The experience of Covid has provided sport with many learnings. A report I recently worked on, prepared as a collaboration between Swinburne University of Technology, Deakin University and SportNXT, titled ‘Disruptor and Accelerator’, looked at the social, financial, promotional and performance challenges for leaders and organisations within Australian sport. We surveyed industry experts on subjects including public health restrictions, scaling back operations, and how organisations were forced to reset their priorities and realign their values and strategic directions.
We saw learnings in how sports executives rationalised core business during a period of crisis and positioned organisations for recovery. Successful leaders created new norms, supported decision-makers in new ways, and adjusted to the challenges of remote leadership. To overcome uncertainty, organisations turned to more collaboration, with the value of partnering emerging as a critical capability. Visibly, sports organisations accelerated their digital capacity, building new experiences and commercial opportunities to transform organisations inside and out.
Leaning into sport’s future
We have known sport is changing for some time now. Covid-19 sped up many of these changes.
The IOC has launched the first ‘digital’ Olympic events, with stationary machines allowing digital competitions for athletes. New leagues like Athletes Unlimited are placing players, rather than teams, at the centre of competition. Promotions like the Ultimate Fighting Championship are thriving, having built their business on savvy new media and content strategies.
Similar changes are evident in mass participation sport. More sport and active recreation options than ever now sit outside of traditional sport governance structures. An example is the use of apps to find opportunities to play ‘pick-up’ or social sport games as opposed to competitive weekly competitions. Using technology to conduct and monitor self-training is another recent trend.
These developments are increasing demand for unstructured sport and recreation. We saw this demand building in previous decades with the rise of action or extreme sports, and obstacle and adventure races. Many of these options place less emphasis on structured training, competition, uniforms, and consistent weekly scheduling. These shifts embrace greater flexibility and allow consumers to customise their consumption.
Emerging practices in sport are challenging traditional sport systems to consider their norms and operating models. They raise questions about whether traditional sport structures are equipped to deal with more unstructured and digital sports consumption.
The last year can be reflected on as an accelerator for change in sport, and presents opportunities to consider themes like leadership, collaboration and digital innovation, that will be critical in rebuilding organisational capacity.
How do we leverage major trends in sport while embracing and maintaining the best outcomes of Covid disruption?
Sport’s new relationship with uncertainty
Until 2020, most sports business models were built around certainty. Leagues have run a winter or summer season, and followed organised and structured delivery patterns. This suited bigger, more commercialised sports, and sponsors and broadcasters flocked to be involved.
Covid sent this business continuity out the window. Bigger, broadcast-dependent sports were able to create workarounds, recommencing in ‘hubs’ and ‘bubbles’. Sponsor revenue returned as brands shifted their focus to digital opportunities and assets.
Post-Covid restarts forced sport organisations to create new assets, and rethink value and connection with consumers, all within the parameters of existing contracts and partnerships. These will inevitably change in upcoming negotiations.
These changes also brought to the fore emergent changes in sports media consumption.
While live rights are retaining value, consumers now demand greater sports content options –curated digital content streams, short-form highlights and athlete-centred content are growth areas. Sports media is more fragmented than ever. Sports organisations control more content, and brands are being presented with more options to integrate meaningfully into sports content.
Collectively, these trends will put a squeeze on sports that cannot think beyond traditional live rights models, provide innovative opportunities, or clearly demonstrate favourable return on investment for partners.
There is clear evidence of innovation in sport’s response to Covid. From the way sport was delivered, to the way organisations were led and operated, we saw organisations develop the capacity to be flexible, to change, and to rethink their operations and value.
We saw digital transformation in industries globally during the pandemic, sport among them. Beyond new online fan engagement concepts and other digital innovations, the most critical outcome was the way that organisations were able to make this happen. Shifting sport from physical to virtual was punctuated with quicker decision-making, higher risk tolerance, and more agile and flexible thinking.
How can this be parlayed into ongoing technological revolution? Organisations’ and leaders’ abilities to bottle the rapid response to Covid challenges may be the ticket to competitive advantage.
Momentum for social returns
Going into 2020, there was great momentum in sport towards delivering value to communities and society at large.
In addition to its role as a tool for physical and mental health, social connection and enjoyment, we saw sport building a strong record of social outcomes via community-oriented practices by organisations and athletes.
Despite an inevitable upcoming window of rationalisation and narrowing focus on ‘core business’, such outcomes must remain a priority. Ensuring positive social outcomes as part of ongoing strategic planning is critical, and all sports stakeholders should play a role in ensuring sports organisations prioritise effective social impacts.
The lessons from Covid have created opportunities to embrace disruption. Sport should not waste the crisis. It should think and act differently in future, based on what it has learned.
This challenging time could be viewed as a disruptive blip before a return to ‘business as usual’, or an accelerator for better leadership, better collaboration, and a more digital and efficient future.
Adam Karg is associate professor and director at the Sport Innovation Research Group, Swinburne University of Technology.
‘Disruptor and Accelerator: COVID-19’s Impact on the Australian Sport Industry’, by Adam Karg, Jonathan Robertson and Scott Dinsdale is available to download and read here.