Impact of Technology on Sporting Finance

The sporting industry has undergone a lot of changes in the recent past. These changes have been related to various aspects of the sporting industry. However, technology has been the driving factor behind most of these changes.

Technology has completely transformed the sporting industry and the impact of this transformation has also been felt in the financial aspects of the industry.

In this article, we will have a closer look at some of the ways in which technology has impacted the sporting industry.

  1. New Revenue Streams: It is important to realize that the revenue model of the sporting industry is undergoing a sea of change. The main revenue stream had earlier transitioned from ticket sales to television broadcast rights. Now, the transition has gone one step further and the main sources of revenue are derived from the sale of digital rights.

    Newer sources of revenue such as revenue from digital ad sales and fantasy gaming have come into the picture. Hence, the top line of every sporting franchise is being impacted by technology. It is essential for any sporting franchise to closely monitor the technological trends in order to stay abreast with the latest changes.

  2. New Ways of Engagement: The revenue earned by sporting clubs is a direct function of their engagement with the fans. Fans tend to prefer teams that perform well but also have a higher degree of connection with their supporters.

    Technology has made it possible to stay in touch with the fans using new and innovative ways. Fans are able to connect with their favorite sporting stars via multiple social media channels. They are able to stay in touch with the practice and fitness routine of these stars through social media as well as other channels. This helps create a feeling of connection and engagement. This connection and engagement are reflected in the brand value of the sporting franchise.

  3. Counterfeit Prevention: Sporting franchises derive a significant portion of their revenue by selling sporting memorabilia. Over the years, many counterfeit products have been circulated in the sporting community. This is leading to revenue loss for the sporting franchises as well as for the industry as a whole.

    The root cause of counterfeiting is the lack of a public record about the authenticity of the memorabilia. Blockchain technology provides the capability to maintain public records which can help determine the authenticity of memorabilia. Hence, blockchain technology is being used on a large scale to prevent counterfeiting and revenue leakages.

    Sports and Technology

  4. Injury Prevention and Management: The performance of certain players is vital to the performance of the team. This is also reflected in the financials of the team.

    When star players are performing well and the team is winning, the revenues tend to go up. However, in the past, there have been issues wherein the team management has over-exerted certain players which has caused injury to them. As a result, they have not been able to participate in the games for some time leading to revenue loss. However, this can be avoided with the advent of technology.

    Modern-day technology includes certain types of wearables and advanced scans which can help predict injuries before they occur with a high degree of accuracy. This technology is being widely used by sporting franchises in order to ensure that their revenues are not unexpectedly impacted by injury.

  5. Weather Prediction: There are certain types of sports that are played outdoors and which can be affected by unsuitable weather conditions such as rain and snow. Earlier there have been instances of sporting competitions being impacted due to weather because of the inability to predict weather conditions. However, this is no longer the case.

    Advanced technology is available that can help predict weather at a certain location. This technology can be used to ensure that the scheduling is done in such a way that the weather does not interrupt play.

  6. Player Selection: The evaluation of players who perform at a lower level in order to give them an opportunity to play at a higher level has also changed drastically because of the availability of technology.

    Now, there are various types of sensors available that collect data during practice sessions. This data is automatically fed into a system that analyses player performance and helps the talent scouts identify promising players.

    The end result is that the team can easily identify new talent and then greatly enhance their performance. This helps the team create better players at a lower cost which eventually helps the financials of the sporting franchise.

  7. Rise of E-Sports: Last but not least, the sporting industry has seen the growth of an unconventional partner in the e-sporting industry. Earlier, e-sports were restricted to video gaming conventions.

    However, now e-sports have become a major phenomenon with large-scale competitions. Also, since some of the intellectual property of sporting franchises is used by e-sports such as the name of the team, name of players, and player statistics, sporting franchises can derive some royalty revenue from e-sports.

    The increasing popularity of e-sports is leading to increased revenue for sporting franchises across the world.

Hence, it can be said that technology is impacting the performance of the team as well as the financial situation of the sporting franchise. Teams need to stay abreast of the latest changes in order to obtain a competitive advantage.


❮❮   Previous Next   ❯❯

Authorship/Referencing - About the Author(s)

Content Writing Team The article is Written and Reviewed by Management Study Guide Content Team. MSG Content Team comprises experienced Faculty Member, Professionals and Subject Matter Experts. We are a ISO 2001:2015 Certified Education Provider. To Know more, click on About Us. The use of this material is free for learning and education purpose. Please reference authorship of content used, including link(s) to ManagementStudyGuide.com and the content page url.


Sports Management