12 APRIL 2017 Consulting®
It’s a business.
Professional athletes solemnly utter this phrase
when they need to remind fans—and themselves—
of the game’s harsh bottom line. The longtime fan
favorite is traded to make room for a promising
rookie. The aging superstar is nudged out the door
so his team ducks the cost of his next contract. The
low-profile coach adored by his players gets axed
when a superstar coach with better box-office appeal suddenly becomes available.
These days, veteran sports consultants find
themselves putting a cheerier spin on that same
line: “Hey, this really is a business!”
Consultants whose work with professional
leagues, teams, events (think the Olympics) and
other sports-industry clients dates back a decade
or more can recall a pre-Moneyball era when
sports teams were considered trophies or hob-
bies. “It used to be that an owner ran a business
and operated a sports team on the side,” says
Deloitte Sports Consulting Leader Pete Giorgio.
“Today, the sports team is the business.”
And a highly lucrative one at that, judging
from the soaring valuations of National Basket-
ball Association (NBA) teams, Premier League
clubs and other sports teams as well as the stag-
gering media rights deals signed in recent years.
The maturation of the sports industry is also evi-
dent in the growing number of dedicated Sports
Practices taking shape in more consulting firms.
That said, sports will never go toe-to-toe with
financial services or manufacturing from a con-
sulting perspective. The sports industry “is very
much in development mode,” notes The Boston
Consulting Group Senior Partner and Manag-
ing Director Rohan Sajdeh. “I wouldn’t say that
every league and every sport has a meaningful
strategy-consulting budget. But once upon a
time, we weren’t even in the picture.”
It’s worth focusing on the developing sports-
consulting picture for several reasons. First, the
industry involves a diverse collection of organiza-
tional types. “It’s not at all a simple ecosystem,”
asserts Bain & Company Partner David Mortlock,
who notes that his firm works with teams, leagues,
media companies, technology companies, advertising agencies, brands and investors on sports-related engagements. Second, sports businesses appear eager to innovate. Third, sports clients, more
so than most other industries, have demonstrated
that they’re open to publicly discussing their work
with consulting partners.
The Playing Field: $76 Billion by 2020
“We’re seeing continued growth in the [sports]
market on a global scale,” reports U.K.-based
EY Director and Sports Industry Group Leader
Tom Kingsley while noting that some regions
and sports types are growing faster than others.
A relatively recent sports category, eSports (i.e.,
competitive gaming), is enjoying extraordinary
growth, notes Kingsley’s colleague, Alexandre
Rangel, Principal, Sports and Major-events industry for EY South Africa.
The sports market is currently most developed
in the U.S. and Europe, although Latin America
and Asia are closing ground. “We’re starting
to see more engagements in Asia and in Latin
America,” Sajdeh says.
According to the 2016 edition of the PwC
Sports Outlook report, the North America sports
market reached $63.9 billion last year and is projected to increase to $75.7 billion by 2020. PwC
organizes the market into four categories: gate
revenues, media rights, sponsorship, and merchandising. Those four segments of the North
American sports market represent roughly half
of the global market, notes Adam Jones, director,
PwC’s Sports Advisory Services.
“More than 70 percent of the global sports
market is generated by five sports: association
football, American football, motorsports, baseball and basketball,” Jones continues. “The five
sports with the highest global growth rates over
the next five years include fighting sports, basketball, association football, hockey, and rugby.”
Jones points out that rapidly growing emerging areas such as eSports and fantasy sports could