SPORTS HAS A GEN Z PROBLEM
Young fans digest content differently and leagues need to adjust, Rick Maese writes.
On any given night, in living rooms across North America, the television could be tuned to the big game, mom and dad glued to the action, children nearby. But as most any parent can attest, those children are likely to be virtually somewhere else — an app, a game, a social media feed, perhaps, lost in a smartphone where the scrolling never ends.
The big game serves as background noise, if that.
The bulky and bankable North American sports industry, built on towers of cash and lucrative American television contracts, is confronting a Generation Z problem. The nation's youngest cohort is fundamentally different from the generations that preceded it. Having grown up with smartphones in their pockets, its members eschew traditional television viewing and subscribe to digital habits that make grooming a new generation of sports fans a challenge.
That challenge is being met with a sense of urgency in some corners of the sports world and a sense of alarm in others, according to interviews with team and league officials, social scientists, research analysts and marketing specialists who focus on Generation Z.
Failing to hook young people might not devastate today's bottom line, but it threatens to muddle the future of every league, every team and every sport.
“If you lose a generation, it destroys value and the connective tissue,” said Ted Leonsis, principal owner of Washington-based teams that compete in the NBA, WNBA and NHL. “It's what some of the big sports leagues are nervous about. Could we lose a generation because we didn't give them access and the products and services they want?”
While many have embraced digital platforms, leagues and teams were slow to tailor their offerings to the youngest generation, even as research made clear that Gen Z members — loosely defined as those born after 1996 — interact with the world much differently than millennials, Gen Xers and baby boomers.
And these habits have taken a toll on the way they engage in sports, research shows.
According to ESPN'S internal data, some 96 per cent of 12- to 17-year-olds still identify as sports fans, a consistent figure during the past decade. But the share of fans who call themselves “avid” has been dropping, from 42 per cent a decade ago to 34 per cent last year.
Rich Luker is a social psychologist and founder of Luker on Trends, a sports polling outfit that has been measuring fandom and consulting with pro leagues for more than a quarter-century. He has been watching fandom drop among young people for the past decade and sounding alarms.
“I've been screaming for 15 years now,” he said. “I would get pushback. Owners, executives, senior-level people say, `They will come back at 35.' Why would they come back at 35 when they were never there in the first place? That's like saying all of a sudden they'll all start knitting at 35 or watching cricket at 35. Why would they do that?”
Tim Ellis, the NFL'S chief marketing officer, says the league's own data bears that out.
“There's no strategy for bringing in a 35-year-old fan for the first time. You have to make them a fan by the time they're 18, or you'll lose them forever,” he said.
That's why the NFL has been so worried in recent years. When Ellis joined the league two years ago from Activision Blizzard, the popular video game maker, the league had seen its young audience trending down for six straight years. He stressed to team owners that finding a solution was urgent.
“Gaining and retaining young people is key to future-proofing the NFL,” he said in a recent interview. “So when we look at that generation, I personally look at it as the lifeblood and health of the brand and our business.”
The issue has only been exacerbated by the pandemic, as youth sports suffer and young people spend more time online.
Sports executives “haven't paid enough attention yet to this generation, and they have to,” said Mark Beal, an assistant professor at the Rutgers University School of Communication and Information who has written two books on Gen Z. “They need to prioritize them because these are the sports fans of the future that over the next 10 to 15 years can make or break a sports team, league or manufacturer. This is your most important consumer, and they'll determine your future success.”
Last month, Beal gave an online presentation to executives from Major League Baseball and its 30 teams. To explain how this younger audience is growing up innately different, he borrowed a quote from Jacqueline Parkes, chief marketing officer for MTV: “This is a generation that grew up swiping before they wiped.”
Over the course of 60 Powerpoint slides, Beal painted a stark portrait of how technology shapes the way Gen Zers navigate the world. They're globally conscious and care about diversity, equality and inclusion. They get their news from Instagram and Youtube, not a newspaper or cable news network. And they want unique, authentic experiences — even better if it's something they can then share on their social networks.
They do enjoy sports, Beal says, though other, digitally friendly pastimes compete for their attention.
He surveys Gen Zers a handful of times each year and finds that sports consistently rank behind entertainment (music, movies and TV) and pop culture (celebrity news and trends).
