A few months ago I jotted some notes down about why gate revenues were declining at sporting events across the United States.
The conclusion is simple: anyone can have the "best seat in the house" by watching a game from the comfort of their home.
And it's not just one game. Thanks to streaming and league passes, anyone can watch multiple games from a variety of sports at the same time.
You can basically have the control center for ESPN set up in your living room. On the television, you have the primary game you're watching. You could stream secondary games on one or more laptops. And if that isn't enough, you can receive live updates via your phone.
Sensory overload? Perhaps.
But this is how your savvy sports fan - especially the ones who gamble - watch games in 2019. And you can bet this trend continues into 2020 and beyond.
To be fair there are other factors that have contributed to the reasons why fans won't show up to a ball game. Ticket prices, conflicting schedules, concession prices, parking, and other factors play a part.
According to a recent PWC report, gate revenues are set to level off - others have predicted these numbers have the potential to decrease in certain sports. This is why you saw a few teams in major league baseball come up with flexible ticket packages to get more butts in seats at the ballparks.
While that stream of revenue hits a plateau, sponsorship will continue to flourish. According to that same PWC report, sports sponsorship in North America is set to grow 3.8 percent annually year-over-year in the next five years.
If their projections are correct, there will be over $17 billion in revenue from sponsorship in 2019. PWC projects sponsorship revenue in 2023 will be around $20.6 billion.
Gate revenues are projected to be $19.1 billion in 2019 and only grown 2.5 percent YoY to an estimated $21.7 billion in 2023.
PWC sited that new inventory and sponsorship activations will play a part in this area's growth. Things like: jersey sponsorships, gambling partners, and digital media platforms.
Personally, there is a chance this revenue stream exceeds that 3.8 percent growth rate. An increase in streaming partners over the next five years could inflate the price of sponsorship assets.
Additionally, new inventory activations like virtual signage - in both traditional sports and esports - could create a seamless and new integration for brands who didn't purchase physical signage within a given arena.
Have you ever looked at what a professional athlete wears in a post-game interview?
Like, really looked closely?
From time-to-time, I will see a logo on a shirt or a hat that will make me go: "hmmm, I wonder what company that logo is from."
On a more subconscious level, one may think: "That athlete endorses the brand behind this logo...therefore that brand must be good."
This scenario happened to myself, and others around Philadelphia this last week.
Bryce Harper, the $330-million man, and the Phillies just capped off a thrilling 11-1 win over the Cubs. Harper clubbed two homers and was the center of the media's attention after the game.
While Bryce fielded questions about his game, no one could help but notice the hat he was sporting in the Phil's locker room.
A navy-blue hat with a duck emblem in the middle.
No one knew what it was. And it became even more interesting when the media surrounded Phillies' ace Aaron Nola, who happened to be wearing the same hat.
Finally, someone piped up and asked Nola about the hat.
Where was it from?
What did the duck mean?
Was there a reason for wearing this hat in particular?
Nola - as modest as ever - didn't have an answer.
A Philadelphia blog - Crossing Broad - did some digging and found that the hats originated from the company Duck Camp. It is still unclear who bought the hats but it probably created a marketer's dream for the guys at Duck Camp.
And even before the Duck Camp hat, Harper donned a Phanatic bandana earlier this season which has spread like wildfire throughout the Philadelphia fan base.
Judging by the title, I already know what thoughts are racing in your mind:
"$975,000?! For just one social media post??"
"I don't care if it's Ronaldo, Michael Jordan, or Santa Clause...not a chance I'd spend that much money for one social media post!"
"That's it, Mike, you've lost your mind."
Let's regroup as I explain why, in reality, you would likely see a return on investment from one social media post from Ronaldo. Despite the seemingly outrageous price.
But before we do that...let's backtrack to where that price point even came from. Last week Hopper HQ released their "Instagram Rich List", revealing which sports stars receive the most cash per social media post.
Not surprising to see Ronaldo top the list at $975,000 per post. You can make the case that Ronaldo is the most recognizable - and the most popular - athlete on the face of the earth right now.
Neymar de Silva Santos Junior, was second on Hoppers' list, falling quite short of Ronaldo. Neymar earns $253,000 less than Ronaldo per social post and has about 50 million fewer followers than his Portuguese counterpart.
So when do we get to the part where I spend 3/4 of a million dollars with Ronaldo and see a return on investment?
