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.
- Transversality
The intersection of sports and other industries, including media, finance and fashion, is a goldmine for collaborative ventures. The majority of sports teams’ revenues are derived from global television rights, which were estimated to be worth around US$56 billion in 2023 (including non-team sports). The transition to streaming has reshaped the landscape, creating fresh investment possibilities and redefining how sports is consumed and monetised. Think Netflix’s foray into sports documentaries such as “Formula 1: Drive to Survive” and “Break Point”, or its livestream of the landmark boxing match between Jake Paul and Mike Tyson that drew 108 million global viewers.
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.
- Internationalisation
The globalisation of sports cuts across all other trends mentioned in this piece, and serves as the driving force behind them. Football is a prime example of a sport that has shed its local roots to become a global, multi-billion-dollar phenomenon that is now one of the most commercially driven sports in modern culture.
Regardless of the sport, athletes, teams and leagues must now think beyond their local fan base and adapt their product to audiences across different countries and time zones. This doesn’t just entail optimising kick-off times so that as many people as possible can catch a game live. It also requires global outreach and strategically building an international presence to remain competitive.
This can be achieved through tweaking formats to adapt to other cultures and audiences; increasing the physical presence of a sport within a country, such as sending teams to play exhibition games in different regions during the off-season or nations hosting major sporting events; and initiatives to support local fan engagement.
- Professionalisation
Unlike the days when club ownership often lay in the hands of devoted fans or local businessmen, the landscape is now more complex. This demands a new level of professionalism to handle sports’ sophisticated infrastructure. The rising returns and valuations of sports teams have investors – from private equity to sovereign wealth funds – flocking towards the sector, seizing opportunities for substantial returns and cultural influence.
Nowhere is this more apparent than in the United States, where investors have poured into the National Football League, the National Basketball Association (NBA) and Major League Baseball, among others. Women’s sports teams – long overshadowed by their male counterparts – are also getting in on the action, with billionaire Michele Kang recently investing millions into football clubs across the US, the United Kingdom and France.
Investment in infrastructure is also propelling the professionalisation of sports, elevating standards for training, competition and event management to lure top-tier talent and foster a culture of excellence. European football is seeing a new wave of stadium developments, with clubs including FC Barcelona, AC Milan and major Premier League teams in the UK transforming their stadiums into year-round multi-purpose entertainment hubs to propel financial growth.
- Digital transformation and AI
Digital technologies have and will continue to transform how sport is consumed. Social media has emerged as the primary form of fan engagement, content consumption and marketing strategies, with over 90 percent of Gen Z fans using it to access sports content. Beyond teams, star athletes are harnessing social media as a vital source of revenue. Take footballer Cristiano Ronaldo, who has amassed more than 648 million followers on Instagram and reportedly earns around US$3.23 million per post.
Younger fans are more likely to watch highlights online or interact with athletes via social media than watch sports live. Sporting organisations are therefore using streaming and video platforms such as Twitch, TikTok and YouTube Shorts to spotlight engaging off-the-field moments – from player interviews to behind-the-scenes snippets – that resonate with a Gen Z audience.
In addition, advanced technologies and innovative data-driven methods are being deployed both on and off the field. Data analytics can provide valuable insights for improving team performance – be it AI-optimised training programmes, scouting reports and game strategies or using predictive analytics for injury prevention. On the commercial side, the technology is used to inform dynamic ticket pricing, personalise fan interactions and enhance the in-stadium experience. As a result, partnerships have flourished between sports teams and data companies (the NBA’s Golden State Warriors teaming up with Oracle and Formula One’s Aston Martin collaborating with Arm, to name a couple).
- A sustainable future
Beyond performance and profit, the sports sector is extending its focus to encompass social responsibility and environmental stewardship. The former involves promoting inclusivity by empowering women in sports, as well as addressing poverty through community engagement such as investing in youth sports and education in less economically developed countries.
Women’s elite sports are forecasted to generate over US$1 billion annually, with the value of the US’ National Women’s Soccer League and Women’s National Basketball Association projected to grow by at least US$1.6 billion over the next three years. To ensure consistent and sustainable growth, investment must be directed at the right places, including encouraging fan loyalty, player welfare, competition and allocating primetime broadcast slots.
On the environmental front, the sports industry has launched numerous initiatives to mitigate its sizeable carbon footprint and become more sustainable. For instance, the organisers of last year’s Paris Olympics pledged to halve greenhouse gas emissions compared to previous Games. The entire event was powered by renewable energy, and 95 percent of competition venues were either pre-existing or temporary, with the latter designed to reduce their impact on biodiversity.
Elsewhere, sports teams have embraced “green” stadium designs that feature solar panels and water-efficient fixtures, while Formula One is currently developing a sustainable fuel to be used in its racing cars by 2026.
More than a game
The world of sports encompasses more than athletes pushing their physical and mental limits in the pursuit of excellence. They are backed by a complex network of professionals, businesses and communities that are working in tandem to drive the industry forward.
In parallel to the professionalisation of the sector, investors are recognising sports as a high-potential asset class. What was once perceived primarily as a pastime has evolved into a dynamic, multifaceted industry, offering opportunities to build impactful careers and achieve even greater innovation and growth.
Read an extended version of this article.
“INSEAD, a contraction of “Institut Européen d’Administration des Affaires” is a non-profit graduate-only business school that maintains campuses in Europe, Asia, the Middle East, and North America.”
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