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PwC’s Sports Survey 2021: The Ingredients of the Sporting Ecosystem Remission
This 6th edition of the PwC’s Sports Business Advisory survey, designed to take the pulse of the sports industry, was published September 21st, 2021, with the support of 792 responses from 55 countries, received between June and August 2021. This year’s edition, presented through three detailed chapters on societal and financial sustainability, major governance reforms of sports organizations, and a reshaping of commercial models, projects the growth expectations and key market forces that are expected to transform the sports sector in the next three to five years.
The respondents who occupied a senior/C-level position within their respective organizations (federations, clubs, broadcasters, agencies, academic/public sector), agree on “the imperative for sport to better confront today’s collective responsibilities. Sports organizations must frontally embrace societal challenges, using their influential platform not only to promote human well-being and environmental protection, but more concretely, play an active role in developing a stronger society. Instrumental in achieving a sustainable recovery, our results also identify key areas of structural transformation for sports organizations, as well as the main prospects for future-proofing their commercial model.” [1]
The advent of Over The Top (OTT) platforms and the shift from a traditional to a digital model is the first source of change in the sports ecosystem, both from a broadcasting rights perspective and in terms of fans' new consumption habits. “At the heart of the European Super League debate and ongoing discussions about audience decline, fans are also a major force for change as behaviors and expectations continue to vary considerably across generations.” [1]
Prioritized by over 80% of respondents, the social role of sport is one of the most prominent key market forces for the sport sector. “Professional teams and athletes are increasingly using their following to speak out on social issues, which is now expected by fans. However, there’s still no consistent approach on how sports organizations can address societal issues in an appropriate way, setting the relevant framework for their actions and the powers of expression of athletes.” [1]
In a nutshell, sport is at the crossroads of several challenges: successfully recovering from the Covid-19 crisis, negotiating the changes related to the digital revolution that is reshuffling the cards of broadcasting rights, facing competition from other types of entertainment, and finally being a history driving force by taking the lead on the societal changes that are currently taking place. These are challenges that all stakeholders in the sporting ecosystem must take on in order to finally meet the expectations that society may have of an activity as popular and mobilizing as sports.
Sorare: A Historic Fundraising for Growing Ambitions
“Blockchain-based fantasy soccer game Sorare has raised $680 million in a funding round led by SoftBank, with players including ex-England international Rio Ferdinand and Spain's Gerard Pique also investing”, [2] Reuters reported September 21st. This round of fundraising, the third for Sorare since its creation only three years ago, is the largest one in the history of French Tech. Sorare’s market value is now $4.3 billion.
Sorare, profitable with a forecast of €100 million in revenues in 2021, relies on a dual business of collecting sports cards and fantasy football: Fans have the possibility of acquiring, via auction, virtual NFT technology-based cards of players, more or less rare (from 1 to 1,000 copies per player and per season), with the possibility of trading or reselling them at a higher value. To render the experience even more interesting, these same cards can be used to participate in online championships and increase the value of one's collection.
Les Échos underpins the fact that “unlike many of its peers in the Next40 or the French Tech 120, [Sorare] is directly targeting the general public through its "fantasy football" activity based on NFT, and its virtual card collection activity. The company is helping to create its own market and is capitalizing on the advantage of being able to shape that market as it grows.” [3]
With this new funding, the startup is becoming the first NFT sports entertainment group in the world. This fundraising will help the start-up to continue building partnerships with other major professional football leagues as it recently announced with Spain's LaLiga, and finance innovative projects such as an extensive analysis of player data. Sorare will also create an application to "enrich the live experience of our users", says Nicolas Julia, co-founder and CEO of the start-up. Through this strategy, Sorare wants to expand to a wider audience, beyond its current 150,000 active users and the NFT enthusiastic.
Messi and Ronaldo transfers: Spectacular impact on PSG and Man United social media
“The most popular sport entities on social media are not clubs but athletes, a phenomenon particularly characteristic to the digital-savvy younger generations. The trend is also palpable in football; therefore, it is no surprise that the two marquee signings of the past summer transfer window, Cristiano Ronaldo and Lionel Messi, have brought an army of new followers to their new clubs, Manchester United FC (MU) and Paris Saint-Germain FC (PSG), respectively”, [4] says a KPMG study that analyzes the impact on social networks of the two most prominent transfers this summer.
