The Business of Sport: A Growing Market

The Business of Sport: A Growing Market

Sport is a passion that unites people all over the world, a time for gathering, sharing, and having fun. But it is also a growing industry that generates billions in revenue annually. The economic impetus derived from events, television rights, sponsorships, and merchandising is colossal.

Besides, sport is an excellent support for brands, and we can now see athletes representing brands and products such as CBD oils and creams and even CBD hash that are used for sports recovery (find out about Justbob’s CBD hash with a high CBD content)!

Sport and its marketing strategies

Sports marketing is based on techniques fundamental to promoting teams, athletes, and events. Whether traditional or digital communication, the aim is to establish an emotional bond with fans, leveraging their loyalty and interest.

  • Real Madrid, for example, has built its universally recognized brand by relying on prestigious partnerships, such as the one with Cristiano Ronaldo, and targeted marketing campaigns aimed at social media.

Telling stories, creating Legends

In sports, communication is not just information but authentic storytelling. Storytelling around athletes like Micheal Jordan and Serena Williams helps turn them into icons.

Their stories are spread through documentaries, interviews, and social media content, nurturing a deep connection with fans.

Television rights

Event broadcasts have always been a crucial source of income for sports federations and clubs. For example, the English Premier League grossed around £3 billion from its last TV contract.

These deals allow sports leagues to reach a global audience and increase their influence and reach.

Sports Marketing in the Digital Age

With the advent of digital, marketing has taken on new forms. Platforms such as Instagram and Twitter have become essential for fan engagement. In the NBA, these platforms are exploited during game highlights, reaching millions of followers around the world.

The Importance of Engagement

Finally, we will repeat it: fan engagement is the key to success. Offering memorable experiences, both online and offline, ensures audience loyalty. This is why more and more clubs, like Manchester United, are organizing fan events worldwide, strengthening their global presence.

Sponsorship in Europe: the numbers

The year 2023 thus closed the above forecasts in terms of sp; ownership growth (+2.5% vs. +1.6% estimated), thanks in particular to the greater willingness of companies to invest according to CSR (Corporate Social Responsibility) logic in areas linked to ESG (Environmental, Social, and Governance) issues.

Numbers that, according to projections, are expected to grow further by 2024, reaching 1.179 billion, thanks to inflows related to the European Football Championship in Germany and the Paris Olympics, with growth of 6%, also driven by the growing propensity of companies to invest in social and environmental (ESG) issues, with the sectors related to culture and social expected to grow by 9% and 17% respectively.

However, the expectation, despite the continued growth, is that it will take another two years to return to the investment values of the pre-pandemic period.

Looking at the sports field, investments reached 780 million in 2023, a growth of 1.5% compared to the previous year, exceeding expectations. Top league football was confirmed as the undisputed leader, accounting for 60.1% of total investments. However, there were positive accelerations in the collection of second-league Football (+12.8%), Rugby (+ 12.8 %), and top league Basketball (+10.7%)

Sponsorship market growth

According to the last Predictive Survey, the sponsorship market will be driven in 2024 by 6 trends.

  1. the growth of investment in sport maker acquisition and sponsor tech;
  2. a new generation of partnerships driven by a growing focus on environmental and social (ESG) issues that will also lead to significant opportunities in grassroots sports;
  3. the growing importance of technology applications in sports driven by four primary focus areas (virtual reality, blockchain, artificial intelligence, data analytics);
  4. the challenge of inclusivity with the creation of competitions at all levels involving athletes and female athletes regardless of gender or psychomotor abilities;
  5. a new way of quantifying return on investment (ROI) with an emphasis on enhancing the combination of sponsor and sponsor brands;
  6. the acceleration of wellbeing, a growing phenomenon in the world, is linked to people’s desire to live more and feel better individually and in their social context.

In a world of communication increasingly in search of emotional and empathetic messages, the sponsorship market will continue its growth in 2024, with rates higher than advertising. This trend will also strengthen in the following years if the protagonists know how to take up three significant challenges: the digitalization of formats and purchasing processes, corporate social responsibility, and, last but not least, the valorization of the returns obtained through methodologies that place the matching of sponsor and sponsored brands at the center.

If the market accepts these challenges, sponsorship will become a real business driver, allowing corporate organizations to enter people’s lives by giving back part of the value created to the territory, the environment, and communities.

The future of sponsorship will see the centrality of the digitalization of complex sales processes and, in this sense, the application of technologies such as Blockchain and Artificial Intelligence will represent a sort of ‘necessary revolution’ as is being demonstrated by the success, both in the top and grassroots sport, of the modern sponsorship marketplace, which allows the matching of supply and demand, the negotiation and signing of the contract in real-time.

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