In 2017, Forbes released an article about Ronaldo, citing a study conducted by Hookit determining the superstar athlete brought his sponsors $936 million in media value across social media over the span of 12 months.
Ronaldo at the time of the article had the highest following of any athlete on social media - 277 million.
In 2019, that still holds true. Ronaldo has 379 million followers across Instagram, Twitter, and Facebook.
At the time of this Forbes article, Ronaldo leveraged his massive following by crafting 580 sponsored social media posts in that 12-month span. Those posts accumulated 927 million interactions (likes, comments, shares, video views). Giving the final valuation of $1.6 million in media value per post.
See what I did there? Invest $975,000 for a return of $1.6 million in media value. Seems like a good trade-off if you're hitting your target audience and have the money to pull this off.
If that doesn't get my point across then let's take a look at Japanese entrepreneur Tsuyoshi Matsushita, who deployed Ronaldo (and pop-star Modona) as a brand ambassador for MTG and the face of his SIXPAD product.
Granted, Ronaldo did television commercials for the SIXPAD device - which uses electrical contractions to work your abdominal muscles - which led to the sale of over 1 million units in Japan.
Matsushita took a gamble on working with Ronaldo. That is not saying Ronaldo is risky by any means, but what if the product flopped? What if - despite Ronaldo's popularity - the markets decided they didn't want the product?
Regardless of how effective the product is for producing six-pack abs, Ronaldo's sheer presence as the face of the company took this product to the moon. Matsushita's company is now worth over $2 billion. And he can thank Ronaldo for aiding in that rapid ascension.
This proves how ridiculously influential Ronaldo - and most A-List athletes - can be when it comes to endorsing products.
I wouldn't recommend saving all of your companies money and blowing $975K on one social post from Ronaldo. That would be a tad silly.
What I am saying is working with athletes like Ronaldo can yield an ROI for your brand through social media marketing.
So, you're surprised that sports fans aren't going to games anymore?
Not all of them....but more and more continue to opt for the couch and Uber Eats on gameday over a lawn chair and portable grille.
And you mean to tell me that after years of massive media rights deals and focus on creating social media content that you're remotely surprised fans aren't coming to stadiums as often as they used to?
Don't get me wrong, attending a live sporting event is one of the most glorious experiences life has to offer. Watching professional athletes on television can desensitize you to the fact that you are watching the most advanced human specimens on the planet during their peak performance.
And you can only truly appreciate that when you attend a game or match in person.
Hearing Mike Trout's bat crack during a home run. Seeing Odell Beckham Jr.'s speed in the open field. And holding your breath as LeBron James takes flight over a defender.
In-person, those events are perspective-altering. And lead to stories that get passed down from generation to generation.
It's difficult to capture that same essence when you've created a new lifestyle for your fanbases. Allowing them to view any game at any time on their phone, tablet, desktop, laptop, and television. Oh, not only one game, but multiple games at the same time. All in one place.
And then you have to factor in the endless highlights and analysis of these games. From the team's content to media outlets like Bleacher Report, Barstool Sports, the 24/7 networks of ESPN. Like New York, professional sports ceases to sleep.
I could jump on Instagram or Twitter right now, and in under 20 minutes have seen all of the highlights necessary for me to have an intelligent conversation about last night's slew of games with one of my pals.
Watching a full game isn't necessary anymore. Let alone attending it.
So, how do we fix this?
Actually, the better question is how to do enhance this situation? Let's face it, digital is a giant that will stick with us until the end of time. There is no backtracking on digital at this point. Embrace it.
What teams are beginning to realize is that they need to upgrade the fan experience...I mean it is an 'experience' right?
Ballparks and stadiums now offer beer gardens, free wifi, better dining options, and flexible seating. Slowly, we are moving into a state where teams are integrating sports betting into their arenas - just look at Washington, New York, and Chicago.
Make the experience an 'experience'. Give your fans the time of their life. Take their endorphins and dopamine levels and shoot them through the roof.
Do you know what gets sports fans excited? Actually, people in general? Stimulating their senses!
For the last five years or more, teams and media companies stimulated fans with unlimited content. Now, the objective should be to stimulate them the same way. But this time, in person.
There is no way of reversing this media behemoth teams and media companies have created.
And I'm not knocking the ability to view live sports and highlights every second of the day. I love the fact that there is always something to watch and talk about. It's entertaining...they are doing their job and a fine one at that.
