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Competition between sports for fans’ money and attention is increasingly fierce

by Ace Damon
Competition between sports for fans’ money and attention is increasingly fierce

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The early stages of this year's rugby World Cup were one of the biggest upsets of the event's 32-year history. On September 28, in the sweltering heat of Shizuoka Stadium, the hosts, Japan, beat Ireland, then the second best team in the world, for the first time in history. The result sparked shrill celebrations across the country. Japanese TV presenters bowed to the images of the winners before reading the news. The Japan Sports Agency commissioner boasted that his country had rewritten the history of the sport.

The sport's bosses expect these standout events to attract more than their usual followers. Rugby and other games are increasingly concerned about their business future. Technology allows fans to watch any game anytime and from anywhere. This, combined with a growing world population, means that, in absolute numbers, the sports audience is larger than ever. But revenue growth has slowed, according to PwC, a consultancy. Attention periods are decreasing. Viewer "stickiness" – the number of minutes of a game they watch – is decreasing, says Kevin Alavy, director of Futures Sport, another consultancy. A 3% annual decline in the number of minutes watched per game, sport and year is common. Sports that drag on for hours, if not days, like cricket, are particularly vulnerable as viewers impatiently resort to alternative entertainment on their smartphones – including featured clips. Cricket sells the rights to display these clips separately from those to display entire matches.

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This pressure is leading to an increasingly intense competition between sports for money and fan attention. The stakes are high. Sport is a serious business, generating about $ 90 billion a year, says Victor Matheson, sports economist at the College of the Holy Cross in Massachusetts.

In the United States, major sports are still extremely valuable to advertisers and pay-TV providers, because nearly every other type of entertainment on television has experienced much worse declines in viewership. Moffett Nathanson, a research firm, found in a recent survey of 5,000 Americans that half watched sports at least once a month and 90% of them still subscribe to pay TV. Only 67% of non-sports respondents have pay TV. So while Netflix has eroded pay-TV views, live sports play remains a less replaceable draw, except for other live sports games.

Football remains arguably the world's favorite sport. It generates revenues of about $ 40 billion a year, says Matheson, nearly double the next most lucrative sport, football, five times more than basketball and 20 times more than cricket (see chart). Its market share has grown since 2000, according to Futures Sport. It's simple to play and easy for fans around the world to follow. FIFA, the sport's governing body, has invested huge amounts of money in emerging markets. Women's play galvanized the sport even more; This year's Women's World Cup was attended by over one billion spectators. And the popularity of football has soared in China and America, especially among young people.

Competition between sports for fans’ money and attention is increasingly fierce

No sport will displace football. But others can learn from your success. Three great lessons became apparent. Sport needs to adapt to modern viewing habits. They need to enter new markets. Doing this involves more than simply arranging matches in new countries – it means finding home-made stars in those markets.

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No game has reinvented itself for as bad a time as cricket. In 2003, marketing research saying people wanted shorter matches led to the launch of the professional Twenty20 (T20) cricket in England. The games last only three hours, compared to eight hours for "one day" cricket and up to five days for test matches. The T20 is now the most watched version of cricket in the world. It appeals to a much younger fanbase, explains Alavy. The success of cricket was inspiring. Rugby sevens, where the games consist of two halves lasting seven minutes compared to the usual 40 minutes presented at the Olympic Games for the first time in 2016. Three-team basketball, where the games last ten minutes, against 48 minutes into the National Basketball Association (NBA) games, will make its Olympic debut next year.

The reinvention of cricket paid off. Matheson estimates that over the last decade, his revenues have grown faster than any other major sport. Much of this is due to India. The Indian Premier League, the T20 national league in India, is by far the fastest growing major league in any sport, says Matheson. The sport can expect to increase revenue by gaining new fans or relying on existing fans who become richer. Cricket is betting on the last one. India will overtake China as the most populous nation in the world by 2020 and its middle class is growing rapidly.

India is so central to cricket calculations that its elimination at the start of the 2007 cricket World Cup led to the decision to reduce the number of teams in the tournament in the future from 16 to 10, the smallest of comparable men's competitions. The team's premature departure meant that he played only three matches that year. Restructuring means that you are guaranteed to play nine in the group stage, a crucial factor in cash generation for broadcasters and advertisers.

Cricket is unusual as it depends so much on a market for revenue growth. Most other sports should look further afield. For starters, they can open international tournaments for new players. Since 2002, basketball has doubled the number of teams in the men's World Cup to 32. Rugby is considering increasing its cup from 20 countries to 24. The logic is simple: the audience in countries is inevitably bigger when they compete in a cup world. "The more inclusive you play sports, the wider the market will be," says Dave Berri, sports economist at Southern Utah University. Football is, once again, the world leader in this regard. It recently expanded its World Cup to allow 48 teams to participate. The next Women's Cup will include 32 countries, compared to 24 in the most recent.

Game on

Holding such competitions in new markets also helps. Rugby has been cautious, but after bringing the 2019 World Cup to Japan – the first time the event has been held outside the sport's traditional strongholds – he now plans to hold the 2027 or 2031 tournament in the United States. "It would certainly accelerate some possibilities in that part of the world, which would be good for everyone, because revenue would be back in the game," said Brett Gosper, head of World Rugby. The next basketball World Cup will be held in Japan, Indonesia and the Philippines.

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The sport can venture abroad even without a world cup. Major American football, baseball and basketball leagues are playing regular season games in London in 2019. They are already attracting crowds besides homesick Americans. The National Football League says it has sold tickets for a London match to every neighborhood in Britain.

These efforts may accompany the third bet of squeezed sports – identifying famous players in the markets they are looking at. These athletes are a powerful recruiting tool, keeping new fans watching. The success of basketball in China – which hosted this year's World Cup – is an example of slam dunk.

The achievements of basketball in China are partly due to one man. In 2002, Yao Ming became the first Chinese player to be the best choice in the NBA draft. This marked the beginning of a brilliant career in America. Finding a star always involves luck. But the NBA has increased its chances through its grassroots work in China. He established offices there in 1992. He has been playing exhibition games in China since 2004, long before any other professional American sports league.

The NBA capitalized on Yao's popularity and used it to further expand basketball's reach. It currently has three academies in China, as well as others in Australia, Mexico, India and Senegal. In the past, the league was "more passive in terms of developing the next generation of international players," said Adam Silver, head of the NBA, last year. He believes that if the organization can nurture leading players in these markets, it will greatly increase interest in basketball. The Basketball Africa League, which includes teams from nine African countries, will be launched next year as a collaboration between the NBA and FIBA, the global basketball body.

This investment helps explain why basketball players in the United States have become a much more international group. In 1980, the league had only four foreign players from only four countries besides America. In 2000, the league had 36 non-American players from 24 different countries. It now has 108, representing 42 nationalities. The number remains well short of Premier League football in Britain, whose players were from 64 countries last year. But it comfortably outperforms similar leagues in other sports.

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However, perhaps the biggest lesson of all in the NBA's success is the extent to which the sport makes people watch. According to its research, the NBA estimates that in younger territories, people who participate in a particular sport are 68 times more likely to be committed fans. There are now 600,000 basketball courts in China, giving players many places to dream of becoming the next Mr. Yao.

Raising audiences in new markets requires commitment, time and money, says Alavy. Sports that make occasional matches and hope to gain dedicated followers as a result are likely to be disappointed. In 2015, a set of T20 matches between teams led by Sachin Tendulkar and Shane Warne, two cricket legends, were held in the United States. THE…

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