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How has technology influenced sports?

  • United Kingdom
  • Corporate
  • Sport
  • Technology, Media and Telecoms

10-02-2022

Take a snapshot of the modern day sports industry. What do you see? How we play sport, how we watch it, and how we exploit it commercially is now being driven by an increasingly evolving force – technology. Last year, the global sports technology market reached an all-time high of roughly US$18 billion. By 2026, it is touted to hit US$40billion. Sports tech is big business. So what are some of the main players behind this rapidly evolving industry and what does the future hold?

The exploitation of sports data rights, in particular performance data, is an exponentially growing area within the sports industry that brings cross-sector engagement from a range of stakeholders. Sports leagues, for example, are increasingly engaging data analytics firms to analyse and collect player performance data, which in turn is distributed to third party businesses in the sports betting, fantasy sports and video game worlds. In 2021, we also saw a remarkable shift in the way in which contract negotiations for athletes are undertaken. Manchester City FC’s Kevin De Bruyne is one example, who engaged a data analytics firm to support his negotiations for a new contract with the club. Through the use of AI (specifically, algorithms), De Bruyne was able to demonstrate his future performance and value to the club based on various subsets of past performance data. The result? A new five year contract worth £20 million a year.

For the fans, the demand for quality content and engagement has never been higher. The COVID-19 pandemic has accelerated a paradigm shift in OTT streaming consumption that was already fast moving, and the sports industry certainly played its part. Whilst we may not have been able to watch our favourite sports team in person, through the beauty of live broadcasting on a variety of platforms and devices, enhanced by AI simulated crowds, automated cameras and remote studios, we still managed to get our sports fix.

But demand for quality entertainment now stretches far beyond live sport. Cryptoassets, in particular the advent of non-fungible tokens (NFTs) and fan tokens, are now driving growth in sports across the globe. A significant amount of capital is now flooding the NFT market, leading to the launch of various NFT projects across a number major sports. Currently, one of the most popular sports-related NFT applications is NBA Top Shot – the NFT marketplace for NBA highlight reels, notching over US$700 million in sales in less than a year. Meanwhile, fan tokens are taking the Premier League by storm, with a number of clubs now offering fan tokens that give holders access to a variety of fan-related perks, from voting rights in club polls to access to unique content. 

And last, but certainly not least – esports. The world of esports now rivals that of traditional sports, and professional gamers are not only elite athletes, but superstars. As esports continues to integrate into popular culture, everyone is paying attention – from celebratory investors and mainstream media platforms to luxury brands and consumers. Consequently, the industry has seen a large increase in investment from venture capitalists, and more recently from private equity firms. In 2021, the global esports market was valued at just over US$1 billion, an almost 50% increase from 2020. In 2022, it is projected to reach US$2 billion, with the lion’s share of revenues generated by media deals, sponsorships and broadcasting rights.

Off the back of an active 2021 for sports-related M&A, 2022 is likely to see even greater activity from a combination pent-up consumer demand due to COVID-19 and the rapid rise of technology-driven areas of data, sports betting, cryptoassets and esports.

Eversheds Sutherland has experience in advising a wide range of stakeholders in the tech-driven sports ecosystem, from athletes, clubs and sports leagues to sponsors, media platforms, sports betting operators and investors. If you are interested in having a discussion on sports data exploitation, OTT streaming, sports betting, cryptoassets, esports or M&A, please do get in contact.