From Top Shot to Vaccine Shots, All Signs Are Pointing Up
It has been hard for anyone in the business of sports to avoid talk of blockchain technology, cryptocurrency and non-fungible tokens (NFTs) recently, mostly attributable to the eye-popping figures attached to NBA Top Shot moments, but also extending to other products—including Bleacher Report’s introduction of collectible digital basketball art in time for last weekend’s NBA All-Star Game.
But while Top Shot’s success grabbed the most headlines and social media chatter, it was just one of a series of news items in the last two weeks that demonstrate the economic power of sport, which is predicated entirely on the passion and loyalty of fans. Consider:
· Sports-focused streaming service FuboTV reported its 2020 revenue grew 83 percent over 2019 to $269 million, driven by a 73 percent increase in subscriptions, which the company says outpaced traditional TV services. Most of Fubo’s growth came in the second half of the year as sports events returned to the calendar.
· The JohnWallStreet Sports Stock Index outpaced the broad stock market for the fourth month in a row, rising 9.1 percent in February, demonstrating that investors remain bullish on the sports industry’s overall health and prospects.
· Reports leaked that Saudi Arabia has been in talks with Real Madrid about a $182 million partnership intended to promote Qiddiya, a $7.9 billion development project intended to become Saudi Arabia’s “capital of sports and entertainment.” News of the sponsorship served to underline the fact that Saudi Arabia’s leadership sees sports as a cornerstone of its 2030 Plan, which aims to diversify the revenue of the world’s second-biggest oil producer as global concern over climate change threatens its primary source of income.
· And back to crypto tokens, Malta-based Chiliz announced it was investing $50 million to expand to the U.S. The company, which describes itself as “the world's leading blockchain fintech provider for sports & entertainment,” is doing a booming business issuing fan tokens for major European soccer clubs. Fans purchase the digital tokens to access exclusive benefits such as content, promotions and voting in polls. (AC Milan launched its token program late last month, generating $6 million in revenue in the first day.)
For anyone in the business of live events, where good news has been in short supply for the past year, the above examples are a reminder of the solid foundation that the sports industry is built on. More importantly, they are each strong indicators of the interest of fans in their favorite sports, teams and athletes—the same interest that will compel their return to arenas and stadiums as conditions and regulations allow.
Research shows that the desire to attend live events is rebounding quickly as COVID numbers turn in the right direction. An ongoing study by Momentum Worldwide showed that by as early as December nearly six in 10 Americans were ready to attend a sporting event with necessary precautions taken.
As the COVID vaccine rollout accelerates with the introduction of Johnson & Johnson’s one-dose shot, the number of fans ready to watch their favorite teams live has undoubtedly increased.
And if a further positive sign is needed, perhaps the most promising news item of all came last week from the other powerhouse of live events—music. Immediately following the U.K. government’s go-ahead for large-scale festivals with no audience limits beginning in June, Live Nation sold 170,000 tickets to two major festivals in just three days.
According to Live Nation president, Russell Wallach, “not only are 95 percent of fans likely to attend a show when restrictions are lifted, 76 percent plan on ‘making up for lost time’ when live music events resume.”