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Deloitte 2022 Sports Industry Outlook

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By the end of 2021, most professional sports league and college athletics had returned to a relatively normal sensation with full season and live fans. At that time, organizations needed to find fresh new sources of income and ways to connect with their fans.

This year, new emerging regions are ready to diversify their sport. According to Deloitte, the sports industry continues to see a greater focus on the influx of funds from new sources, the increasing adoption of emerging technologies, the changing dynamics of power in college sports, and the broader social issues.

With a wealth of options, fragmentation and overload can become more important issues in the short term, but the basics of the sport remain the same and are centered around the fan experience.

Deloitte 2022 sports industry outlook Explore how these trends create new opportunities and challenges for everyone involved, including sports organizations, leagues, owners, teams, players and fans.

The key points of the report are:

  • Accelerating the fusion of the real world and the digital world, with data capture analysisEsports, Non-Fungible Tokens (NFT), and Immersive Technology.
  • Blockchain-enabled innovation goes beyond simple collections to give fans the opportunity to open up entirely new markets and options.
  • As student athletes exercise more self-determination, college athletics will see some of the biggest changes ever.
  • With sports betting becoming mainstream, companies continue to pursue new customers.

Accelerated physical and virtual merge

As Augmented reality (AR) and virtual reality (VR) technology has evolved further, and sports games and betting platforms are about to infuse the energy, immediacy and excitement of face-to-face experiences into the digital realm. Deloitte expects this blend to accelerate next year as new AR applications for training, simulation and broadcasting grow and 5G and its low-cost deployments advance.Latency The benefits will be greater.

For example, Deloitte and the USGA have worked together on an AR app to improve the fan experience with near real-time shots. Tracking And 3D course model. AT & T and WNBA have launched a game view app for visualizing game stats in AR. NHL, along with Verizon and Immersiv.io, also offers new ways to integrate player and pack tracking and use real-time stats for a more interactive in-game experience.

Another major trend accelerating the creation of the “physical” world is the rapid growth of sports-related NFTs. Deloitte Global predicts that sports-related NFT transactions will exceed $ 2 billion in 2022. In addition, all major leagues currently have NFT partners. For example, the NBA, WNBA, Dapper Labs and their top shot platforms. The NFL recently announced a partnership with Dapper Labs (NFL All Day), and MLB is working with Candy Digital. Deloitte is also gaining in popularity for fantasy sports games like Solare, which blends fantasy sports, NFT and real-world football into new ways for fans to get involved.

Strategic questions to consider:

  • What is the long-term sustainability of the sports NFT market? What can we do to drive more demand and attract as many fans as possible?
  • Will AR go beyond just a fun and entertaining fan experience to become more popular and essential?
  • How do these technologies shape other notable emerging business areas such as ticketing and sports betting?
  • What will the new sports experience be like, combining physical and virtual, sports and esports?

Move beyond NFT

Deloitte predicts that as the use of cryptocurrency-related exchange platforms increases, nexus will form around sports goods, ticketing, betting and games. However, it is important to note that crypto has been playing at the limits of the sports industry for the last few years. Not only are some players paid in cryptocurrencies, but some teams in the MLB, NBA and NHL are accepting it for season tickets and other merchandise.

To increase brand awareness, legitimacy and customers Get, Cryptocurrency players are making big bets on sports sponsorship. Cryptographic Exchange FTX has signed a five-year contract with MLB to purchase the NBA’s Miami Heat Arena naming rights. Coinbase has partnered with the NBA and WNBA in the hope of educating their fans, and the Staples Center has recently been renamed to Crypto.com Arena.

Over the next few years, Deloitte expects more experiments to link personal and season tickets to the blockchain. Initially, the tickets will be bundled with the NFT to reward the fans. In the future, with the right smart contract features, it may be possible to reinvent part of the ownership of season tickets and suites and the ticket resale process.

This activity may increase dynamic ticket pricing and use of some of the resale of tickets back to the team or league, creating new sources of revenue.Deloitte states that standards need to be established and robust before this practice becomes widespread. consumer Protection needs to be enacted, fans educated, and compliance and tax implications need to be considered.

Strategic questions to consider:

  • What is the ultimate role of crypto in sports betting?
  • Will the potential US regulations in the crypto market have a significant impact on expanding our sports ties?
  • Will we finally see a universal wallet that works throughout the sport for fans to be simple and easy to use? User experience??

Shift of power in college athletics

Several events in 2021 foresaw the dramatic changes in power that will unfold in college athletics over the next decade. As Deloitte points out, the NCAA has extended the one-time transfer exception to all Division I sports. This means that popular sports student athletes do not have to participate in the season to transfer.

Next, some states have passed legislation that allows college athletes to benefit from their names, images, and portraits (NILs). With this, the NCAA has released an interim policy, making the resulting opportunities available to all student athletes.

Finally, some schools have announced that they will change their athletic meet in the coming years.

Freedom for student athletes to pursue social and traditional economic opportunities mediaAn ecosystem of agents, consultants and digital services is rapidly being built to take advantage of this opportunity. Some athletes see more than $ 1 million in opportunities for NIL’s efforts. As the power between student athletes and coaches changes, Deloitte will benefit from potential recruitment benefits, changing gender disparities, new attention to niche sports, and more empowered student athletes. And expect negative results.

Strategic questions to consider:

  • Will federal action be taken regarding NIL? Do these changes exacerbate or ameliorate the gender problem in college athletics?
  • How will the proposed changes to the NCAA Constitution, which give more power to the department, affect these issues?
  • What are the implications of these issues for small schools and the vitality of their sports programs?

A turning point in the sports betting market

Sports betting, which generated approximately $ 1.5 billion in revenue in 2020, is legal and active in 29 states as of November 2021. As the activity continues to grow arrival $ 6 billion by 2023) — Leading by three major players: DraftKings, BetMGM, and Van Duel.

Enthusiastic about customer acquisition, they are spending a fortune on advertising and sponsorship to increase brand awareness and expand their traditional foundation. But by doing so, Deloitte says it runs the risk of overwhelming early marketing and alienating fans. As a result, the NFL has a limit on the number of TV spots it can sell to sports betting companies, and likewise, the NBA does not allow sportsbooks to advertise in jerseys.

Deloitte sees this turning point as a catalyst for market integration. As they develop their infrastructure and portfolio, they are looking to bring it in-house and acquire strategic technology to expand their user base.

They are also trying to integrate fantasy sports, sports betting and iGaming. Good examples: Caesars Entertainment’s $ 4 billion acquisition of William Hill, the $ 2.7 billion merger of Barry and the Gamesys Group, and the failure of the DraftKings and Entain merger of $ 20 billion.

Strategic questions to consider:

  • Will the sports betting spending boom on advertising turn to new customers, which will lead to sustainable growth?
  • How much regulation and fan backlash do you see, especially when it comes to underage gambling?
  • What innovations will you see as sports betting blends into the entire fan experience, whether it’s in-venue, broadcast, or streaming?
  • What common attributes do the most successful betting operators have as the market integrates?

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