Below is a complimentary Demography Unplugged research note written on 12/10/20 by Hedgeye Demography analyst Neil Howe. Click here to learn more and subscribe.
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With avid fandom declining among teens and young adults, the pro sports world is redoubling its efforts to hook the next generation. Execs are hoping that sports betting will do the trick, along with more short-form videos and behind-the-scenes looks at the players. (The Washington Post) |
NH: We have often written that younger generations are less likely to identify as sports fans. (See “Youth Reject Traditional Pro Sports.”) Now, owners and execs of major teams are panicked that they are about to lose an entire generation of sports consumers. And they are scrambling for new strategies to bring in younger audiences.
One solution has been to make sports media more bite-sized. Today’s youth are accustomed to watching six-second TikTok videos, not two-hour-long games. The NBA has had success with focusing on short-form highlights through their social media accounts. NBA videos have been viewed over 13 billion times on social media.
A report by Two Circles, a sports marketing firm, estimates that in sports media the value of the live rights to short-form videos will increase by 101% by 2024. The value of live broadcasts, on the other hand, will increase by only 18.7%. Of course, short-form videos are starting from a smaller base. Two Circles estimates that in 2024 live broadcasts will still be worth $49.1b, compared to short-form videos being worth $3.2b.
A more promising and lucrative strategy to entice young people may be fantasy sports and betting. Young adults are the biggest players of fantasy sports. Of the 49.5m US players, 50% are ages 18-34. Young adults are also eager to bet on these games. A Morning Consult poll from 2018 found that those ages 18-34 were the most likely (34%) to say they would take up sports betting if legalized in their state.
While any kind of betting may seem unattractive to a generation that eschews risk, Millennials don’t view sports betting as risky. They believe that, armed with the right statistics and analytics, sports betting is no mere random spin of the roulette wheel. It is a skill. To judge anecdotally by publications, a surprising number of Millennials have become avid hobbyists in training AI algorithms to outguess the sports-betting bookies. (IBM's Watson recently touted an NLP "trade assistant" for fantasy fans.)
Most of the major sports leagues have created fantasy partnerships with daily betting companies. The hope is that, as young adults bet, they will start watching the games to track their results. DraftKings (DKNG), which went public in April, has seen its stock rise over 30% in the last three months.
If fantasy sports becoming an ever-bigger draw, it will of course change the nature of sports fandom. Since fantasy teams are made up of players from all different franchises, people are watching for specific players not specific teams. And if every play is available in searchable short clips, why would anyone care any more about watching an entire game?
This would be a catastrophe for the traditional allure of big-league professional sports, which is so deeply rooted in team and community loyalty. (See "Emerging Generation of Fluid Fans.") You might see older fans hasten their rush for the exits... and a growing share of younger fans no longer even bother to learn the final score.
A larger focus on gambling also runs the risk of corrupting the game. Today's baseball and football pros are already kept well-informed, via social media, about how fans are betting on them and why. Studies have shown that gambling creates the most corruption in sports where players are paid very little and thus have more incentive to accept a bribe. In the US, the biggest immediate concern is collegiate sports, where players make nothing.
So while betting may get more people watching March Madness, you also risk touching off the next "Black Sox" scandal, eroding the sport’s image as well as its integrity. And once a sport is regarded as rigged, it won't draw many people of any age--either to watch it or to bet on it.
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ABOUT NEIL HOWE
Neil Howe is a renowned authority on generations and social change in America. An acclaimed bestselling author and speaker, he is the nation's leading thinker on today's generations—who they are, what motivates them, and how they will shape America's future.
A historian, economist, and demographer, Howe is also a recognized authority on global aging, long-term fiscal policy, and migration. He is a senior associate to the Center for Strategic and International Studies (CSIS) in Washington, D.C., where he helps direct the CSIS Global Aging Initiative.
Howe has written over a dozen books on generations, demographic change, and fiscal policy, many of them with William Strauss. Howe and Strauss' first book, Generations is a history of America told as a sequence of generational biographies. Vice President Al Gore called it "the most stimulating book on American history that I have ever read" and sent a copy to every member of Congress. Newt Gingrich called it "an intellectual tour de force." Of their book, The Fourth Turning, The Boston Globe wrote, "If Howe and Strauss are right, they will take their place among the great American prophets."
Howe and Strauss originally coined the term "Millennial Generation" in 1991, and wrote the pioneering book on this generation, Millennials Rising. His work has been featured frequently in the media, including USA Today, CNN, the New York Times, and CBS' 60 Minutes.
Previously, with Peter G. Peterson, Howe co-authored On Borrowed Time, a pioneering call for budgetary reform and The Graying of the Great Powers with Richard Jackson.
Howe received his B.A. at U.C. Berkeley and later earned graduate degrees in economics and history from Yale University.
