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     // . //  Insights //  Gen Z Will Reshape The Economics Of Professional Sports

    The sports world is heading toward a moment of truth with Generation Z.

    For the past several decades, the global sports-media complex has enjoyed nothing but rapid growth, fueled by new technology and production innovation. The global annual value of sports media rights was $55 billion in 2022 and is expected to surpass $60 billion next year, according to industry tracker Front Office Sports. Such revenue streams have sent individual franchise values soaring well into the billions of dollars.

    The central tenet of this wildly successful business model: people love sports content, and will pay ever-increasing sums of money to get it.

    But Gen Z’s relationship with sports content is changing — and that is raising concerns among leagues, rights owners and media organizations that this golden age might be drawing to a close.

    Simply put, Gen Z is less interested in sports than older generations. Only 18% of Gen Zers say they have attended a live sporting event in the past year, and 33% say they don’t watch live sports on TV, according to research from Morning Consult. This compares with 25% and 22%, respectively, for millennials. Franchise fandom is declining as well: 38% of Gen Zers say they don’t have a favorite sports team, compared with 25% for all US adults, according to Morning Consult.

    At the same time, Gen Zers are highly focused on diversity, equity and inclusion and strongly believe male and female athletes should receive equal rewards. That passion was on full display on August 30, when a University of Nebraska women’s volleyball game attracted 92,003 fans, a record for a female sporting event.

    So far, professional sports leagues and media haven’t kept up with these shifting preferences. But a roadmap is coming into focus that could help them reach Gen Zers over the long term. Here are some ways they are adjusting their strategies to try to attract this cohort — without alienating the older fans who remain the lifeblood of their businesses.

    Getting more sports coverage on social

    No shock here: Gen Zers head straight to social media for sports content and highlights, as well as to find community around favorite teams and athletes.

    What’s more surprising is the extent to which short-form video platforms are displacing live broadcasts on television: Only 40% of Gen Zers say they watch live sports on cable TV according to survey research from the Oliver Wyman Forum, the think tank of global management consultancy Oliver Wyman. That compares with 51% and 61%, respectively, for millennials and Gen X.

    For Gen Zers, bite-sized chunks are more appealing than long broadcasts. Social media content from athletes is the single largest driver of Gen Z sports engagement, with 63% of Gen Z saying content from their favorite athletes increases their engagement (versus 42% of non-Gen Zers), according to the Oliver Wyman Forum research.

    Professional leagues are starting to recognize the power of social media. The National Football League has hired more than 1,200 influencers on social platforms to promote league content and encourage fandom, while Major League Baseball launched a “creator class” of TikTok talent to spread the word about teams and players. This will only increase over time as leagues attempt to meet prospective fans where they are.

    Embracing esports ecosystem to attract Gen Z spectators

    Esports are one of the few sports realms where Gen Z is particularly engaged. The rise of an esports ecosystem with a global audience of more than 500 million people reflects interest among Gen Zers not only in watching professionals play their favorite videogames but also in connecting with massive communities of like-minded fans.

    Not long ago, pro leagues relied mainly on youth programs like the NFL’s Punt, Pass and Kick competitions to cultivate interest among young people. Now they are exploring the nexus of esports and traditional sports. The English Premier League has launched a league for the UK’s top FIFA gamers, and similar gaming teams accompany the National Basketball Association and National Hockey League 2K series. Other leagues have begun using esports to stoke brand awareness. MLB hosts “watch parties” on Twitch, while the NFL released special Fortnite “skins” so users can customize their avatars with NFL jerseys.

    Flirting with fantasy and gaming in sports

    The rise of gaming and fantasy sports is changing the media landscape. Among Gen Z audiences, this content is particularly resonant: 51% and 54% of Gen Zers said gaming and fantasy content, respectively, increased their sports engagement (versus 31% and 33% of non-Gen Z audiences), according to the Oliver Wyman Forum research.

    Sports media and pro leagues are also piling into sports betting. The problem: Gen Zers tend to have less money than older generations, and tend to be more purpose-driven with it, having experienced both the great recession and the pandemic at tender ages.

    So, it is a delicate balancing act between embracing gaming and fantasy and diving fully into betting. Pro leagues are evolving into influencer- and gaming-driven entertainment powerhouses, but they will have to exercise care as these trends coverage.

    Engaging Gen Z — a winning sports content strategy

    Gen Zers aren’t sports fanatics, but they are ravenous for content. Professional leagues and media organizations have the content, but must figure out how to interact with this media savvy generation in an authentic way while ensuring their product still appeals to older fans.

    This is no easy task — but it’s one that needs to start now.

    Lucia Uribe is co-lead of the Oliver Wyman Forum’s Gen Z research initiative and Tony Simpson is Oliver Wyman’s Sport Industry lead.

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