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The sports industry is ever-evolving, and in 2023, we can expect to see several exciting trends emerge in the sports business and sports tech market, including the continued growth of Web3, NFTs, and Blockchain technologies, the rise of mixed, virtual, and augmented reality sports experiences, and further steps in Metaverse explorations. Here, we will see a focus on expanding the fan experience through new technologies and tapping into new ways of streaming sports content. The industry will look for alternative finance models and experiment with AI and immersive 3D content. As usual, there will also be a focus on sustainability and the adoption of ESG practices.
This article delves into these trends and discusses their potential impact on the sports industry.
Let’s start the prediction with one of the latest mass hypes: Artificial Intelligence (AI). Most of you have probably already had a personal experience with rising AI tools, such as OpenAI and ChatGPD. As the sports industry begins embracing technology, we expect to see more sports brands, clubs, and companies equally experimenting with new AI tools for a variety of purposes, including content creation and operations.
A sports team or a sponsor may use AI to generate content for social media or personalised content for its fans, such as customised highlight reels or personalised newsletters. I expect AI-created sports campaigns in 2023, not only for the big leagues. On the one hand, this will help save time and money and, on the other, communicate innovatively. AI can analyse large amounts of data and provide insights and recommendations for teams and leagues to optimise their operations and make better-informed decisions. It automates and optimises various operational tasks, such as ticketing, merchandising, scouting, and player development. A sports team or league may, for example, use AI to analyse player performance data, identify potential prospects, or optimise ticket pricing and inventory management.
AI created visuals by Paul Parsons and Chris Branch have been widely shared on big soccer outlets, like 433 with over 58M followers.
We expect sports brands, clubs, and companies to experiment with AI and new AI tools to improve their operations and enhance the fan experience. As AI technology advances, its potential application in the sports industry is likely to broaden and develop.
Antler mapped out the latest 200+ generative AI platforms, which have raised 3.5+ billion dollars in just a few years. Read the Gen-AI landscape, featuring the first comprehensive market map by Ollie Forsyth here. With a bit of luck, we will see some of them also breaking into the sports industry and more creative AI designs.
Non-fungible tokens (NFTs) saw a rocky 2022, and not only in sports. Let’s have a look at the November Niftysports stats of the top leagues’ NFT platforms, a newsletter by Benjamin Penkert.
The stats for NFTs are red all over and are not painting the rosiest of pictures of the current NFT sports market. We have seen multiple crypto-sponsorship deals collapsing or being renegotiated over the last couple of months; now, this not-so-significant trend has reached NFT contracts as well. And the seemingly fell-through Premier League and ConSys deal is relatively large. However, Sorare, still equipped with a decent war chest and sales numbers providing a degree of hope, might get this lucrative deal at a bargain price compared to the numbers we’ve already seen in the past. When the agreement between ConsenSys and the Premier League was first floated back in March, potential figures ranged to £400 million over four years.
The trading platform and fantasy soccer game Sorare allow players to buy, sell, and trade virtual player cards using NFTs. Each player card is a unique digital asset representing a real-life soccer player to be used in the game to build fantasy teams and compete against others. In addition to Sorare, there are several other examples of companies using NFTs in the sports industry, including FANZONE. FANZONE is a collect-to-earn platform, enabling fans to buy, sell, trade NFTs and get benefits, rewards, and access to experiences of their favourite teams and players.
As the use of NFTs in the sports industry continues to grow, we expect to see more sports clubs and leagues consider creating and offering their own NFTs rather than partnering with platforms like FANZONE or Sorare. This would allow them to have more control over the development and distribution of their NFTs and potentially generate additional revenue streams. They will need to invest in their structures, strategies and experts. The more convenient way for most of them will be to partner with one of the NFT players and sell licenses.
At the same time, it is also likely that some sports clubs and leagues will continue to partner with established NFT marketplaces and platforms like OpenSea, Binance or Coinbase, which have the infrastructure and expertise to support the creation and distribution of NFTs at a larger scale.
But NFTs are used for various purposes, not only trading collectibles. For example, sports clubs and leagues may use NFTs to create virtual fan experiences or to sell merchandise, tickets, and other products more securely and transparently.
The use of NFTs in the sports industry will continue to evolve and expand in the coming years as more organisations look to leverage this technology to create new and innovative fan experiences.
However, in 2023 we can expect to hear the wording of NFTs less often in fan communication and, instead, hear more of the changed digital collectibles so that that mass adaptation can be generated. OneFootball made a substantial bet on digital collectibles and launched aera, its marketplace for digital moments like Serie A goals. An establishment during challenging times in the NFT space, the crypto winter, and the overall economic crisis, where fans don’t spend so much money on new things– I am curious to see how they will master 2023 and if they really will find a market to sell digital collectibles of video content or if they must adapt their strategy to the changing market reactions.
