The winter 2022 sports calendar will focus on Super Bowl 56 at SoFi Stadium in Los Angeles (Feb 13) and the Beijing 2022 Winter Olympics (Feb 4 to Feb 20). But these events are coming at a time of transition for sports and sports media. We are in a moment when demographic trends, technological innovations, and the continuing COVID situation are remaking the culture. This cultural remaking has significant implications for both domestic and international sports businesses.
The Super Bowl is the closest thing to a holiday celebrating modern American culture. It is celebrities and ultra-passionate consumers of America’s most dominant sports league gathering together for a week of festivities that culminates in a media event so spectacular even the advertising becomes part of the show. The Super Bowl is the culmination of a season of competition that always generates compelling storylines. Last year, we had a battle between the all-time great Tom Brady and the heir apparent, Patrick Mahomes. The Super Bowl inevitably is the most viewed television program, and it commands the highest fees for advertising slots.
The Olympics is a worldwide festival of sports, media, and marketing. It is the world coming together for multiple weeks of athletic competition interjected with massive marketing campaigns in a location that showcases some country. The Olympics is the best example of narrative-based sports broadcasting. The athletes are often unknown, so the network needs to present compelling backstories between moments of athletic competition. The Olympic Games also generate a massive TV audience and lucrative advertising fees.
But, both events, the Super Bowl and the Olympics seem to be facing increasing challenges in attracting younger audiences.
Figure 1 shows Super Bowl viewership (and a moving average trend line) from 1968 until 2021. Super Bowl viewership peaked in 2015 at about 111 million and dropped to 91.6 million last year. Sports ratings may be affected by many factors, and it is easy to “find” trends that may be noise. But, it does appear that Super Bowl viewership is on a downward trend.
Table 1 shows viewership for the Olympic Games going back to 2000. The Olympic data is noisier than the Super Bowl data, but it again appears to be a significant dropoff in viewership since the middle of the last decade. The Rio Summer games attracted 27 million viewers compared to 15.6 for the Tokyo Summer Games.
In the summer of 2021, the Emory Marketing Analytics Center launched the “Next Generation Fandom Survey” (designed by Professors Mike Lewis of Emory and Yanwen Wang of UBC) to understand better how fandom is evolving. The survey highlights how changing patterns of sports fandom are creating challenges and opportunities for events like the Super Bowl and the Olympic Games.
A critical survey finding is a distinct dropoff in sports fandom for Gen Z (The survey defined Gen Z as individuals born from 1996 to 2010.) relative to Millennials and Gen X. Figure 2 shows how sports fandom varies across generations. In this figure, “Avid” sports fans are individuals ranking their fandom as a 6 or 7 on a 7 point scale. “Anti” fans rank their fandom as a two or less on the scale.
The data shows a clear trend of diminished interest in sports in Generation Z. The percentage indicating intense fandom is just 23% for Gen Z compared to 42% for Millennials and over 30% for Gen X and the Boomers. Perhaps, more critically, the percentage indicating that they have a minimal interest or dislike sports is about four times higher in Gen Z compared to older cohorts. The percentage of disinterested or “Anti” fans may be significant for mega-events like the Super Bowl or Olympics that rely on attracting a broad audience of casual fans.
Figure 3 shows the percentages of “fans” of Football and Individual sports. Football fandom drops from over 60% in the Millennial, Gen X, and Baby Boomer segments to just 27% for Gen Z. For Individual Sports (the sports that dominate the Olympics), fandom drops significantly for Gen Z relative to Millennials and is about 10% lower than for Gen X and Boomers.
Figure 4 shows the percentages of uninterested. The percentage of Gen Z with negative feelings about sports is growing relative to older generations. Football's “Anti” percentage is more than four times higher relative to older generations. For Individual Sports, the “Anti” percentage grows in the Gen Z segment. The percentage uninterested in individual sports is about 40% higher relative to Millennials and over 20% higher than in Gen X.
The percentage of Avid fans represents the likely core audience for different sports. Fans are the group that will seek out programming. Football “fans” are the group that will watch an out-of-market game on a Thursday evening. Likewise, the hardcore skating or skiing fan will find the occasional broadcast of their beloved sport. The “Anti” or “Disinterested” segment is the group that will avoid watching. A critical finding from the survey is that the casual fan segment seems to be shrinking in Gen Z. The casual fan is the key to a sporting event transcending its core audience to become a mass-market product.
The explanations for the decreasing ratings often focus on shifts in viewing habits from TV to streaming. Our data suggests something more fundamental is happening. Generation Z is simply less interested in traditional sports properties. The decrease in viewership for the Super Bowl and the Olympics began when Gen Z reached adulthood. Technological trends may drive some of the dropoffs in viewership. Still, it also appears to be caused by Gen Z replacing Baby Boomers and the Silent Generation as core media consumers.
An added element to this story is the importance of live sports in driving advertising revenue. NBC is reported to be asking $6.5 million for a 30-second ad slot for the 2022 Super Bowl. This price represents a significant increase from last year when the going rate was $5.5 million. As Super Bowl viewership has dropped since 2015, the cost to advertise has increased from $4.25 in 2015 to $6.5 this year. A more than 50% increase in price for a product reaching about 20% fewer viewers.
Olympic advertising prices are more difficult to assess because there is less media attention than for Super Bowl ads. But it has been reported that NBC generated far more ad revenue for the Tokyo Games than the RIO Games.
In both cases, it’s a strange negative correlation. It costs more to reach fewer people.
But all things are relative. As the mass market splinters, it gets harder to reach an audience through traditional TV. This list from Variety shows that 18 of the top 20 view shows of 2021 were sports. The most viewed non-sports programming was the post-Super Bowl episode of The Equalizer, with an audience of 23 million. For reference, this is about the same audience as the average episode of Seinfeld or ER back in the 1990s (and they needed a Super Bowl lead-in). Companies are willing to pay the Super Bowl prices because it’s increasingly difficult to find an audience.
The hope has always been that live sports would save traditional cable and broadcast TV. This hope becomes ever more tenuous as Gen Z becomes the primary audience. It’s hard to predict the audience for the next Super Bowl or Olympics as the success of each event is driven by the storylines of the teams and athletes featured. But, the trends and macro forces suggest that we will see weaker viewership.