March 19, 2019

Old Game, New Blood

Spark No. 9 is often asked to help target millennials. In fact, we are asked so often that we started to think of “target millennials” as a trope for “grow.”

But it’s nothing to be light-hearted about. Many organizations are in “MILLENNIALS OR BUST” mode. And if you want to see why millennials and Gen Z are so important, look no further than major league sports.

On the face of it, the National Football League is the big kahuna. In 2018, the average NFL team was worth $2.6B, compared to $1.7B for the NBA and $1.6B for the MLB.

But look a little closer. NFL team valuations rose only 2% over 2017. MLB fared better with a 7% bump. But—stand back, people!—the NBA average team valuation grew 22% from 2017 to 2018. Wowza! What gives?

Demographics, for one thing. The average age of a Major League Baseball viewer is 57. For the NFL, it’s 50. But the NBA is only 42. The difference in team valuations is, to some extent, a view of future cash flows and, without a lot of young fans, the future is one long bad season. The significant difference in ages is the result of very different strategies—and the difference may have a huge impact on the future of each league.

Hail Mary Time

The NFL's viewership declines and demographics have been under a microscope the last few years as the Colin Kaepernick controversy and domestic violence reports took their toll. But the situation is more nuanced, and this SB Nation piece does a good job of looking at viewership stats in perspective—after all, people are watching less traditional TV overall anyway.

The NFL’s real problem is the long-term one: are 13-17 year-olds with a passion for social media and esports going to switch gears at some point in the future and embrace the gridiron? Doubtful. This is a case where an organization’s greatest strength—strong traditional viewer franchises to protect—may be its greatest weakness in the long run.

The Long Game

MLB seems to be in even worse shape, demographically speaking. Does fixing the problem mean changing the game? There is a good rundown in this post of suggestions but, frankly, the responsible thing may be to harvest cash flows judiciously.

Fast Break

If we were betting types, we would go big on the NBA. The league’s strategy of embracing social media, including the Kardashian Curse, has paid off big time. And its diversity and international appeal has helped it build a year-round franchise around the globe. Can it unseat soccer as the world’s favorite sport? Unclear, but commissioner Adam Silver seems up for the challenge.

There are a few storm clouds to deal with, however. The NBA gets an abundance of press for its strategy—there is a good summary here—but is it actually a flawed strategy? Too dependent on a single player? Let’s hope LeBron has the league’s long-term health in mind…

Latest Posts



Looking to grow? Shoot us an email. We're excited to meet you!