A new report from Altman Solon reveals a looming crisis for sports rights holders. With 66% of fans struggling to access content and only 19% of executives believing the industry is responding effectively, the current strategies risk alienating younger audiences. David Dellea, director of the sports practice at Altman Solon, highlights the concern: “We’re getting to a point whereby making it difficult for many fans to access content has gotten to a point whereby some of the younger generation are losing interest. Are we getting to the tipping point?”
The research, based on a survey of 220 senior sports executives and 3,000 consumers, indicates 65% of executives worry about maintaining live sports’ relevance, particularly due to access issues impacting younger viewers (75% of 18-24 year olds report challenges). While social media engagement is often cited as a positive, Dellea cautions against complacency: “We never have to forget that 95 plus percent of the sports industry lives off live consumption. It doesn’t live off highlights. That’s not a huge revenue driver, it’s just a minor one. It’s very dangerous to just kind of throw live out of the window. Because one drives revenue, the other one doesn’t.”
The study also reveals that 43% of consumers are interested in sports but unwilling to pay current prices, with some facing annual costs as high as $816 to follow a single league. Formula 1’s successful adaptation serves as a compelling example. Its strategic moves, including the Netflix documentary series “Drive to Survive,” expanded US presence, and its F1 TV platform, have reduced the average viewer age from 44 to 32 while boosting revenue from $1.8B in 2017 to $3.2B in 2023. Dellea notes: “F1 obviously is a product that underwent a tremendous amount of transformation since the change in ownership… an amazing example of someone who early on understood the power of on-demand and storytelling through series like Drive to Survive and literally using that as an amazing funnel to drive people back to live sports.”
Direct-to-consumer (D2C) offerings are another key element. Dellea emphasizes their strategic value in negotiations and experimentation: “The question mostly today is less so should you have a direct-to-consumer kind of proposition? The answer is always yes. The question is how do you size it? How do you make it sustainable?” The traditional bundling model, successful for four decades, is being disrupted by the streaming revolution, altering consumer expectations. Dellea observes: “Consumers are probably spending less for a wealth of access to content they had before.” This necessitates a rethink of distribution models, prioritizing accessibility alongside revenue. “Rights owners are now starting to understand that it’s not just about optimizing revenues. It’s about really thinking big and thinking how do we sustain the long-term interest and consumption of our sport.”
The shift is attracting new investors, and 62% of sports executives view technology solution providers as the most attractive investment opportunity. Addressing the challenges requires expanding distribution, flexible pricing, stronger digital community engagement, and prioritizing sustainable fan growth. While the monopolistic nature of sports rights can hinder adaptation, the COVID-19 pandemic unexpectedly spurred transformation. Dellea concludes: “Rights owners are now starting to understand that it’s not just about optimizing revenues. It’s about really thinking big and thinking how do we sustain the long-term interest and consumption of our sport for generations to come.”