While many of the rules, techniques and goals in the sports world have stood the test of time, sports culture continues to evolve. This has resulted in some intriguing trends that athletes and other sports professionals can use to their advantage. Here are some of the top trends in the world of sports and a few tips to help you make the most of them.
NIL involves an athlete or a business using an athlete’s name, image and likeness (NIL) in marketing and promotional campaigns. This can include anything from autograph signings to TV commercials.
Up until July 1, 2021, college athletes couldn’t earn any money in connection with their athletic ability. But the rules have changed, and the horizon looks bright for collegiate athletes who want to monetize their NIL — as evidenced by University of Miami point guard Nijel Pack landing an $800,000 NIL deal with technology company LifeWallet.
However, for student athletes with NIL deals in their sights, the benefits also bring challenges.
How should an 18-year-old invest, spend and manage half a million dollars — or more? What kinds of businesses, properties or other assets should they consider purchasing? How much should go toward stocks, bonds, mutual funds or commodities? Is now the best time to buy a house for a family member? If so, which market offers the best return on investment in terms of potential appreciation?
The list of financial quandaries gets very long, very quickly. But that’s only one concern.
When a student athlete starts considering NIL deals, they transition from a regular student to a hybrid entity: part business, part commodity and part person. While your value as a person is indelible, commodities and businesses are subject to market fluctuations and economic dynamics.
It’s important for those stepping into the NIL game to create a plan to maximize their opportunities and position themselves for what could be a lucrative future. This involves bringing in experienced financial professionals who understand the best ways to help you optimize your earnings.
It’s also helpful to partner with a professional business manager who can provide day-to-day support with things like payroll for people you hire, bookkeeping and tax prep, budgeting and understanding your NIL opportunities. With these things squared away, you can focus on your performance instead of business issues.
The NCAA women’s basketball championship is an excellent microcosm of the general upward trend of women’s sports: The 2023 title game drew 73.7% more viewers than the previous record-setting game in 2002.
In some cases, women’s games have been outperforming men’s. In 2019, the FIFA Women’s World Cup Final attracted 22% more viewers in the U.S. than the men’s. The popularity of the National Women’s Soccer League (NWSL) has increased as well. The number of season ticketholders has risen 22% across the league, and the average team has 37 sponsorships, which outpaces all other sports.
The timing couldn’t be better: Some of the most blockbuster women’s leagues and events are up for new media deals, including NCAA women’s basketball, the WNBA, the NWSL and the FIFA Women’s World Cup. The attention from fans and sponsors is likely to add a decimal point or two to these negotiations.
The spike in popularity is also paving the way for more NIL opportunities for female athletes. For example, with all of the sports that businesses have to choose from to promote their products, NCAA women’s basketball draws 12.6% of all NIL funds. These athletes are second only to men’s basketball and football, which pull in 18.9% and 49.6%, respectively.
Women investors and owners have been supporting their compatriots as well — but not just because it feels like the right thing to do. They’re following the money. A dollar invested in a women’s sport may go further than one put toward the same men’s sport, earning a more impressive ROI.
That was part of the rationale for Kara Nortman, owner of Angel City Football Club. As she explained to the New York Times, “Plenty of people invest in men’s sports. It’s harder to have an impact there from a dollar standpoint. But in women’s sports, there’s a huge financial and cultural opportunity to make a difference, drive returns, and get people to pay attention.”
Both collegiate and professional female athletes have the chance to start building and bolstering their brands. This has a direct impact on your lifetime earning potential, particularly because a strong brand image can earn you long-term, loyal fans.
By networking with women investors, you can build relationships that could power your professional success, like landing NIL deals with women-owned businesses. And if you decide to start building a product around your image, such as a line of apparel or sports equipment? Partnering with women investors can provide both sound advice and essential startup funds.
Financial decisions, maintaining a lucrative image and choosing which deals to accept or waive require professional guidance to get just right. Make sure your business or financial manager has experience structuring these kinds of deals. This will help you maximize the benefits for your personal brand and ensure you make sound decisions around which investors to connect with.
The sports streaming landscape has been getting more and more diverse in response to fans who want more viewing options. For instance, Major League Soccer (MLS) has inked an exclusive $2.5 billion deal with Apple TV. And Google has bought exclusive rights to NFL Sunday Ticket, paying a reported $2 billion per year.
Netflix has also been capitalizing on the physical and emotional power of sports, capturing new fans with content like Formula 1: Drive to Survive, which earned almost 570,000 viewers in its fifth season debut, a 40% increase over the previous season debut.
