20 FOR (the) 20's [Part 2]
Twenty Trends to Watch For During the 2020's in the Sports & Entertainment Industry
What if I told you that this decade could become the most transformative, impactful ten years we have ever seen in the sports and entertainment industry?
Taking a step back to reflect on the previous decade, and imagine what will happen during this decade has been a real treat.
Overall, I can’t see how you couldn’t be optimistic about the possibilities for the sports and entertainment industry over the next ten years. A confluence of technological advancement, progress on important legislation, and brand new business models will make the 2020’s an exciting and challenging time for everyone working in our industry.
Last week, I laid out the first ten trends that I believe industry leaders should be aware of, and in case you missed it, you can read them here.
Today, let’s dive into ten more trends that I’ve observed and expect to make a major impact on how we do business over the next ten years. Please feel free to shoot me an email (john@thirdwin.com), tweet, or LinkedIn message if you’d like to discuss or debate these ideas. Thank you for reading!
11. Sports Gambling Comes Into the Light, but Causes Unintended Consequences
The floodgates have opened. When, in May 2018, the Supreme Court ruled that each U.S. state could create legislation to legalize sports gambling, a massive new business opportunity presented itself to the sports industry.
Since that landmark case, sports betting has been legalized in eleven states. By 2024, it's estimated that forty U.S. states will have legalized sports betting. The consultancy, Gambling Commission, estimates that legal sports betting will be a $150 billion industry by that time.
While there are benefits to bringing a former black market industry into the light, I have concerns about the unintended consequences of widespread sports gambling. In a country where 78% of workers live paycheck to paycheck, the increased ease and accessibility of sports gambling could be detrimental to the financial and mental well-being of American citizens.
Gambling can be highly addictive. I anticipate that in 5-7 years, we will be reading articles about the negative effects of legal sports betting on the U.S. population. That is unless we invest further in financial education and awareness about "betting responsibly."
Leaders from the leagues, the business world, and the government will need to step up and make sure that we don't go overboard with legalized gambling. The consequences could be severe if they don't.
12. esports Continues to Rise, Consolidate
esports is becoming a global powerhouse. According to the Consumer Technology Association, the global esports audience is estimated to grow from "355 million in 2018 to 674 million in 2022, nearly a 90% jump." In the United States, the CTA estimates that 70% of Americans ages 13 to 64 play video games.
With a burgeoning audience, sponsorship revenue has grown as well. “Fans of esports are a coveted group for brands – especially given the rapid growth in audience and events, and the appealing viewer demographics,” said Lesley Rohrbaugh, director of research at CTA.
One thing to look out for in the next decade — consolidation. Currently esports leagues are fragmented and decentralized, with the most popular leagues and teams spread out across different countries and companies. Much like what we've seen throughout the history of the "Big Four" North American pro sports leagues, I would expect that we'll start to see esports leagues merging and building infrastructure to sustain its pace of growth.
Just last week, Riot Games announced that its League of Legends Championship Series would expand to include a Monday Night League broadcast, taking a page out of the NFL's broadcast playbook. Expect to see more esports business leaders follow the blueprint laid out by their predecessors in the legacy sports leagues.
13. CBD and Medical Marijuana Become the Pain Management Drug of Choice
If you feel like you are seeing a lot of headlines about CBD and the legalization of marijuana in the sports industry, it’s because you are.
High-profile athletes including Rob Gronkowski, Calvin Johnson, Tiki Barber, Paul Pierce, and Joe Montana have already entered into the cannabis industry through investments, endorsements, or both.
Former NBA forward, Al Harrington, has been one of the foremost leaders in advocating for the health benefits of cannabidiol (CBD) and cannabis for pain management. “The day-to-day pain management issues that players deal with can be dealt with through cannabis,” Harrington told The Washington Post. He believes that CBD is a more natural, less harmful product that can help athletes recovering from surgeries and the day-to-day injuries that come from playing professionally.
In Decemeber, Major League Baseball announced that it would no longer test minor league ballplayers for marijuana, and remove the drug from its list of "drugs of abuse." The prescription opioid crisis has decimated the U.S. in the past decade, and it affected MLB this past summer when Los Angeles Angels pitcher, Tyler Skaggs, was found dead in a hotel room after an apparent overdose from a mix of painkillers and alcohol.
Harrington believes in both the business opportunity and the health benefits of CBD, and expects to build his CBD company, Viola, into a $100 million business. The NBA vet also sees the opportunity to lift up members of the black community by empowering them to become owners of cannabis businesses.
"The purpose is to use this plant — or this industry that has pretty much decimated the black community — have Viola be a company to bring the black community into this space in a significant way,” Harrington said. “I want to be able to create 100 cannabis owners.”
