Beyond Boundaries is a recurring series, based on C2 Montréal’s 2020 theme, examining individuals and organizations that are breaking down barriers and embracing change in their industry.
If ever there was an industry that was ripe, practically begging, for disruption, it’s the change-resistant monolith that is the world of traditional professional sports. Long used to dictating the terms of engagement with fans — be it what gets shown on TV and when, what stories are told in print (or not) and how fans interact with a team and its players — pro sports leagues have faced a web-born reckoning in recent years. And perhaps a new and potentially upending challenger: esports.
While esports and gaming (it’s important to make a distinction between the two) are nothing new, there are few outside of that realm who, even a few short years ago, could have predicted the mainstream popularity they now enjoy.
Indeed, according to a report by esports analytics provider Newzoo, in 2018 there were an estimated 380 million esports viewers worldwide, a number that’s expected to jump to 557 million by 2021. Of that 557 million, 307 million are considered occasional viewers and 250 million diehard fans, which would be comparable to the audience numbers the National Football League (NFL) currently draws. Furthermore, Goldman Sachs reported that the global monthly audience for esports in 2018 was 167 million, giving it a larger reach than both the National Hockey League (NHL) and Major League Baseball (MLB). So change, as they say, is afoot.
But what’s driving this change, and does the rise of esports constitute an existential threat to traditional sports leagues? Depends on who you ask. But a few things are certain in these uncertain times for pro sports: there are a far greater number of sports and entertainment options available to sports fans, there has been a decline in TV viewership right across the board, new technologies have led to a change in sports consumption behaviours, fans now expect a personalized relationship with their teams, and attention spans are shorter. That last one typically finds fingers pointing at an often (and unfairly) maligned group: millennials.
The millennial blame game
Blaming millennials for, well, everything has become a popular sport in and of itself. And blaming them for declines in audience and TV ratings for pro sports would seem only logical to those, especially sports executives, who fear that millennials are disengaging from live sports at the same time as they forego cable TV.
However, a recent McKinsey & Company analysis of Nielsen data found that, lo and behold, millennials are sports fans, too. In fact, while Gen Xers outpace millennials 45% to 38% when it comes to being committed sports fans, that gap evaporates when it comes to the National Basketball Association (NBA), Ultimate Fighting Championship (UFC), Major League Soccer (MLS) and college sports, for example. (Interestingly, the analysis also found that the gender gap is narrowing, with 45% of millennial women identifying as sports fans, as opposed to 41% of female Gen Xers.) It turns out that it’s not being fans of sports that’s changed, but rather the way in which they consume their sports.
“The trend lines are pretty clear,” says Jon Trzcienski, Vice President of Marketing for the Montreal Canadiens hockey team. “We’re seeing millennials and Gen Z turn away from broadcast, they’re consuming stuff in different ways. So if you’re breaking things down by age categories, over-the-top video platforms, the social media rendering, all the YouTube or [gaming platform] ”
“If you’re measuring things purely based on a broadcast metric on TV, I think they can shoulder some of the blame for sure, but the challenge therefore is to go where they are and find them and connect with them on the platforms that they use a lot.”
For his part, Sumit Arora, Senior Director of Strategy and Analytics at Maple Leaf Sports and Entertainment (whose assets include the NBA’s Toronto Raptors, the NHL’s Toronto Maple Leafs and MLS’s Toronto FC, among others), concurs that segmenting your audience generationally isn’t necessarily the most effective way to target them.
“I think it’s hard to characterize everybody simply by their age,” says Arora. “When we look at our customer segment, even within a general age bracket, we see there are your super fans that are really committed to the team — they follow and engage the team in every way possible. And you have people who are more focused on event-seeking, and they look at sports as an opportunity to come together and enjoy the experience. And then you have people who are just casual, bandwagon people who get excited when the teams are winning.
“With the Raptors this year, for example, we saw all of it. So I think there are definitely millennials that are avid fans and are engaging with the team and watching the broadcasts.”
If you can’t beat ’em, join ’em
“Personally, I think that esports and professional sports are going to co-exist. I don’t think that esports will necessarily challenge or mark the death knell of any professional sports league.” — the Montreal Canadiens’ Jon Trzcienski
It goes without saying that engagement with millennials and Gen Z is top of mind for every traditional sports league. For many, if not most, pro sports teams, esports are and will be a critical piece of the engagement puzzle when it comes to tapping into that lucrative, if ever more elusive, 18-34 market.
Given that 79% of esports viewers are under 35 years old and, according to a 2018 joint Nielsen and Twitch study, that 38% of U.S. males under 25 identify as esports fans, it’s small wonder that numerous traditional pro sports teams are buying and/or developing their own esports franchises and teams as a means of driving interest in their own product. The question is whether that could possibly be detrimental to the success, and ultimately the survival, of the traditional sports model in the long run.
“Personally, I think that esports and professional sports are going to co-exist,” says Trzcienski. “I don’t think that esports will necessarily challenge or mark the death knell of any professional sports league. We’re seeing reports early that are projecting esports will have more viewers by 2021 than just about every major North American league outside of the NFL. That’s certainly an audience that is growing. I don’t know if it’s at the expense of any other league, but I think you need to certainly respect and be aware of it.”
In February of this year, the Montreal Canadiens held their first esports initiative, a one-day NHL 19 tournament that drew over 1,500 registrants and was broadcast on Twitch.
“We dipped our toe in the water with [our own] tournament, and we were quite happy in terms of the results on our feed on Twitch,” says Trzcienski, “and we were already quite pleased with the audience and the interest that was shown in the tournament overall.”
Getting their head in the game
“I think gaming is simply a cultural lens through which you can engage with the fans. I think you can be an esports enthusiast who loves gaming and another part of you is someone who likes to be a diehard Leafs or Raptors fan. I don’t think it’s an either/or phenomenon. ” — MLSE’s Sumit Arora
For forward-thinking traditional sports organizations, the future is now. These teams are — for the time being at least — looking at the rapid ascension of esports as less of a threat to their survival and more of a tool to woo new, and young, fans.
“One thing I think it’s important for us to acknowledge: esports isn’t coming, it’s here,” says Arora. “It’s definitely arrived with a big splash. There are some incredible organizations and there are some incredible personalities that are out there connecting to fans in a way that’s unprecedented. For us, esports is something that we’ve definitely become more involved in and more enthusiastic about as we’ve learned through the programs that we’ve launched through each of our pro sports teams.”
MLSE’s new programs include their Raptors Uprising team in the NBA 2K esports basketball league, run by the NBA and Take-Two Interactive, the Leafs Gaming League for players of NHL 19, and TFC Gaming, which fields competitors in the global FIFA circuit for the Interactive World Cup.
“I think gaming is simply a cultural lens through which you can engage with the fans,” says Arora. “I think you can be an esports enthusiast who loves gaming and another part of you is someone who likes to be a diehard Leafs or Raptors fan. I don’t think it’s an either/or phenomenon.
“I think the more we do in esports and the more we learn about esports, the more we’re going to be able to infuse gaming into our organization in a way that’s part of the fan experience that our fans want and we provide for them.”
Up your game!
Hone your team’s competitive edge at C2 Montréal, May 27-29, 2020.
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