A trend for 2023, besides the trading and collecting utility, will be to use the technology behind NFTs and build meaningful utilities with tangible IRL benefits for fans. An example where the sports industry may still learn is the promising execution of the web3 loyalty program and NFT community by Starbucks. Long story short: with the right strategy and community-driven activation, NFTs are here to stay, especially in 2023.
One of my adored buzzwords of the year. In 2023, we can expect to see the adoption of web3 technologies, such as blockchain and decentralised applications, continue to grow in the sports industry. This trend is likely to manifest through sponsorship partners of clubs and associations to introduce and onboard consumers to web3 technologies. Many sports leagues and teams have large, engaged fan bases that are prime targets for web3 onboarding efforts. Sponsorships provide a natural platform for introducing these technologies to a broad audience. In 2022 we saw many activities in web3 sports: from Major League Soccer becoming the first professional sports organisation to sign a Bored Ape, to a contract to sports organisations selling their rights to web3/NFT marketplaces. As web3 technologies become more mainstream, we can also expect mass adoption of these technologies in the sports industry. From ticketing and merchandising to player contracts and scouting, the potential applications for web3 technologies in sports are numerous and varied. As sports leagues and teams increasingly embrace web3, we can expect to see a wide range of innovative solutions and use cases emerge.
One of my favourite web3 fan experience examples in sports is The Football Company by Ante Kristo. TFC is a blockchain-based virtual community game. It is an officially licensed daily fantasy sports product that enhances the experiences through user-representing avatars in the digital world. It connects real-life football fandom and fantasy gaming by managing football teams every game week. They have successfully built a community of football fans who love the game and love to play digital games.
My TFC avatar in Wolfsburg still wears a pretty plain attire but is rare and unique, thanks to its Term Sheet scarf.
Everything is on chain, but they don’t push this too hard in their communication– they have let the fan experience it in their own unique ways. And that’s going to be a trend for 2023, building web3 experiences where fans don’t even know that they are on chain because, truthfully, most of them don’t even give two hoots about what technologies the experience is built on and only focus on the experience itself, and its benefits. Here is a list of football NFT and Web3 projects curated by OneFootball earlier this May. However, it’s time for an updated one as new players enter the market almost every week.
Web3 will be the most significant trend for 2023, from sports industry strategies to exciting partnerships and executions.
Goldman Sachs forecasted the metaverse to be a potential 8 trillion-dollar industry. With the constant evolution of the sports industry, the two sectors make the perfect concoction for continued innovation for years to come.
We can expect more organisations begin defining their metaverse / web3 strategies. If we trust all the metaverse predictions, it looks like it might have the potential to revolutionise the way we experience and interact with sports. Sports leagues and teams have to consider leveraging this trend to create engaging and immersive experiences for their fans. On the one hand, they will partner with the big players like Yuga Labs, Meta, Decentraland or Sandbox or start designing and building their own experiences and ecosystems.
In line with this trend, we can expect to see the emergence of metaverse campaigns in the sports industry as teams and leagues seek to build brand awareness and engagement in virtual environments. These campaigns may include virtual events, experiential marketing initiatives, and other interactive experiences that allow fans to engage with their favourite teams and players in a virtual setting, from basic things like wearing your favourite official licensed team’s jersey in a virtual business meeting in MS teams or Zoom to more gamification metaverse experiences in other digital worlds.
In addition to consumer-facing applications, we can also expect to see the use of blockchain and other web3 technologies in business-to-business (B2B) contexts in the sports industry. Teams and leagues may use blockchain to streamline and automate supply chain processes or to facilitate secure and transparent transactions between teams and other partners.
Blockchain technologies have enormous potential to change the ways in which we interact with sports today but will have to be appropriately applied to be effective. While there are some precise applications for blockchain technology in sports right now, several challenges must be addressed before these can be fully adopted. These include the need for increased education on these technologies and significant technological challenges in developing products that operate effectively across different jurisdictions. It’s currently hard to predict how quickly these challenges will be overcome, but one thing is sure — the benefits of these new technologies far outweigh any potential pitfalls.
I recently wrote an article on how blockchain technology could transform the world of sports — check it out here. I am convinced that blockchain has the potential to completely revolutionise the sports industry and drive some ground-breaking innovations in 2023.
As the line between the physical and digital worlds continues to blur, we can also expect to see the rise of phygital (physical-digital) merchandising in the sports industry. This trend is likely driven by the increasing popularity of mixed-reality entertainment, combining virtual and physical reality elements.
As a result, fans may be able to purchase physical merchandise that unlocks digital experiences and content, or vice versa. One of my favourite examples is RTFKT with their benchmark activations in 2022 incl. the phygital hoodie and the cooperation with RIMOWA.
