Top Sports Trends Heading Into 2023

This is an in-depth piece on where sports is headed in 2023.

  1. Rise of India
  2. Sports Law Trends
  3. Athlete Ownership
  4. Web3
  5. Other

Incredible content lies within and I highly suggest you read the whole thing at some point (maybe break it into segments).

Let’s Dive In 👇

Emergence of India

There has been a lot written about the rise of India in the global tech world.

The main points:

  • ~750 million people with a smartphone and ~400 million more to come online (more than the entire population of the USA)
countries with most internet users
India is 2nd behind China
  • Huge Gen-Z population
    • India is the youngest country in the world with an average age of 28
  • Favorable macro-economic climate
    • The cost of living and operations is relatively low.

But, what about Indian sports?

Almost every single sport in the world has an India plan.

This makes sense as there are ~1.4B people in India.

Cricket has ~95% market share — which has led to a huge increase in valuations of IPL franchises (some are now worth over $1B USD).

But here’s where it gets interesting…

Other sports (kabaddi, football, basketball, etc) are growing much faster than cricket in the below-35 age group.

This presents a huge opportunity for fan engagement and the rise of niche sports.

Rise of New Sports

You need to create sporting heroes to create a sporting culture. Traditionally, India has struggled to create global sporting superstars, except in cricket.

Indian cricket

But with the rise of new sports (Padel and Pickleball in particular), there’s an opportunity in India. This could have larger ripple effects, and lead to a more robust sporting ecosystem across all sports.

The big question…

Can technology be a driving force?

Analytic, performance, infrastructure, fan engagement, and content companies are ready to be created (and very much needed).

India’s sports infrastructure and leagues are lagging behind developed nations but technology can be the difference in a fast-growing country with favorable demographics.

India Is Ready for Takeoff

China looked like the next great sporting country, but India has quickly replaced them over the last few years.

An interesting opportunity is the increase in sports revenues married with the fact that India is growing rapidly in the development (and use) of technology.

The country has become a major player in the global technology industry, with a thriving startup ecosystem and a large number of well-educated technology professionals.

India is home to a number of major technology companies, and it has also attracted a number of foreign tech firms looking to tap into its vast talent pool.

number of unicorns in india
Via Venture Intelligence data

The final few areas of interest in sports and investment in India is the fact that it is a democratic style of government and has a large (and growing) English-speaking population.

India has an exciting decade in front of it.


Sports Law Heading into 2023

When things happen, you get news. When things happen consistently, you get trends.

2022 was no exception in the legal realm of sports.

We saw a host of dramas spark controversy across a variety of legal areas like the DeShaun Watson saga, the MLB’s negotiations to save the ’22 season, LIV Golf and the PGA tour… not to mention the battlegrounds of name, image, and likeness (NIL).

Some were one-and-done, but here are three trends that came up this year, and predictions for how they’ll unfold:

We’re getting closer to uniformity in the NIL space

Ever since the US Supreme Court’s 2021 decision in NCAA v. Alston — which allowed college athletes to commercialize their NIL rights — this sector of the industry has been something out of an old western movie.

States aren’t uniform in their NIL legislation, leading to gaps and potentially uneven playing fields between states.

2022 also gave birth to NIL collectives — which are 3rd party organizations formed to assist schools in securing deals for players.

ncaa paying athletes

The NCAA continues to cling to its definition of amateurism, but dropped an Interim Policy in 2021 and has issued clarifications throughout 2022.

However, the NCAA is leaning towards working with Congress to implement a national standard, at least their website says so.

It’s also no coincidence they closed out 2022 by appointing Charlie Baker as the organization’s next president, a long-time politician heralded for his bipartisanship.

The trend here is for the federal government to get involved, which could give us some unification across the board sooner than we think.

Pay for play, but it’s different this time.

The issue last came up in a case involving Northwestern University football players in 2015 that got punted away.

In 2022, the National College Player’s Association filed a charge against the NCAA, the USC, and the Pac 12 as joint employers with the National Labor Relations Board advocating for the classification of college athletes as university employees.

Fast forward to December and the NLRB found the charge has “merit,” and will move the case forward.

Though the case will get drawn out and be subject to a lengthy appeals process, the classification of student-athletes as employees could have major implications.

One of which is the right of students to unionize and potentially get revenue from some of the massive network deals like the Big 10’s recent 7-year, $8 billion deal.

power 5 media rights deals

Also, the Pac-12, of which USC is a member has started negotiations for the next deal set to take place in 2024. Certainly, a development to watch going forward.

Increased Due Diligence, Especially in Crypto Deals.

From a transactional perspective, dealmakers across all areas of sports in 2023 and beyond are going to refocus their attention on one thing in particular: due diligence.

The marketing and sponsorship deal landscape is trending away from one-off product endorsements and strongly towards developing long-term partnerships.

