By Gary Symons
TLL Editor in Chief
With the Sports Licensing and Tailgate Show coming up, we’ve turned our attention to the ways the sector is changing in the face of pandemic pressure and technological change.
Professional sports licensing, after all, took a savage beating during the pandemic in terms of revenue, but TLL believes the industry also used that time to rethink how it is doing business.
As a result, in 2022 we are seeing the emergence of new mega trends that are already reshaping the face of sports, and of sports licensing.
By the end of 2021, we saw that most professional sports leagues and college athletic programs had returned to a relative sense of normalcy. Gone are the days when NHL teams played in a ‘bubble’, and NFL games were broadcast with no fans in the stands.
The Tokyo Olympics also managed to stage a successful Games, although a year late, and just this past month the World Cup in Qatar was a mammoth success as the drama on the field overshadowed the doubts many held about holding the event in a country with serious human rights issues.
As a result of the successful return to sports stadiums, the sports licensing market is surging once more. The recent report Licensed Sports Merchandise Market Global Industry Trends says the sector will grow from $29.9 billion in 2021 to reach $398 billion by 2027, a CAGR of 4.9%.
More importantly, it’s clear that sports industry executives have used some of their downtime to consider their place in the world of commerce and consumer products.
With no further ado, let’s take a look at TLL’s list of Top Sports Licensing Trends.
- The story of the year in 2022 had to be the explosion of Name, Image and Likeness deals signed. This came about because the NCAA reversed its long-held policy of preventing student athletes from earning money from NIL deals, opening a big barn door of new opportunities for college programs and athletes alike.
In the year following that policy change in mid-2021, close to a billion dollars in NIL deals were inked with various athletes and programs. Some college athletes in their early 20s became multimillionaires almost overnight.
Another big change was that social media savvy athletes turned their popularity into gold by creating popular accounts on TikTok, Instagram and YouTube.
NCAA Tournament Scores $20–35 Million in Licensed Retail Sales
And, while the male athletes in big money sports like basketball or football dominated the NIL deals on the ground, it was the women who led on social media, taking eight of the 10 top spots for the most money earned per post.
The woman at the top of the pile was basketball star Sedona Prince, who earned an average of $80,000 per post!
This trend is just gathering steam. This coming year, watch for an all-out push in the social media space from athletes, who will increasingly engage their own social media marketing teams in a world where social media income could rival or even surpass the salaries of major league athletes.
2. The sports industry dove into the NFT world with all the grace of Greg Louganis off the high board. Starting with the NBA’s hugely successful Top Shots program, sports teams and leagues added value to NFTs and other digital collectibles, rising them above the simple pictures of computer generated cats that rose and then plunged in value in 2022.
It’s true that NFTs are almost a dirty word these days due to that crash, but TLL does not believe the day of digital collectibles is done by any stretch.
The trend that started in 2022, we believe, will evolve in coming years as sports organizations have shown they know how to create items that collectors want, and that they have also figured out how to add real world value to virtual world collectibles.
3. While the big league sports are back, one trend we are watching is the astonishing growth in esports.
These days, the top gamers heading the esports leader boards are seen as true athletes, and even have their own trainers and nutritionists to ensure they’re in peak form in games where milliseconds make the difference between victory and defeat.
Certainly we’re not yet at the point that esports champions have become household names, but it is true they enjoy a significant and growing fan base. According to Newzoo, the video gaming market surpassed $150 billion in revenues, and esports surpassed the $1 billion mark, growing to an estimated $1.8 billion in 2022.
More importantly to the future of eyeballs is the growth in eyeballs who are watching this relatively new sport. Viewership was estimated at 450 million people in 2019, which is 4.5 times more than watch the Super Bowl in a given year, and growing to $495 million last year.
As well, esports have a lot of money behind them, as the competitive events have a significant impact on sales for various video games.
For example, the international Dota 2 tournament offered a prize purse of $34 million, while Epic Games put up $100 million in prize money for tournaments in 2019.
And if you think the audience for esports is only online, think again. Events like the annual League of Legends world championship feature massive crowds and even their own version of a halftime show, which in 2022 included a performance by Lil Nas X as a gigantic floating hologram.
4. The battle for streaming rights to sports will continue to heat up.
In November we heard that Netflix is exploring major investments in the live streaming of sports broadcasting, and has placed bids for some sports leagues, and for the ATP tennis tour.
The tech giant Apple, with its own nascent Apple+ streaming service, has already streamed a full season of Friday night games, and the company also bought a decade’s worth of streaming rights for soccer, which will start airing in 2023.
Not to be outdone, the Amazon-owned Prime Video successfully bid for the streaming rights to NFL Games on Thursday nights, and renewed those rights in subsequent years.
One concern is that the availability of game day broadcasts could become so fragmented that fans would have to pay for several streaming services in order to watch a full season.
For that reason, TLL expects there will eventually be a consolidation of these types of deals, so you may see Amazon bidding for the NFL, while Apple carries soccer, and Netflix airs baseball, just for example.
5. Women will finally get, so to speak, a league of their own.
Sure, that concept was the basis of a comedy film not so long ago, but today the fan engagement for women’s sports is increasing by leaps and bounds, and women’s sports leagues are increasingly seeing success.
For example, current Canadian women’s national soccer team captain Christine Sinclair and former national team member Diana Matheson earlier this month announced plans for an eight-team Canadian women’s pro soccer league.
The Premier Hockey Federation also recently announced plans to double the salary cap for the upcoming season to $1.5 million per team, for their seven-team league.
And earlier this year, the US women’s soccer team won its pay equity class action lawsuit in January against the US Soccer Federation. As a result, the federation will now provide equal pay to both the men’s and women’s national teams.
Meanwhile, in basketball, the 26-year-old WNBA notched record television numbers during the 2022 season. The average salary in the league is now more than $71,000, and the WNBA has announced it is increasing its schedule to 40 games next year. The league has also announced it will play a 2023 pre-season game in Canada, and some are touting Toronto as a strong candidate for the league’s next expansion.
The change may not be happening fast enough … but it’s definitely happening!