Within most media companies, sports remain core to their larger content strategy. Premium entertainment isn’t going anywhere, of course, but if you ask Ted Sarandos or Mike Cavanagh or Josh D’Amaro about their content mix, sports will be at the center of it.
“These events break through,” Sarandos said on the company’s last earnings call. “They drive new membership, they add fuel to our ad revenues.”
It’s with that backdrop that Goldman Sachs is releasing a new report focused on sports investing … and the bank is predicting that the sports economy is only going to go up from here.
“We increasingly hear from our clients a continuation of a theme that started with our first paper two years ago, which is this really high level of interest in participating in this explosion that we’re seeing in the sports ecosystem,” says Goldman Sachs partner Nicole Pullen Ross. “When you think about the trajectory of growth within sports, our expectation is that we’ll see growth within the sports ecosystem grow to you know over $600 billion by 2030, that’s 44 percent growth.”
Indeed, the new Goldman report notes a number of things contributing to that explosive growth, from continually rising media rights deals (the bank estimates global sports media rights will hit $67 billion this year); institutional capital buying into teams; and all the ancillary opportunities around entertainment and live events and IP.
“Streaming is now 20 percent of the market for media rights and those contributions of how advertisers are thinking about reaching the consumer in a real-time way is one of the drivers of what we’re seeing,” Ross says. “We’re very analytical in terms of thinking about the value and what the data suggests. One of the things that we saw was the expectation that media rights growth would continue, and the participation was becoming much broader in terms of in terms of the value of the consumer and that live entertainment part of the formula.”
Goldman also dug into some more sector-wide (and in some cases economywide) trends: Institutional investors are buying into teams as league change their roles to give owners more liquidity, and sports team owners, like many business owners, are exploring how artificial intelligence can improve efficiency and create more personalized fan experiences.
But the report also digs into the ancillary opportunities in sports, particularly around athlete-centric brands (athlete-led studios and consumer brands, etc) shortform content, and opportunities like VR tickets to games.
“In an increasingly fragmented media landscape, sports owners are leveraging the power of storytelling to capture and retain a fan base with an increasingly short attention span,” the report states. “Rather than relying solely on traditional broadcasts, they use narrative-driven content to sustain the appeal of live games while capturing younger demographics.”
“When you consider the brands that the athletes have and the longevity of their lives post-career, there is an opportunity one for the athlete to want to invest in their brand and those relationships while they’re still playing, but also the opportunity for them to transition that into areas of focus for their business interests,” Ross says. “So the creativity is around how can we make the athlete more relatable? How can we get more fans to engage? Particularly the younger audience, and how can we use technology as a way to do that? Some of the shortform engagement is an example of that, and so that creativity around making additional ways available to increase engagement and participation is one of the things that we heard from clients and the creativity that they’re using to to make sure that they are having points of differentiated connectivity across their across their attendee base. ultimately, teams want to win, owners want to win.”
