It’s no secret that professional sport is a profitable business. The NFL alone generates around $18 billion a year in revenue and is targeting $25 billion by 2027. Other major leagues like the NBA, MLB, and NHL don’t quite reach the heady heights that the NFL does, but their turnover is certainly nothing to be ashamed of. Of course, the leagues aren’t the only ones generating revenue either as the teams, players, sponsors, merchandise vendors, TV broadcasters, and countless support businesses also benefit from the success of professional sports. The success of the sports betting industry is also directly correlated to the success of the leagues themselves, something we’ve seen a lot in recent years, as more and more fans look to get involved in the activity. With so much demand for online betting sites, brands like LiveScore Bet are competing hard to acquire market share and often use free bet promotions as part of their marketing campaigns for this.
The success of sports betting can be attributed to a growing desire for fans to want to be involved in the sports they love. They no longer just want to be spectators, watching from the bleachers or through the TV in their living room. They want to take part.
Of course, most of us aren’t 7ft ballers capable of playing in the NBA, so our involvement is going to be away from the court. But that doesn’t stop us from feeling like we’re part of something that’s bigger than just us.
In fact, in recognizing this desire, many sports leagues have begun implementing new strategies that are aimed at attracting the attention of a new generation of sports fans and getting them engaged in their activities.
But the techniques used in years gone by aren’t as effective as they once were. Younger adults that came of age during the era of social media and having almost everything available to them at the push of a button have very different wants and needs to older, more traditional sports fans.
So a different approach is required to attract and engage these younger people and convert them into lifelong sports fans.
Sports leagues have taken a wide range of approaches to this. One of the most successful has been Formula 1, which has stepped up its social media game over the last five years and used the Netflix docuseries Drive to Survive to help get a new audience interested in the sport.
Another approach that some teams have taken is to embrace esports. Both in the US and across the pond in Europe, sports teams and leagues are creating esports leagues, forming their own esports teams, and partnering with existing competitors.
But is this approach working and is it good or bad for traditional sports?
Esports as a Route Into Traditional Sports
Traditionally, video games have been seen as a way to profit from the intellectual property owned by sports leagues, teams, and athletes. They create a title that reflects that year’s season with digital depictions of the dozens of teams and hundreds of players and let gamers step into the virtual shoes of their favorite stars to recreate the action that they saw on TV.
It’s an approach that’s generated billions of dollars over the years and is likely to continue for the foreseeable future.
However, esports turn this entirely on its head by using video games as a marketing tool to get new fans hooked on the sport itself. The theory is that most young adults today are interested in video games but not so much in sports like baseball or basketball, so by creating a digital competition that is more interesting to them, the league and/or teams can start to nurture long-term relationships with them.
If successful, they can turn them into life-long fans that generate serious lifetime value. It’s very difficult to calculate an exact figure from an outsider’s perspective, but conservative estimates suggest that an average fan could spend upwards of $1,000 per year on sport.
Over 40 years, a million new fans would lead to an additional $40 billion in revenue, a figure that’s not to be sniffed at.
When you add in the fact that TV broadcast deals are contingent on the leagues being able to attract a large audience so that television networks can sell large amounts of advertising, the importance of maintaining and growing the level of interest in each sport is so important.
Do They Work?
So the theory is sound, but does it work in practice? That’s a little harder to measure.
Major League Baseball announced that it was launching an esports league in the Chinese market back in 2019. However, no further updates have been offered up by the league, so we can assume it’s been cancelled.
The NBA 2K League got off to a better start. Of course, it was a low bar to step over, as even a single solitary viewer would have been an improvement. It did manage more, of course, with the 2018 playoffs attracting peak viewers of 61,813. By 2020, however, that figure had dipped to 48,076.
The eChampions League, which uses EA’s FIFA games, has fared a little better, though its peak of 64,641 is still tiny. Numbers that low would count as a rounding error in the viewing figures of real-world events like the Champions League final which attracts more spectators than the population of most countries.
There are, clearly, not huge levels of interest in these competitions. When you put it into the context of the biggest esports tournaments, these events look almost amateurish. For example, The International, the biggest Dota 2 competition in the world, saw a peak of 2.74 million viewers in October 2021 and averaged 857,343 over its duration.
It is obvious, therefore, that the current approach is not working. This doesn’t mean that the underlying concept that esports could be a good way to build a relationship with younger fans is wrong, it is just perhaps that creating digital versions of existing sports that these people are not interested in may not be the best way to approach it.
We may need to watch this space to see what the sports leagues come up with next.