Netflix has also shined a spotlight on tennis with its Break Point series. Not only is the show attracting viewers, it’s also generating more social media traction for featured athletes like Maria Sakkari, who has seen a 10.3% increase inTwitter and Instagram audiences since Netflix started serving up the series.
Streaming deals can be a lucrative source of income, but you need to think about how they work toward your long-term financial goals. For example, if you get featured in a streaming show, you may have to decide how to structure your royalty agreement or the best ways to invest your income.
For over a decade, tech professionals have been talking about the data revolution, and the sports world has been right in the thick of it. Athletes, coaches, recruiters and fans are increasingly using technology as they play and experience sports.
Front offices, coaches and broadcast corporations are using predictive analytics to approximate the future. For example, the data engineers who helped build the Texas Rangers stadium have given it a digital infrastructure capable of foreseeing potential profits from games long in advance. And coaches and fans can use historical data to predict how players and teams will perform from one quarter or inning to the next.
Whether it’s the distance of a three-point shot or the speed of a fastball, viewers benefit from a constant stream of data flashing across their TV screens and devices. As statisticians feed announcers percentages, trends and records, fans benefit from quantifiable insights into their favorite athletes’ performances.
Digitized realities are changing the fan experience. For example, you can get courtside seats to 52 live NBA games with Meta’s Horizon Worlds — without leaving your couch. As you turn your head, your view of the court changes in sync with your motions.
Make sure your business advisors keep up with the latest advancements in sports tech, so you’ll be in a good position to take advantage of them. For example, can you leverage predictive analytics to boost your marketing value as an athlete? If your stats are trending up in a certain area, this can increase your value to teams that need athletes who excel in that capacity. And if a company is designing a new virtual or mixed reality experience, that may be an opportunity for a NIL deal.
Environmental, social and governance (ESG) refers to the ways a company impacts the natural environment and social fabric. The “governance” element relates to how decision-makers run the company, treat its shareholders and make sure operations align with regulatory standards.
Sports teams and organizations are increasingly acknowledging they exist neither in a social bubble or on an island as they embrace ESG principles. The NBA has led the way with its NBA Cares program, which recorded 6.2 million hours of hands-on service by its players, teams and coaches in the 2021/2022 season.
Even though NBA Cares and other highly visible ESG-focused efforts seem to be paving the way, they're really just continuing a trend. According to consulting firm McKinsey, 90% of S&P 500 companies currently publish official ESG reports in one form or another.
For sports organizations, the list of ESG challenges is lengthy. From net-zero environmental impacts to supporting local businesses, teams, owners and stadiums have been trying to keep up with their counterparts in other business sectors. One of the trickier ESG issues to navigate involves the environmental impact of running stadiums and other venues. Heating, cooling and powering sports facilities in an environmentally friendly way is a difficult challenge for owners and facility managers.
As sports organizations work for the right to fly their ESG flags, they have to be wary of hypocrisy and broken promises undermining their efforts. For example, the scientific community has blasted the 2022 FIFA World Cup host, Qatar, for prematurely flashing “unworkable” net-zero plans.
Your financial future could hinge on choosing to do business with an organization that understands ESG-related issues. Suppose you’re deciding between two teams that have presented you with similar offers. The one with the better ESG performance may be the wiser choice. This can benefit the longevity of the organization and portend fair decisions on the part of management down the road.
To evaluate ESG-related metrics of companies and organizations you may partner with, it’s a good idea to connect with professionals who understand these issues and how businesses should navigate them.
Locker rooms, fields, courts and competitions often have a stifling air of bravado and “suck it up” sentiment. It’s easy for mental wellness to get lost in a toughness-centered culture. But more and more organizations are breaking that mold and giving much-needed attention to the minds of athletes instead of merely their bodies.
The NCAA, for example, has an educational module dedicated to guiding student athletes to better mental health. In the wake of Simone Biles’ Tokyo Olympics withdrawal, the U.S. Gymnastic Club Owners Association has published content to help athletes ground themselves and strike a healthy mental balance.
Navigating mental health can be especially difficult for an athlete, particularly in the context of a laundry list of obligations, tough decisions and professional and personal responsibilities. But you need to pay as much attention to your mental health as you do your physical health.
From a financial perspective, this includes financial planning for your future after your retirement from sports. Having this long-term financial roadmap will help provide security and peace of mind. And by getting help from experienced financial and business advisors, you can reduce your list of obligations and make better decisions with less stress.
To learn more about how to navigate these trends and manage the complexities of your career and your business, contact Armanino’s Business Management experts.
