The inaugural Sports Investment Summit was recently held. 30 speakers and several hundred delegates from Australia and overseas probed the future of investment in sport. I was privileged to join the Swimming Victoria delegation. Here are my takeaways.
The future is already here
The ‘good old days’ of huge sponsorship deals are behind us. “If we don’t run sport like a business we will move backwards”. “If you think that the problem is money then you probably don’t understand the problem deep enough”. “We had to develop new muscles to be not grant dependent”. “Think beyond the bottom line, seek non-financial benefits that can improve your sport in other ways e.g. experience”.
Evolve with markets
“For younger audiences it’s not all about anthems and medals”. “To be successful in philanthropy you must meet people where they are at”. “Womens sport is seeing strong growth”. “Sell experiences not assets”. “Launch new formats”. “Create fans”. “Fan base is an asset”.
The power of stories and happiness
“Athletes can be worth more than the sport”. “It’s all about the stories”. “Tell better stories”. “Generate affordable content for platforms”. “Demonstrate the number of people connecting”.
Sport as both a customer and supplier
Much traditional funding is based on sport being funded for its own benefit. The importance of sport becoming more a solution to others’ problems was a recurring theme. “We can no longer rely on the goodwill of investors and government, we must look at it through their eyes”.
Some examples of the value to government and commercial organisations included healthier population, diplomacy, engaging 18-35 year demographic.
“Look through the eyes of a customer”. “What is sport’s unique proposition to society?”. “Australia is a good market for multi-nationals to test”. “The Council wants to cater for sports that have never been played in Australia before (due to immigration)”. “Elections are important for getting more $ into the community”.
“Many local governments facing flat revenues and growing costs. Don’t want to make a profit but need to understand how it will be paid for”.
Real estate, precincts and multi-sport consortium assets as an investment vehicle
“Real estate is often a significant part of the transaction”. “Developer contributions are more important than grants”. “Develop a sharing mindset”. “Know what you want, stay in your lane, and allow other parties to stay in theirs”. “Work with the right partners to get the precinct humming from day 1”. “Set yourself apart by showing what you will bring to the table”.
The opportunity for asset re-use e.g. LA Summer Olympics 2028 is not building any new venues, Brisbane 2032 will use a drop-in pool.
“Don’t wait for legacy, do it now”.
The power of tech and data
Seamless experiences and digitally connected communities were the more powerful examples of tech. “We invested in tech and then let the tech invest in the league”. In USA fans movement and engagement triggers around stadiums is closely tracked. The power of great CRM. “Segment audiences”
A winning case for a commercial partner it strongest when underpinned by compelling data evidence.
Artificial Intelligence (AI) was barely mentioned, most probably because it is yet to have a major impact on the commercial side of sport. Watch this space!
Be both visionary and incremental
Focusing on the short term keeps sport alive, but major long term initiatives can ‘move the needle’. These can easily take a decade from idea to reality, with many twists and turns on the journey. Vision, persistence, collaboration and a long term mindset are required.
Multi-year development funds and funding.
There were some surprising omissions
From the viewpoint of someone who moved into the sporting sector later in their career after several decades in mostly commercial international business, there were some issues either not discussed, or only briefly mentioned.
Tomorrow’s Australia
Sporting organisations can feel like religions – with their own beliefs, rules, venues and cultures. This can translate into mindsets and behaviours heavily based on traditions and finding new followers. This is great for stability and comfort, but can constrain growth.
Rather than fighting the wind, much of the discussion was about adjusting the sails rather than altering the course.
How to balance pushing what we already have vs. following demand to see where it leads?
The Australian population is growing. Supermarkets, banks, telecommunications, energy and other essential services are also growing. Sport is arguably another essential service so it also has the opportunity to thrive.
There must be a way, but what got us here isn’t going to get us there.
Future focussed governance
A progressive delegate commented to me over coffee that most Boards are very compliance focussed and that can limit appetite for innovation.
Compliance will keep us out of jail. Innovation can lead us to a better place. Both are critical, but Houston, we have a problem if we are hoping that fear of failure alone is somehow going to create a better world.
Structural reform
When revenues come under pressure accountants scrutinise costs even closer!
Many sporting entities are quite small and the structure appears as a collective of cottage industries. Traditionally in Australia the challenge of distance has been managed via a national / state / area / local span breaking hierarchy.
In today’s digital world there should be opportunities to eliminate layers to unlock cost and bureaucracy benefits.
There is a growing supply of quality shared services. Is this a significant opportunity for sports?
Unleash the grass roots springboard
The summit showcased a wonderful local case study from Wyndham City.
Innovation can occur anywhere. In reality it is often easier at the periphery than at the centre of organisations.
Many local sports organisations are run by volunteers, from diverse backgrounds, who contribute for a year or two, fuelled by a common passion to deliver something to their family and local community. This is fertile ground for growth.
As sports are we managing to a planned future, or leading to create the conditions for growth to occur?
Maybe success requires less management and more leadership.
So what?
For me in my back office support function, I have the same determination to enable world leading performances as the athletes I support.