I'm here to shed light on the current state of live sporting events. Teams who are taking those steps to create unforgettable fan experiences and enhance their venues are going to come out the winners.
By the way, you want fans on their smartphones tweeting, texting, snap chatting, and Instagram storying your game and venue. Don't dismiss phones, embrace them. It's free content, free advertising, free word-of-mouth publicity shouting "come to this team's stadium because I'm having the time of my life!"
Just remember...increased stimulation through experiences.
How about those Sponsors?
This should be music to the ears of those who sponsor these events. Fans, not just in the stadium, but around the globe are viewing your in-stadium advertisements across multiple platforms at various times of the day.
This is why there is an influx in companies like Hookit, GumGum Sports, and POWA Index whose purpose is to track a sponsor's digital reach during live sporting events.
It has never been a better time in history to sponsor professional sports.
Sponsors are reaching and engaging with their target markets with greater ease thanks to the distribution of sports content through social media, television, and other forms of digital communication.
Enhancing stadiums that attract more fans only increases a fan's likeliness of engaging with any given team's sponsors.
Right now, Instagram is king when it comes to social media marketing for influencers - especially professional athletes.
But I see a new platform emerging that will create even more value for professional athletes - current or retired.
And that is LinkedIn.
Wait, you mean the website that you use to find jobs?
Oh no, my friend. LinkedIn has become the ultimate platform for entrepreneurs and C-Suite executives to connect and create new business. All without leaving their desk.
According to Foundation Inc., LinkedIn has over 500 million members. 61 million are senior-level executives, and 41 million are in decision-making positions.
LinkedIn CEO Jeff Weiner has said his goal is to have the platform reach 3 billion members. So, technically, LinkedIn is 'just getting started'.
how do athletes get involved?
It has been very subtle, but I've noticed a few professional athletes - some retired...some active - make their way to LinkedIn.
Some former players include Alex Rodriguez, Ray Lewis, Steve Young, Ryan Howard, and Tiki Barber.
Others that are still playing: Steph Curry, Andre Iguodala, Braxton Miller, and Marcus Peterson.
It's a small percentage, but there is tremendous potential for athletes who want to pursue entrepreneurship off the field. And the best part, is LinkedIn is still in the process of 'being discovered'.
NFL wide receiver, Marcus Peterson, is a prolific user of LinkedIn and agrees we are only seeing the tip of the iceberg when it comes to the adoption of this platform...
"I think maybe people will start noticing it probably end of 2020 or going into 2021. It is definitely a hidden gem and it is cheap to invest in it now!"
Peterson certainly invests quite a bit of time into the platform. He is a prolific user, posting content on a daily basis and always engaging with his connections.
"I’ve always had my LinkedIn account but as everyone else probably thinks it is for 'finding a job'. But I was introduced to the content side of things and how to monetize the app February of this year," Peterson said. "Ever since then so many opportunities and connections have been made! I would honestly say for my off-the-field endeavors and my motivational clothing brand [MP Motivational Apparel] is where 70 percent of my sales and opportunities come from."
Peterson is a perfect example of how an athlete can leverage LinkedIn's organic content algorithm to build a sports-centric entrepreneurial brand. And there's no secret behind Peterson's success. He approaches LinkedIn the same way he does with Instagram and Facebook.
"I use [LinkedIn] just like Instagram and Facebook...on more of a professional mature level."
His advice to other professional athletes looking to leverage the platform is to "connect with as many people as you can".
Outside of building a brand on LinkedIn, athletes will find the platform is a gold mine when it comes to business opportunities to invest in.
There are a plethora of startups either looking to raise money, work with professional athletes as influencers, or a combination of the two. Take a look at Body Armor, who received an investment from the likes of Kobe Bryant and Mike Trout.
Bryant turned his $6 million investment into $200 million over the span of three years.
Now imagine - as a professional athlete - if you had the next BodyArmor knocking at your door. Or maybe leaving a message in your LinkedIn inbox?
Prime Sponsor Consulting offers it's services to athletes who are looking to take advantage of LinkedIn's bountiful platform of business opportunities.
We will look to enhance your current profile (or make one from scratch) and build your base of connects through unique content curation and distribution.
Be sure to reach out to Prime Sponsor today, if you are serious about taking the next step in your entrepreneurial career.
Image via: marcustpeterson/Instagram