This was not all new information to the Zoom-assembled baseball executives. Officials from MLB, the NBA, the NFL and the NHL all say they've been diligently studying Generation Z. They have ramped up their efforts to connect, they say, and are pleased with early returns.
But many acknowledge this is a tenuous time. Leagues' research shows a strong correlation between young people playing a sport and developing fan loyalty. But youth sports participation has steadily slipped in recent years. There were promising signs more recently — and then the pandemic struck. One emerging fear, though it's probably too early to quantify, is that the hit to youth sports will do permanent damage, with young people gravitating in other directions or getting further engrossed in their digital worlds.
There are other defining Gen Z characteristics that encourage sports executives. Members are highly engaged, devour content and crave connection.
“The draw for sports historically has been this idea of connecting with others and creating interactions and connection points, whether at the ballpark or the water cooler at the office,” said Chris Marinak, MLB'S chief operations and strategy officer. “We see the younger generation has that same desire, probably even more so in terms of connecting with friends.”
These complicated consumption habits have forced teams and leagues to throw out their time-honoured blueprints and find new ways to welcome Gen Z into the tent. Young fans might not sit through nightly 2½-hour (or longer) televised games, but they're receptive to shorter videos on platforms such as Youtube, Tiktok, Instagram and Snapchat.
“The challenge isn't about finding Gen Z,” said Kate Jhaveri, the NBA'S chief marketing officer. “It's about attracting and keeping their attention.”
The NBA has been ahead of the curve. Forty per cent of the league's core fan base is under 35, and the league is finding success engaging young fans online, where it has 148 million followers across the major social media platforms — more than the other U.S. leagues combined. It has seen 43 per cent growth in social media views in three years.
While last month's NBA Finals attracted disastrous TV viewership, the league insists that different metrics are needed to measure modern fandom. Many fans, especially the youngest set, were still consuming content online, the league says. For the year, the NBA'S videos have been viewed 13.2 billion times on social media, again more than those of the other major leagues combined.
Those views might plant seeds for future loyalty, but they don't offer the same revenue flow that comes from traditional means.
An analysis by the sports marketing agency Two Circles suggests that value of short-form video rates will increase more than 100 per cent in the next four years, compared with 18.7 per cent growth for live rights. But the overall value of live rights will still be at $49.1 billion in 2024, dwarfing the $3.2 billion valuation of short-form videos.
For now, executives say, hooking new fans is the key.
“The traditional sense of being a fan — either buying tickets and going to the game or watching every game on television — those are still very important,” said Heidi Browning, the NHL'S chief marketing officer. “However, you can also be a fan and consume everything digitally — highlights, stories about your favourite athletes. You can buy jerseys; you can play video games. You're a fan, too, but your way of interacting with the sport is different than what we've traditionally thought of as fandom.”
The major U.S. sports leagues have become aggressive in both gaming and gambling. They have struck partnerships with betting operators and daily fantasy services and have become active in esports. The NBA runs its own video game league, and the NHL hosted a global esports tournament this year. All of the major leagues are also on Twitch, a streaming service for gamers.
One key for all the leagues has been aligning their interests with those of young fans — fashion and music, for example. Another big area: social issues. Some leagues have embraced “cause marketing,” tackling social issues that range from voting to mental health to social justice.
Marketing departments across sports are now filled with employees plucked from social media companies, video game producers, streaming services and other youth-oriented brands.
Browning came to the NHL four years ago from Pandora, the streaming music service.
She knew young consumers had developed different habits and expectations, but she also noticed they constantly evolve.
So the NHL launched a Gen Z focus group last season, a panel of 15 young people who met on Zoom and chatted on Slack. The league peppered them with questions, took notes and adjusted strategies.
Five years ago, online videos might have been overwhelmingly one-timers and stick saves. Now the mantra is “humans are greater than highlights.”
“They want to see our players in their real lives, see them with their wives, know what they eat or drink or are binging on Netflix,” Browning said.
The leagues all say they've made progress, even as sports-television viewership struggles amid the pandemic. But executives know that Gen Z is a puzzle that's constantly shifting.
“You can't ever think that you have it solved,” Ellis said. “It is just going to keep evolving.”
The challenge isn't about finding Gen Z. It's about attracting and keeping their attention.