Encompassing a new collection of NFTs, limited-edition luggage and a robot collectible, the new collaboration brings to life — and the Metaverse — the ultimate experience for RIMOWA enthusiasts and Web3 collectors. Combining their respective craftsmanship, RTFKT and RIMOWA have come together to create an RTFKT x RIMOWA RIMOWA limited edition Original Cabin Luggage, of which only 888 pieces were produced. Of course, they all sold out instantly. Price 3k USD per piece. 2.66M USD earnings.
Limited supply, high-end content creation and entirely community-driven. This will surely be the next big thing in sports merchandising, combining the worlds to create new additional experiences with classical merchandising goods.
The rise of mixed, virtual, and augmented reality sports experiences is another trend to watch in 2023. As technology advances, we expect more sports leagues and teams to leverage MR, VR and AR to enhance the fan experience. For example, fans can experience immersive pre-game mixed-reality entertainment on their streaming devices in stadiums and at home. The Famous Group have been a benchmark this year for mixed reality entertainment, such as was the case with Carolina Panthers, Nickelodeon or Gillette activation.
In my opinion, one of the highlights of 2022 and a trend to watch in the new year.
Finally, we can expect new streaming experiences to emerge in the sports industry. As sports leagues and teams seek to reach wider audiences and engage with fans in new ways, we can expect to see innovative technologies, such as 5G and streaming platforms, to deliver fans high-quality, immersive viewing experiences. Whether through virtual reality streaming or interactive, personalised viewing experiences, the future of sports streaming looks bright.
A freshly announced streaming experience is quite promising: the Nike x Netflix fitness collaboration. Before the new year, Netflix members can already stream fitness content from Nike Training Club for the first time.
The fight between the big streaming players will evolve in 2023, and I think some of them might, as mentioned above, win the battle with investments in mixed reality entertainment, bringing new ways to give back to the audience. For example, with earn-to-watch business models or innovative activation ideas.
As the use of cryptocurrencies and decentralised finance (DeFi) continues to grow, we will likely see more and more sports clubs and stadiums begin to accept these forms of payment for merchandise, tickets, and other goods and services.
The adoption in sports clubs and stadiums of cryptocurrencies and DeFi could offer several benefits, including increased security and transparency, faster transaction speeds, and reduced transaction fees. It could also make it easier for fans to purchase tickets and merchandise, as traditional payment processes such as credit cards or bank transfers are avoided.
Some sports clubs and stadiums may choose to accept a specific cryptocurrency, such as Bitcoin. In contrast, others may use a DeFi platform that allows multiple cryptocurrencies. In either case, adopting these technologies by sports clubs and stadiums could represent a significant shift in how these organisations do business and interact with their enthusiasts.
In April 2021, the NBA’s Sacramento Kings became the first major sports franchise to offer a Bitcoin payment option to all players and staff. In addition, it was one of the first major sports teams to accept BTC payments in 2014.
Crypto Snack, a cryptocurrency payment solutions provider, announced in November 2022 the start of its first phase to enable La Liga’s RCD Espanyol de Barcelona to become the world’s first football club to integrate crypto payments fully. RCD Espanyol will accept over 30 cryptocurrencies, including the SNACK token, for various online and offline payments. Fans can purchase team merchandise, tickets and experiences for matches. Crypto Snack and RCDE will work on further actions to improve the technology’s adoption, such as installing crypto-enabled ATMs in the team’s stadium.
As the use of cryptocurrencies and DeFi continues to grow, we can expect to see an increasing number of sports clubs and stadiums embrace these technologies and begin to accept them as payment forms.
Environmental, social, and governance (ESG) concerns are becoming a mainstream focus for sports clubs, leagues, and other organisations in the sports industry. ESG refers to the three dimensions of corporate responsibility, often used to evaluate an organisation’s sustainability and ethical impact.
In the sports industry, ESG issues includes the impact of sports facilities on the environment, the treatment of athletes and other employees, and the transparency and accountability of organisations. As consumer and investor interest in ESG issues increases, we expect to see more sports clubs and leagues prioritise these issues and take steps to address them.
For example, sports clubs and leagues may adopt sustainability initiatives to reduce their environmental impact, such as using renewable energy sources or implementing waste reduction programs. One benchmark case is the partnership between TSG Hoffenheim and PreZero by Rapid Peaks.
As partners, TSG Hoffenheim and PreZero are looking to combine their strengths and live up to football’s role model function. The joint mission: go beyond mere talk about sustainability, and go into real action-taking. By questioning the status quo, being open to new ideas and constantly learning, they are gradually approaching the goal of making the PreZero Arena the very first certified zero-waste arena in Germany.
Another great example in 2022 was FC Reading making a Climate Change statement with an eye-catching new home kit that featured stripes showing how temperatures rise over time. A great example of using sports to raise awareness about global environmental problems such as climate change.
