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Sports and the ‘Millennial Problem': Is It Game Over? – Part 2 (Guest Blog)

Fewer and fewer Millennials are tuning in to watch the sporting events they grew up with. With drop offs in viewership this steep, a renewed sense of urgency has struck at the hearts of network execs, league owners and advertisers.

As you may have read last week in part one of our multi-week series on “Sports and The Millennial Problem,” Millennials are not tuning in to watch sports like their older counter parts and are bypassing traditional pay TV subscribership en masse. A recent survey put Millennials who aren’t cord cutters, but instead are cord nevers, people who have never paid for a cable or satellite TV subscription in their adult lives, at about 9 percent of the population. They are really more common that we might have once thought.

Fewer viewers = fewer fans

As our findings suggest, the falloff in TV subscribership could have even farther-reaching consequences. When asked to list key reasons why they became sports fans in the first place, respondents cited “watching games on TV growing up” as their top reason (30 percent), equal to the number who indicated “playing sports as youngsters.” Which, of course, is no surprise — for years, viewers have been able to easily access basic sports programming as part of the standard cable TV package, or pay a premium for an even broader range of both regional and national major-league sports coverage. Given that TV has been the historical conduit for sports appreciation, the decline in legacy viewership points to a concurrent falloff in sports fandom going forward.

Alternative challenges

As they continue to move away from traditional sports viewing, a growing number of Millennials are instead flocking to alternatives like eSports, including live video-gaming competitions such as “The International”, an annual tournament devoted to DOTA 2. Though such events aren’t organized in the traditional sense, the growing popularity of eSports nonetheless has the potential to further diminish Millennials’ loyalty to traditional sports.

Consider, for example, BAMTech’s — Major League Baseball’s video streaming and technology services company — recent deal to pay $300 million to Riot Games through 2023 for the streaming rights for its eSport, League of Legends.1 Current research finds Millennials evenly split in their allegiance to traditional sports versus eSports (42 percent versus 40 percent, respectively); by comparison, slightly more than one-quarter of non-Millennials follow eSports, while the majority (56 percent) maintain a preference for traditional sporting events (see Figure 2).

1 “MLB’s BAMTech inks $300M exclusive deal with Riot Games,” espn.com, Dec. 17, 2016.

Sports Survey LEK Consulting

Even so, 26 percent of millennial eSports enthusiasts reported a significant uptick in eSports viewing over the past year; an equal number marginally increased viewership during the same period. Consequently, some 61 percent of eSports followers spent less time in front of the tube over the past 12 months, 45 percent cut back on traditional sports viewing, while another 35 percent attended fewer sports events due to increased eSports engagement.

New approaches needed

Particularly as Millennials become increasingly dominant within the marketplace, sports industry leaders (i.e., leagues, broadcast partners, other stakeholders) must sharpen their game, including offering programming that caters to the needs of these highly mobile, less engaged viewers. In the next installment, we will identify several strategies for helping those in the traditional sports marketplace target both avid and casual Millennial fans through alternative platforms such as OTT/DTC, fantasy sports and eSports, including bringing digital events into the traditional sports ecosystem where possible.

This is Part 2 in a series by Alex EvansGil Moran and Dan Schechter from L.E.K. Consulting’s Media & Entertainment practice.

Gil Moran is a Managing Director and Partner in L.E.K. Consulting's Los Angeles office. He joined L.E.K. in 2008 as a Consultant and has broad experience in strategy, mergers & acquisitions and consumer research. He is focused in the Media, Entertainment & Technology sectors, advising clients on a range of critical strategic issues, including growth strategy, product configuration, pricing and monetization, and due diligence, among others. His experience extends into many sectors including sports and retail. Gil graduated with honors and an LLB Law Degree from the University of Warwick and earned an MBA from Harvard Business School.