Look for more research, decriminalization, and growth in CBD usage throughout the sports world in the next ten years.
14. "The Streaming Wars" Develop a Beachhead in Sports
Cordcutters rejoice. In the 2020s, we will see a continued rise in streaming and on-demand sports programming over the internet. All signs point to a new era of pro sports broadcasting, and "Big Tech" companies may be at the center of the action.
As Netflix's growth accelerated in the second half of the 2010s, a gaggle of companies from Disney, to AT&T, to NBC and CBS began developing over-the-top (OTT) streaming products to compete. "The Streaming Wars" have transformed the film and TV industries, but the final frontier appears to be live sports.
Bidding rights will open in 2021 for MLB and the NFL, in 2022 for the NHL, and in 2025 for the NBA. And with new broadcasting deals should come plenty of innovative new partnerships. Look for Facebook, Twitter, and Amazon, as well as upstart competitors DAZN and fuboTV, to make moves to secure some of the rights to stream live sports, with the battle for attention reaching a fever pitch.
As a report from Nielsen Sports cites, "It's clear that the business of distributing sports video is on the cusp of profound change. For fans, it is an exciting time–they can expect more options to watch their favorite sports, and innovation from new players in how sports are presented."
15. The Industry Rallies Around the SDGs
The United Nations Sustainable Development Goals (SDGs) were established in 2015 to provide "a shared blueprint for peace and prosperity for people and the planet." By 2030, the UN member states are striving to hit seventeen goals which, if accomplished, would transform human society.
Now five years into the project, there is still a ton of work to do in the next ten years to come even remotely close to achieving the SDGs. An encouraging sign of progress, however, has been the increased involvement of the sports and entertainment industry in contributing to the achievement of the goals. I anticipate that we will see a large coalition of leagues, teams, venues, athletes, musicians, and entertainers join forces to pursue the SDGs this decade.
It seems to me that the biggest opportunity to rally around the SDGs lies in the Olympic Games. The upcoming Tokyo Games this summer has laid a blueprint for how the Olympics can contribute to the SDGs with its Sustainability Plan. The plan aims "to ensure that the positive impacts of the Tokyo 2020 Games will extend far beyond the parameters of Tokyo, the Host City, to encompass the whole of Japan and the world."
Looking ahead at future Olympic Games, the 2026 Winter Olympics in Milan and Cortina has already pledged that it will host "the most sustainable" Winter Olympics in history. In 2028, the Summer Olympics return to the United States for the first time since 1996. LA 2028 could make a massive contribution to the SDGs and ensure that the games are run in a net positive way.
16. Podcasting Becomes (Even More) Omnipresent
Longtime sports radio broadcaster, Mike Francesa, summed up the explosive growth in podcasting with a humorous tweet this week:
Well, we haven't reached "peak podcasting" just yet, Mike.
In fact, research compiled by Podcast Insights shows that in 2019, 51% of the US population has listened to podcasts, up from 44% in 2018. The Podcast Trends Report shows that among podcast fans, 82.4% of people listen to 7 or more hours of podcasts each week. Everything in podcasting is trending up and to the right. So what does that mean for our industry?
Expect to see teams, athletes, and talent from music and film continue to launch podcasts. Front Office Sports has written about how the Philadelphia Eagles and Minnesota Vikings have embraced a podcasting strategy and seen tons of interest from fans. Early movers such as CJ McCollum, JJ Redick, and Josh Hart are great examples of active NBA players who are building audiences off the court through podcasting.
Along with the increase in the number of podcasts, expect to see advertisers continue to move money from more traditional channels into podcasts. The Podcast Revenue Report by IAB and PwC projects that podcasting ad revenue will reach $1 billion by 2021.
17. Virtual Reality and Augmented Reality Disrupt Business Models
Facebook founder, Mark Zuckerberg has been in hot water over the past 18 months (or more). Say what you want about his leadership and ethics, but that doesn't mean that he isn't still one of the most innovative thinkers on the planet.
On January 9th, Zuckerberg wrote a post on Facebook about "what I hope the world and my life will look in 2030 so I can make sure I'm focusing on those things." One of his predictions that stood out to me was his section about "The Next Computing Platform."
"While I expect phones to still be our primary devices through most of this decade, at some point in the 2020s, we will get breakthrough augmented reality glasses that will redefine our relationship with technology," Zuckerberg wrote. With that, he added that he believes that augmented reality and virtual reality platforms will be the tech platform that defines the 2020s.
If Zuckerberg is correct, the implications for sports and entertainment will be significant. As consumers get better and better access to AR and VR, will that mean that they will be less likely to attend a game, concert, or festival in person? If so, how will leagues, teams, and venues respond? How will advertising and marketing work inside of AR and VR?