In addition to sustainability, social issues will continue in the foreground of 2023. The pressure on associations and clubs will increase, and so will the need for transparency. FIFA has been able to draw the media’s attention to the sport through Argentina’s win and, above all, thanks to Messi’s high sympathy ratings. Otherwise, this World Cup will be remembered mainly for the non-transparent decision to award the World Cup to Qatar, the various accusations about the working conditions on site and discussions about human rights.
Integrating ESG considerations into sports clubs’ and leagues’ operations and decision-making processes is likely to become increasingly important in the coming years. By prioritising these issues, sports organisations can demonstrate their commitment to sustainability, and ethical practices will enhance their reputation and appeal to consumers and investors.
In recent years, we have seen an increase in the use of 3D immersive content, particularly in large urban hubs such as London and New York.
Example Piccadilly Circus 3D billboard takeover of Meta Quest by Woodblock.
Another example was the launch of Barcelona’s first NFT campaign by BCN Visuals.
This trend is likely to continue in upcoming years, as sports clubs and leagues look for new and innovative ways to engage with fans and create memorable experiences.
3D-immersive content will grow in sports as clubs and leagues seek to create more engaging and immersive experiences for fans.
The COVID-19 pandemic and the resulting economic crisis have heavily impacted the sports industry. As a result, many sports clubs and athletes are looking for new financial models to help them navigate these challenging times. One trend likely to emerge in the coming years is an increased use of alternative financing options, such as crowdfunding and venture capital. Sports clubs and athletes may turn to these options to raise money and fund their operations, especially if traditional sources of financing, such as sponsorships and ticket sales, are scarce. Hence, tokenised crowdfunding and VC financial models for clubs and athletes will be a trend.
One instance of a club reassessing its financial model was Venezia FC. Venezia FC president Duncan Niederauer was offering supporters and other investors the chance to invest in the Venezia FC Bond. As the Club moves into a new phase more focused on the long-term, the Ownership invited Venezia FC’s supporters, its local and global community, and all investors, to invest in the Venezia FC Bond, alongside the Club.
Funds raised from the Venezia FC Bond will directly finance the construction of the new training centre at Taliercio, including additional training pitches, locker rooms, a gym, medical and rehabilitation facilities, and the new Club headquarters.
The result? Applications were made for over 5 million euros by retail and institutional investors located in more than 33 countries worldwide, in as little as three weeks. The capital raised from the bond will fund the development of the club’s new training ground. Investors will earn 7.5% interest annually and be paid a one-off 15% bonus if the club is promoted to Serie A during the lifetime of the five-year bond.
The startup FANtium is another example of an alternative financial model. FANtium is a platform where fans can invest in athletes they believe in. FANtium promises on its website that athletes can build a stable financial foundation by tokenising part of their expected prize money with their service. This allows them to concentrate fully on what is important: their sport. The first campaign is currently running, with investments open for the tennis player Dominic Thiem.
As the sports industry grapples with the impacts of the economic downturn, we can anticipate seeing more and more clubs and athletes looking for alternative financial models and arrangements to help them navigate these challenging times.
2023 is setting out to be an exciting year for sports business and tech, with several trends emerging and shaping the industry. Whether it’s the continued growth of Web3, NFTs and blockchain technologies, the rise of mixed, virtual, and augmented reality sports experiences, or the ways to expand the fan experience through new technologies, there is no doubt that sports will continue to evolve and change in new and exciting ways.
I recently founded Later Labs, a Venture Studio committed to changing the future of sports, dedicated to helping companies and rights holders in the sports industry solve challenges and create an impactful future in and through sports. Be it innovative technology, developing new business models or creating exciting new products and services, our commitment is to empower our partners to succeed and thrive in the sports world… I am passionately committed to leveraging my knowledge and experience to help startups, companies and organisations in the sports industry to innovate and grow.
Together, in 2023, we can create a bright and exciting future for sports.
The focus for 2023 will be to create new fan experiences, explore new ways to build business models, think about the innovation mindset on exploring new technologies, find exciting new partnerships and collaborations and keep innovating the game.
What trends are you most excited to see in the sports industry in 2023? Share your thoughts in the comments below and let’s start the conversation!
Can’t wait to see what 2023 brings. LFG!
Happy New Year to you all!
Yours,
Nenad Miljkovic
About the author:
Nenad Miljkovic is the Founder of the Venture Studio Later Labs and Co-Founder of the Sports Agency Rapid Peaks. After 15 years as an entrepreneur in the sports industry, Nenad had the privilege of working with some of the world’s most prestigious talents, clubs, sponsors and associations. His passion is identifying visionary approaches, always aiming for value and maximum impact. His purpose-driven mindset is always searching for new, sustainable innovations.
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