Sportonomics and the winners away from the arena

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The mantra of the Olympic Games, 'citius, altius, fortius' - faster, higher, stronger - mirrors the sport industry's relentless transformation alongside societal changes.

The industry is undergoing a profound transformation as younger generations redefine how they engage with athletes and sport, leveraging technology in new ways.

Events like the Olympic Games and the European Football Championship offer insights into emerging trends and unveil new opportunities for investors.

Ready, steady, go…

 

Sport stands out as one of the fastest-growing industries, with direct and indirect ties to various segments of the economy, generating significant revenue and shaping the global market. This growth is also driven by the rising recognition of the numerous benefits of sport.

The interconnectedness of these markets amplifies the ripple effect across various industries, including manufacturing, media, technology, and entertainment, among others.

1. Sporting goods and equipment

In 2023, the global sporting goods and equipment market amounted to over $160 billion in revenue. This segment includes products like balls, bats, rackets, protective gear, and fitness equipment used for sports and recreational activities.

2. Nutrition

The global sports and active nutrition market, which includes supplements, protein powders, and other nutritional products targeted at athletes and active individuals, was valued at nearly $28 billion in 2022.

3. Sports betting

The global sports betting market, encompassing various forms of wagering on sporting events, had a market size of around $242 billion in 2023. This segment has seen significant growth driven by the legalization and expansion of sports betting in many regions.

4. eSports

With the rise of competitive video gaming and the integration of new technologies, the eSports industry has emerged as a lucrative sector: Its market size was valued at US$ 1.88 billion in 2022 and is expected to grow at a compound annual growth rate (CAGR) of 26.8% from 2023 to 2030 to reach US$ 12.10 billion.

Source: Sports Equipment Market Report (2023-2030); Statista, Global sports market, 04.03.2024; Esports market size. Share & trends analysis report, June 2022.

From virtual victories to real records

Technology is revolutionising the fan experience, offering unprecedented levels of engagement through artificial intelligence, virtual reality, augmented reality, and social media interaction.

These innovations enable fans to immerse themselves in the action, even from afar, while providing sport teams with avenues to connect with followers through real-time updates, behind-the-scenes content, and exclusive access to players and coaches.

Technology is also reshaping player training and performance analysis. For example, the NFL employs AI and computer vision to enhance player performance and refine training routines, utilising platforms like Microsoft Azure and Power BI to predict and prevent injuries. These technologies leverage vast amounts of data, including player movement and wellness reports, to optimise player strategies and minimise injury risks.

This revolution extends beyond sports management to the media business, where an increasing number of consumers are transitioning from traditional broadcast and cable TV to streaming platforms which is projected to reach US$ 19,724.44 million by 2028, exhibiting a CAGR of 8.5%.[1]

(Female) game changers

 

Among the total number of fans and viewers, women are emerging as the fastest-growing sports audience. For instance, during the 2024 US Super Bowl, 47.5% of the viewing audience were women, the highest percentage since it reached 47.1% in 2015.

Additionally, the number of young women aged 18 to 24 who visited sports websites or apps increased from 2022 to 2023.[2] Even Formula 1 is becoming more diverse and attracting a younger audience, with 40% of its fans now being female.  

Despite these clear shifts, male characters still receive about 2.5 speaking time and 1.5 times the screen time[3] than female characters. These numbers raise questions about how all affected businesses and industries will need to transform their commercial models to meet the increasingly complex sports business landscape and what global events of the future will look like.[4]

Investment endurance run

As we advance towards an AI-based society, the sport industry is witnessing several emerging trends, each presenting new opportunities for investors. One of them is women’s sports, given its potential to profoundly influence society and its increasingly lucrative trajectory from a business perspective.

The rise of women’s sports and the growing engagement of female fans offer beauty, fashion, and nutrition companies a unique chance to leverage this trend, thereby boosting their revenue and earnings.

Sports offer a myriad of investment prospects, yet amidst financial considerations, we mustn't overlook its profound human impact. In a world often divided, sports possess a unique ability to foster unity and inspire hope.

She's got game

  1. Women’s elite sports will generate more than US$ 1 billion in global revenue in 2024 for the first time ever, outpacing their original valuation three years ago by 300%.

  2. The two most valuable women’s sports are projected to be football (US$ 555 million, 43%) and basketball (US$ 354 million, 28%), while the largest geographical markets in 2024 are forecast to be North America (US$ 670 million, 52%) and Europe (US$ 181 million, 14%).

  3. Beauty brands can collaborate with popular athletes and sports influencers to endorse their products and also sponsor their events. Athletes have a massive following and can effectively promote beauty products to their fans.

  4. The escalating commercial and cultural importance of sports has become a focal point for fashion brands. For instance, with the approach of the 2024 Olympic Games, sponsor brands like Le Coq Sportif and Louis Vuitton have strategically planned limited-edition collections or themed releases centered around Paris 2024.

  5. Source:
    ISPO, Sports fashion trends 2024: Quiet outdoor & nostalgia, 18.01.2024

    Deloitte, Breaking the billion-dollar barrier: Women's elite sports to generate more than $1 billion in revenue in 2024, 29.11.2023

Our impact

 

At Rothschild & Co, we firmly believe in sport's transformative potential to unite people beyond cultural, social, and economic differences. On this matter, our philanthropic foundation R&Co4Generations aims to highlight exceptional and innovative projects that use sport as a tool for better living together.

One project launched on the eve of the 2024 Olympic Games is "The Power of Sport." This initiative is a global challenge inviting Rothschild & Co employees to compete in teams over three weeks, striving to earn the highest points. Participation in this challenge contributes to raising funds for 24 transformative sporting charities dedicated to inspiring the next generation through sports. 

R&Co4Generations has also decided to support a documentary called "Le Sport des Solutions" that invites viewers on a journey into the lives of people transformed by new kinds of sports activities. From football in Rio de Janeiro engaging at-risk youth, surf therapy in Cape Town, to bicycle training in Fribourg for improving migrant women's integration, these disciplines are adapted to achieve social goals.

We, alongside R&Co4Generations, are proud to be part of these ambitious projects to create a new narrative around 21st-century sports.

Sports as an investment opportunity?

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