The collapse of FTX was a wake-up call, as the company’s abrupt spiral into bankruptcy undermined extremely lucrative deals, including those with the MLB, Miami Heat, and celebrity endorsers including Tom Brady and Steph Curry.

(FTX and these endorsers have been pulled into a lawsuit, which could potentially subject the parties to subpoenas and having to disclose personal info like texts and emails in court…talk about risky business). 

The number of available deals is at an all-time high given the stock of digital products companies can sell, the emergence of athletes’ personal brands, and the channels of distribution.

That being said…

Leagues, teams, sponsors, and athletes will spend more time in vetting deals, especially with crypto partners.

Merger and acquisition deals will experience higher diligence as well.


Athlete Ownership

Athletes garnering equity upside in companies and sports teams is one of the coolest trends in sports right now.

It’s no longer just about endorsements and cash, but relationships and long-term partnerships.

Pickleball has been the perfect example with 15+ pro athletes becoming majority shareholders in teams.

athlete pickleball owners

One of the most fascinating case studies to watch going forward is the rise of black ownership in sports companies and teams — which has not been the case throughout much of American history.

But what does that look like? And will it change anything?

1. The Flip in Dynamics

Traditionally, the product has been the athletes used by owners to sell entertainment to the audience.

But what happens when the product becomes the owner?

It raises a handful of questions…

  • Does the tide shift?
  • How will the audience receive this?
  • Will the product continue to influence youth all around the world?
  • Will the owners have to disavow their roots to run the business?

Michael Jordan and Magic Johnson are some current examples — but what happens if all the owners are former athletes?

2. Does culture drive business or does business drive culture?

The common narrative amongst most players is ownership. Whether it’s a team, agency, clothing company, media project, investment arm, etc.

Will any of the athletes take the deep steps to dive truly into enterprise entrepreneurship?

Not their business partner but actually them doing the work.

Will the same vendors and advertisers work with the athletes? Will the city finance its real estate? Will there be proper contracts?

I think it’ll be the largest step forward in the history of blacks in America.

I think the athletes will get into the culture of business so they can leave the current business of selling culture.


Web3 Going Mainstream In 2023

2022 was a rough one for the web3 world.

We saw crypto companies such as FTX, BlockFi, and Celcius close their doors losing millions of consumer dollars in the process.

miami heat ftx deal

We witnessed lawsuits against the well-known NFT project BAYC and the multiple celebrities who were involved.

And we can’t forget the numerous hacks, scammers, and failed projects throughout the year.

I’ll be the first to say that all of it was necessary and the future is still brighter than ever, especially when it comes to sports and web3.

Here are a few trends to keep your eye on for 2023:

NFT ticketing & digital collectibles

Sports organizations are starting to adopt web3 technology in a major way.

I believe ticketing is the next phase of this happening at scale. We’ve already started to see sports teams launch their own NFT collections to further engage fans.

Using NFTs as tickets has a number of pros.

It’s verifiable on the blockchain which can help prevent fraud. It’s much more efficient. It can be used as an additional revenue stream for the team if they’re resold or include digital upgrades/in-game utility.

Fan engagement in the Metaverse

The World Cup was a huge precursor to the metaverse taking shape in sports.

Several metaverse platforms partnered with FIFA to provide digital, immersive experiences for millions of fans worldwide.

This included experiences such as access to member-only digital lounges, access to virtual mini-games, as well as opportunities to win trading cards, and other exclusive NFT “moments.”

Brands such as Roblox, Upland, VISA, and Budweiser all participated in these events.

It is also indicated the industry will hit $80 billion in market size by 2030.

Beginning of Smart Contracts

Using blockchain technology for athletes’ contracts and rights is making more sense these days.

The blockchain is decentralized, meaning that no single entity has control over the data.

smart contracts and sports

It makes it difficult for anyone to manipulate the data or access it without permission and the blockchain is highly efficient, with transactions of information taking place instantly.

Also, the blockchain can be cost-effective, as it eliminates the need for third-party intermediaries, such as banks, lawyers, and agents which can be expensive.

Furthermore, blockchain technology can help athletes to monetize their IP rights by creating digital tokens that can be used to purchase rights that can then be utilized by the end user in additional creative ways.

Right now, 10 athletes are being paid with cryptocurrency, including Aaron Rogers, Odell Beckham Jr., Klay Thomson, and Andre Iguodala.

Blockchain technology is providing a new way for athletes to protect and monetize their rights and will have a major impact on how the sports industry will continue to do business.

Sports fan tokens

Crypto “fan tokens” have the ability to give fans the right to vote on certain organizational decisions.

Fan tokens operate as a kind of digital membership pass that gives fans a right to be recognized and have a voice and a vote in the decisions of the team they support.

They can vote on things such as:

  • the music in the stadium
  • design of the jersey for the next season.

The more tokens you own, the stronger your vote.

I believe more teams will look into this as a way to incentivize and reward fan loyalty and engagement.

Community is the new currency.


Other top trends heading into 2023:

 

 

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