Both of these clubs are already among the most successful on social media. Taking into account Facebook, Instagram, YouTube, Twitter, TikTok, and Weibo, Manchester United is the 3rd most followed club in the world (169 million) with PSG just behind it (133 million). FC Barcelona (276 million) and Real Madrid (272 million) hold the first two places.
As the figure shows, PSG has seen its audience grow the most. During the two days prior to the announcement of Lionel Messi's engagement and two days after, the Parisian club's platforms gained 14.4 million fans, registering a huge increase of 13%. Manchester United has seen 4.8 million new fans subscribe to their accounts, an increase of 3% during the same period.
The public interest around these transfers was also reflected in the official announcements. The news announcing the return of "CR7" to Old Trafford had more than 13 million reactions on Instagram, a record in the world of football. Messi’s engagement amounted to 9 million reactions on the same network.
Moreover, “the two superstars’ own announcements on their personal accounts collected even more reactions: Ronaldo’s Instagram post triggered almost 19m likes on the channel, where he amassed 340m followers, while Messi’s personal announcement prompted 22m likes on his Instagram account (where he boasts 262m followers).” [4] For reference, Ronaldo has almost 593 million fans on his personal accounts, while Messi has a total of 375m followers, a significant difference partially explained by the absence of the latter from Twitter.
Angel City FC: "Together, We’re Bigger than a Game"
Angel City FC has yet to play an official match. However, this women's football team is regarded as a model for others given its marketing approach, and in particular for the creation of a new ‘community’ sponsorship model called which is already proving successful.
Angel City FC is a women's football team created in July 2020 by Natalie Portman and other celebrities such as Eva Longoria and Serena Williams. The franchise is based in Los Angeles and belongs to the NWSL (National Women’s Soccer League).
Angel City FC is the first professional women's football team in the Los Angeles area. From its creation, the owners wanted the team to be a game changer in the sport. And it has indeed proven to be an instrument for change, in particular by the sponsorship strategy it has adopted. In partnership with its sponsors (Gatorade, Sprouts Farmers Market, DoorDash, Diageo, and Cedars-Sinai Medical Center), Angel City FC donates 10% of every dollar invested in sponsorship directly into community programs. From their website: “This enables ACFC to support a range of programming and partners aimed at building lifetime pathways in sport for kids and adults across Los Angeles. ACFC’s Impact Pillars:
- Equity: Representation matters. That is why we are dedicated to increasing access to resources, information and opportunities for groups who have been marginalized.
- Essentials: Proper equipment, safe facilities and good nutrition are just a few of the basic needs that must be met in order for kids and their families to thrive.
- Education: From mental and physical health, to building strong relationships, sport is a powerful vehicle for change. We are arming those who are invested in sports with the knowledge and tools to be successful.” [5]
Angel City FC's sponsorship model is already paying off. While the team will not begin play until next April, it is already the best in the NWSL in terms of sponsorship revenue. As an example, the partnership signed with Gatorade [6] is interested in equity in football by implementing a coaching program for women coaches. The program aims to improve the training of women coaches and help them advance in their careers on and off the field, and addressing the inequality between men and women coaches in terms of access to head coaching positions.
References:
[1] PwC’s Sports Survey. (2021). Sports industry: ready for recovery?
[2] Bregeras, G. (2021, September 21). Sorare signe la plus grosse levée de fonds de l'histoire de la French Tech. Les Échos.
https://www.lesechos.fr/start-up/deals/sorare-signe-la-plus-grosse-levee-de-fonds-de-lhistoire-de-la-french-tech-1347812
[3] Reuters. (2021, September 21). SoftBank leads $680 million funding round in NFT fantasy soccer game Sorare.
https://www.reuters.com/technology/softbank-leads-680-million-funding-round-nft-fantasy-soccer-game-sorare-2021-09-21/
[4] KPMG Football Benchmark. (2021, September 10). Messi and Ronaldo: a social media matchup between PSG and MU.
https://footballbenchmark.com/library/messi_and_ronaldo_a_social_media_matchup_between_psg_and_mu
[5] Angel City FC. Together we're bigger than a game.
https://angelcity.com/pages/social-impact
[6] Angel City FC. (2021, July 22). A Thirst for Change: ACFC Partners with Gatorade for a More Equitable Future.
https://angelcity.com/blogs/press/a-thirst-for-change-acfc-partners-with-gatorade-for-a-more-equitable-future
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