advertisers, e-sports is developing into a new lucrative source of revenue, the potential of which clubs must recognize for themselves.  

The sports industry needs new impetuses  

Broadcasting money and sponsorship revenues collapsed in 2020. Added to this are the financial shortfalls for major sporting events. From clubs, to organizers, to local tourism, the entire industry suffered during the pandemic. But should it have come to this? The situation of the past few months reveals the potential that has so far gone untapped. The sports industry has a duty to initiate and implement sustainable concepts. From ethical aspects to long-term digitalization - the need for sustainable solutions should have been considered more important before 2020.  A focus on sustainability is in the interest of those responsible and the fans! 

The sports industry must make changes in 2021 for its own success and for the sake of the society on which it depends!  

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