I have way more questions than I have answers for this new wave of technology. All I can say is, as leaders in the sports and entertainment industry, we need to keep a close eye on the development of this technology and be prepared when disruption comes.
18. A Major Institution Refuses to do Business With China
File this one under "JB's Hot Takes" for the 2020s.
Back in October, the NBA found itself embroiled in a business crisis after a single tweet by Houston Rockets General Manager, Daryl Morey, in support of Hong Kong protesters. Morey's tweet put billions of dollars of revenue in jeopardy for the league. With more fans watching NBA basketball in China than there are citizens of the United States, the divide between American ideals and Chinese politics was laid out for all the world to see.
In the 2020s, with American consumers becoming more and more cognizant of the purpose and values of the businesses they patronize, don't be surprised if one of the other North American big leagues takes the opposite approach from the NBA, and refuses to do business in China.
I know, I know. In the sports and entertainment business, it is often "all about the Benjamins." But it has become clear that American businesses have to play by the Chinese government's rules if they want to tap into that massive consumer market. At what point do American sports leagues say, "Enough is enough. We want to grow our game and our business, but we are not willing to compromise our values to do so."
I'm not going to hold my breath on this one. However, it just takes one major leader in the industry to take a stand and say, "Unless China changes its human rights policy, and does not censor information in our broadcasts and from our employees, we will not be doing business in the country."
One way or another, it will be fascinating to see how the US - China relations evolve and what implications they have on global sports and entertainment.
19. Cryptocurrency Comes to the Fore
Brooklyn Nets guard, Spencer Dinwiddie, is ruffling some feathers in the NBA. The 26-year old, who refers to himself as "Just a tech guy with a jumper," is looking to tokenize his contract through a platform he calls DREAM Fan Shares. Dinwiddie wants to enable fans to invest directly into their favorite pro athletes through something called “Professional Athlete Investment Tokens” or PAinTs. He's leveraging the Ethereum blockchain platform in order to have an immutable, decentralized ledger to store the digital asset.
While Spencer Dinwiddie is a pioneer in this space, I believe that blockchain technology and cryptocurrency will finally begin to establish themselves in the mainstream of popular culture in the 2020s. Some teams have already started to test the waters with blockchain technology and cryptoassets, with the Sacramento Kings leading the way.
Expect to see more tech-savvy athletes push the envelope with respect to contracts and investment vehicles into digital assets like Bitcoin and Ethereum. To study up on cryptocurrency, I recommend this Vox episode of "Explained" or, for non-Netflix users, this excellent explainer video on YouTube.
20. Stadiums and Arenas as Community Hubs
If you want to get a feel for the health of the sports and entertainment business in the U.S., look no further than the road map for new stadiums and arenas under construction and set to open in the 2020s.
This year, brand new stadiums will open up in Los Angeles and Las Vegas to house three NFL franchises — the LA Rams, LA Chargers, and the Las Vegas Raiders (who will move from Oakland).
In Major League Soccer, thirteen new stadiums were opened during the 2010s. With planned MLS expansion to thirty teams, at least four additional new stadiums will be built this decade in Austin, Cincinnati, Sacramento, and Nashville.
The trend to look out for with all of the new stadiums, arenas, and practice facilities in sports and entertainment is the shift from underutilized spaces to year-round sports and entertainment districts which combine leisure activities with community resource centers.
A good recent example in mixed-used space is the Detroit Pistons new practice facility, the Henry Ford Detroit Pistons Performance Center. The $90 million facility is intended to be a part of the “continued rebirth and revitalization” of Detroit, Charlie Metzger, executive vice president for Pistons Sports & Entertainment, told Front Office Sports.
Alongside elite training facilities and a state-of-the-art sports medicine center, the Pistons built a large cafe, a public fitness center, and retail space right into the center. It provides the Pistons opportunities to connect with fans year round, rather than just on the forty-one game days they have each year.
Bettina Cornwell, marketing department head at the University of Oregon’s Lundquist College of Business, said that community-facing facilities contribute to teams' bottom lines. "While they may not say it this way, the community and public space programming element allow for a regularly occurring authentic connection,” Cornwell said. “Game days are points in time with intense activity, whereas community facing facilities allow consistent contact.”
With many of these new stadium and arena projects funded in part by the public, it stands to reason that the public should receive significant benefit from and access to these spaces. Look for sports and entertainment venues to be spaces where communities can come together.
Win-Win-Win is a community for purpose-driven leaders in the sports and entertainment industry. Once a week, on Thursdays, I’ll send you a thoughtful essay/blog post about how we might leverage the influence of our industry for good. Please reach out to me on Twitter or LinkedIn if you’d like to connect and discuss my work or find ways that we might collaborate.