Simon Cummins, partner and head of the global sports, gaming, and media practice at executive search firm Odgers Berndtson, discusses three C-suite sports business trends he expects to play out next year.
The pandemic has changed the game for many sectors, but none more so than sport. A shifting media landscape has upended the way fans engage with both broadcasters and rights-holders. The entire spectrum of stakeholders – from investors to consumers – now expect sports organisations to play a key role in multiple societal issues. And internal and external forces are reshaping commercial models, forcing organisations to balance the increasing need for fan-level marketing with capturing value from commercial partners.
This evolving arena is having a profound impact on sports businesses, particularly at the top of organisations. 2020 and 2021 kick-started significant changes for a number of key C-suite positions – next year we expect these changes to play out in full. Below are three c-suite trends to watch in 2022.
Evolution of the Chief Commercial Officer
Across sports businesses the Chief Commercial Officer has enjoyed a growing remit. Historically, a sports CCO’s responsibilities spanned the big-ticket revenue generating items such as broadcast, media, sponsorships, and naming rights. But the scope of this role has expanded and now also includes marketing, communications, ticketing, venue operations, merchandising, food and beverage, non-match revenues, and more recently, the all-encompassing digital revenues.
However, more and more boards feel that such a broad remit is ineffective for today’s increasingly complex global sports and media landscape. Content owners are trying new distributing models, such as revenue sharing and OTT. Private equity is acquiring and bundling media rights. Subscription content is on the rise with fans wanting to pay only for what they watch. And there’s a burgeoning trend in territory-specific product marketing and addressable TV. On top of this, sports organisations are increasingly looking at alternative partnership deals, instead of the traditional auction-based, licensing model.
It means that in sport, not only has the scope of the commercial landscape grown, but so has its complexity. As a result, boards have begun to break up the CCO role into individual C-level positions. The most common of these are the Chief Media Officer, Chief Marketing Officer, Chief Sponsorship Officer and now Chief Digital/Data & Strategy Officer. While this trend emerged in 2021, we expect an increasing number of boards to take this approach in 2022 and beyond.
We also expect the benefits to be two-fold. Firstly, commercial leaders will be able to focus on their area of specialism, rather than attempting to be a jack-of-all-trades. And secondly, it will give more candidates just below the C-level the opportunity to step up and be part of a senior leadership team. This may also mean the number of direct reports for the CEO and COO will grow.
Increasing priority given to ESG by the C-suite
Sports organisations face a triple challenge from Environmental, Social, and (Corporate) Governance (ESG). Over the past 18 months sport’s role in societal issues has intensified, with both athletes and fans taking very public stances on everything from racism to socioeconomic inequalities. More recently, the focus has also turned to governance as a result of athletes’ mental health being thrown into the spotlight. And sport is not immune from the environmental crisis. Fans, particularly Gen Z, expect a commitment to sustainability from the brands they support. Because of this, stakeholders, commercial partners, and funders are now demanding transparency and commitment from sports organisations to environmental, social, and governance issues. What’s more, both rights-holders and brands now recognise that commitments in these areas are the key to building trust with fans and athletes.
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As a result, ESG will become a key focus for sports boards and leadership teams in 2022, with greater potential for Chief Sustainability Officers and other ESG-related senior roles. The benefits will again be multifaceted. Firstly, it enables a sports business to make real strides in the areas of ESG. Secondly, it sends a message to fans that an organisation is committed to ESG. And thirdly, it makes sports businesses more attractive to sponsors looking to associate their brand image with a sports entity.
Increasing demand for performance marketing executives
Like the role of the Chief Commercial Officer, the role of performance marketing has become exponentially more complex. Marketing has now evolved from a 30-second ad spot to requiring a deep understanding of fan culture, the influencer community, converting consumers to subscribers, virtual products, and the new world of fan token cryptocurrencies.
In addition to all of this, the direct-to-consumer landscape has exploded over the past 18 months, driving growth in subscription video-on-demand, digital sponsorship, and virtual events. What’s more, having a quantifiable value proposition and audience engagement metrics is becoming an intrinsic part of securing partnerships, adding another layer of knowledge that a sports marketeer needs to have in their wheelhouse.
Towards the end of 2020 and into 2021, performance marketeers became critical players in many sports businesses. Their importance, combined with the continuously evolving digital marketing landscape will drive up demand for this role in 2022, and is likely to see it become cemented as a key C-level position. This will create opportunities for talented performance marketeers within sports and adjacent industries such as e-commerce and media.