The trends that characterise the world of sports — and how business can get in on the game
The business of sports is a vast, complex industry that extends far beyond what is visible to spectators, driven by everything from globalisation to geopolitics to digitalisation.
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A nail-biting penalty shootout. A sprint title decided by mere milliseconds. A championship that comes down to the wire. From baseball to badminton, sport has a remarkable ability to unite millions of people around the world and leave them on the edge of their seats, whether they’re watching the action unfold in person or tuning in from afar.
Behind the scenes, the business of sports is much more intricate than many fans may imagine. It is a vast, complex industry that extends far beyond what is visible to spectators, driven by everything from globalisation to geopolitics to digitalisation. Below, we pull back the curtain on five key business trends that define the world of sports today.
While sports thrive on unpredictability and passion, it increasingly relies on financial support – be it in the form of private equity, venture capital, sovereign wealth funds or deep-pocketed individual investors – to grow. A prime example is the US$1.9 billion renovation of Santiago Bernabéu Stadium (football club Real Madrid’s home turf), which would have been impossible without significant external financial backing.
In the world of fashion, luxury apparel brands have been ramping up their partnerships with sports teams and individual athletes (e.g. Louis Vuitton and freestyle skier Eileen Gu; and Rolex and tennis player Carlos Alcaraz). Teams and athletes gain prestige and financial support, while luxury labels access a broader, more diverse audience and enhance their cultural relevance. Collaborations with companies in sectors such as nutrition, healthcare, music and education are also accelerating, increasing the connections and blurring the lines between sports and other industries.
[This article is republished courtesy of INSEAD Knowledge, the portal to the latest business insights and views of The Business School of the World. Copyright INSEAD 2024]