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Business Model Innovation in Sports

Business Model Innovation in Sports
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In layman’s terms, a business model is the sum of the parts comprising an organization's products or services. Establishing these models requires a combination of developing new offerings, finding untapped markets, and disrupting the organization by discovering different ways to market.

Looking at the most innovative sports business models brings to light how the rise of digital platforms and technologies transformed the fundamental behaviors, wants, and needs of people. Compared to past generations,humans consume content and communicate in a completely different way.

The change is encapsulated best by Nike CEO Mike Parker’s quote saying,“We used to sell you a pair of shoes and some advertising, now it's about building a relationship."

The Fan Engagement Model

Soccer teams like AS Roma and FC Barcelona, as well as the NBA’s Orlando Magic, use tools to gather customer data and insights. With the information, these teams craft a customized and personalized end-to-end customer experience, focusing their services on multiple touch points to cultivate enduring relationships with fans.

Teams employing this fan-first model have a knack for analytics-based innovation, thus equipping themselves to thrive during the digital age.

Product Innovation Model

Sports organizations, franchises, and leagues focused on product innovation, capture and analyze the data from consumer interactions for new digital product and service innovations.

One team known for the product innovation model is the San Francisco 49ers, whose Levi’s Stadium is the first stadium to work with SAP’s venue management platform. SAP’s connected stadium system has a history in Europe with FC Bayern Munich & Allianz Arena and TSG Hoffenheim.

Data from in-venue operations–including attendance, parking, food/beverage, retail, weather,ticketing, and social media–is tracked from a digital boardroom that’s powered by the SAP system. SAP's Leonardo, Cloud Platform, HANA Database, and Analytics Cloud aggregate these metrics.

Hampered by short seasons, NFL teams lack time to gather data, and the 49ers old methods of surveys left them with data too old to assist in mid-game corrections.

Now, with the help of SAP, the 49ers enjoy the immediacy and luxury of tools such as ‘Happy or Not’ buttons and real-time streaming data that prevents the parking lot filling up too early, for instance.

Digital Media Innovating Revenue Streams

Increasing a franchise or league’s online audience and social media presence increases sponsorship valuations and opportunities. Producing engaging content nurtures relationships with fans and carves out a memorable team narrative.

Altimeter's 2018 State of Digital Content Report revealed that, across all industries, 41% of organizations could tie revenue to content.

No more is this evident than in the Toronto Raptors’ success on social media with their #WeTheNorth campaign. Through a concerted social media effort, the teams’ marketers took the Raptor’s image as the overlooked Canadian underdogs of the NBA and turned it into a unifying force that grew the team’s fan base exponentially.

The results of the #WeTheNorth campaign are staggering to this day. After ticket purchasers were up 6.6% during the 2013-14 season, it increased to 68% the very next year.

What’s so innovative about the Raptor’s campaign is that they started a movement that turned the team from a local favorite into a national treasure.

Workflow Podcast

The WorkFlow podcast is hosted by Steve Glaveski with a mission to help you unlock your potential to do more great work in far less time, whether you're working as part of a team or flying solo, and to set you up for a richer life.

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To help you avoid stepping into these all too common pitfalls, we’ve reflected on our five years as an organization working on corporate innovation programs across the globe, and have prepared 100 DOs and DON’Ts.

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Unlock new opportunities and markets by taking your brand into the brave new world.

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Steve Glaveski

Steve Glaveski is the co-founder of Collective Campus, author of Time Rich, Employee to Entrepreneur and host of the Future Squared podcast. He’s a chronic autodidact, and he’s into everything from 80s metal and high-intensity workouts to attempting to surf and do standup comedy.

Ask me a question!