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Taking the Field

Updated: Jul 28, 2023

A Strategic Approach to Launching a Professional Sports League

 

The Rundown

  • The SCORe Model is a comprehensive framework that divides the growth journey of sports leagues into four phases: Startup, Cultivate, Open Up, and Renew.

  • The Startup phase focuses on establishing the league's foundations, nurturing the fan base, and using regional teams and tour seasons to bring games to different markets.

  • The Cultivate phase aims to solidify a league identity that attracts more fan interest, sponsor support, and new ownership groups by focusing on gameplay and authentic player storytelling.

  • In the Open Up phase, sports leagues shift from centralized decision-making to empowering individual teams, establish a permanent presence in major markets, and foster a fan "pull" culture for increased loyalty.

  • The Renew phase reflects a stable business model seeking growth with newer strategies like international expansion, calendar extension, and vertical integration to build relationships with newer and hardcore fans.

 

Growth of Legacy Leagues

Over the past century, American sports leagues have experienced remarkable growth and development, with a few notable factors contributing to their widespread success. One of the most significant drivers has been the expansion of television broadcasting, which brought the excitement of sports directly into the living rooms of fans across the nation. Iconic events such as the creation of the Superbowl and classic rivalries like Magic Johnson and Larry Bird captivated viewers, transforming sports into cultural phenomena and attracting millions of dedicated fans. New technologies also have played pivotal roles in expanding the leagues' reach and popularity. In the 1980s and 1990s, the sports broadcasting landscape underwent a revolution with the rise of cable and satellite television. This enabled fans to access games and events in real-time from the comfort of their homes, significantly increasing viewership and fan engagement. Even today, advancements in high-definition broadcasting and the integration of digital streaming platforms and social media have revolutionized the sports viewing experience, offering fans convenient and immersive ways to follow their favorite teams and players. Legacy leagues strongly benefited from these advancements in technology. At the same time, they started a shift in thinking that a sport can be a profession and not just a pastime. These legacy leagues were inherently granted the flexibility to grow, refine, and gain traction over several decades. To illustrate this point, we plotted the expansion of leagues by team count as a proxy for growth over time.


By contrast, a new league aspiring to establish itself today faces a significantly shorter runway to gain a foothold compared to the incumbent leagues. A new entrant must contend with heightened competition and changing audience preferences. Today’s sports enthusiasts have access to an unprecedented array of entertainment options, ranging from traditional sports leagues to emerging esports and online gaming platforms. The proliferation of digital media and the prevalence of social networks offer new ways for fans to consume sports content and engage with athletes and teams directly. A new league must navigate a highly competitive landscape, vying for attention in a saturated market. The bar for production quality, fan engagement, and technological integration has been set high, raising the expectations for any new entrant to compete. More recently, sports have become more prominent as an investment asset class with clubs and teams being purchased by private equity and wealth managers (Sports Business Journal). Specialized sports venture capital firms have started to emerge with a keen focus on capturing value in early leagues and growing sports. This influx of capital requires a new league to also focus on savvy business decisions as more rigor is being put on leagues as a business.


These factors point to shorter runways for new leagues to establish themselves. We can already see that these new leagues are expanding much faster with the above chart illustrating new leagues reach 20 teams in about half the time of a legacy league. New leagues must move quickly & wisely in order to gain a foothold and build a viable business model amidst the highly competitive sports entertainment landscape.


Introducing the SCORe Model


When it comes to launching and growing a sports league, there are numerous factors to consider and stakeholders to manage. Drawing insights from the growth patterns of past successful leagues, we have developed the SCORe Model to guide the growth journey. The SCORe Model is a comprehensive framework that divides the league growth journey into four distinct phases: Startup, Cultivate, Open up, and Renew. The moniker “SCORe” is an acronym derived from the starting letters of each phase.


By examining the trends and strategies employed by established leagues, we aim to provide a comprehensive framework that helps new leagues think strategically about managing their key stakeholders in Fans, Players, Teams/Owners, and External Partners such as investors and sponsors. Aspiring leagues have to balance growth of the game with viable business decisions across several phases of growth. It's important to note that as the league progresses through the SCORe Model, the time required for each phase lengthens but there is not a prescribed length of time needed. This recognizes that the challenges and complexities increase as the league evolves and grows. It’s important to note that while these phases are presented as discrete, execution is likely to take a spectral view where a league may be engaging in activities across phases. These phases are meant to serve as guides rather than prescriptive checklists. The takeaway is by using a growth framework like the SCORe Model, new leagues can strategically manage their growth, allocate resources effectively, and maximize their chances of long-term success.


Phase 1 - Startup

Key Points

  • Startup phase focuses on establishing league foundations and nurturing a fan base by making individuals who already play the sport the focal target audience

  • Regionally aligned teams and tour season format are used to bring games to different markets and reduce burdens on the league

  • Early governance with centralized decision-making and equal distribution of finances and player talent are used to foster a competitive, exciting game

The Startup phase focuses on establishing the foundations of the league that are necessary for success. The league's main focus is on nurturing its fan base and establishing a viable foundation to build the league’s growth. In this phase, we assume the sport itself is already established with some base of players who actively engage in the sport recreationally. In particular, these are the early target audience we want to nurture to establish a fanbase. Two key levers a league has at this stage to grow a fanbase is a passion for the sport and regional affinities. Targeting individuals who already play the game taps into their passion and creates a vested interest in the growth of the sport. Leagues can tailor early marketing & decisions that emphasize the purity of the game that will resonate with these fans. Similarly, regional identity is a very strong driver of fandom and identity (UT Knoxville). Fans rally around their “local” team since it represents their home and they identify themselves with the team. Leagues should establish teams regionally that let a cohort of fans create a connection with their “local” team.


Establishing regional teams also provides logistical advantages as well. A regional league playing in a small part of the country may struggle to achieve sustained viewership and growth so leagues need to think nationally. Technological innovation and consumer preferences have made some form of broadcasting table stakes for a league. It is still important to bring games to the fans, too. This can be accomplished by using a tour structure built around the regional teams. In this approach, the season is split into series of games where the league’s teams co-locate to a common venue to play for a short period of time before the tour moves to another facility in another region. Each team will play host to a stop on the tour throughout the season. Major League Pickleball uses a similar regional touring structure in their current format. This approach allows the league to establish critical footprints in regions for fan attraction, brings games to markets to be enjoyed locally, and consolidates managerial and financial resources to reduce burdens on the league compared to individual “home vs visitor” games. It also allows the league to make the venues their own for a period so they can deliver a fan experience that creates excitement and establishes credibility.


Early governance and team ownership significantly impact a startup league's trajectory. We believe that centralized decision-making and league ownership of the teams best align financial levers and incentives with an overall league strategy. One of the league's primary goals is to create an on-field product that people want to watch, particularly one that is more competitive and less predictable to add drama and excitement (HBR). In particular, the league should operate on a principle of equal distribution of financial benefits and player talent allocation to put teams on equal footing. Balancing excitement with the purity of the game fosters strong interest through evenly matched games that highlight athletes' and coaches' skills without favoring any one team. This approach ensures strong competition that can keep fans engaged and helps form a sustainable foundation for long-term success.


Phase 2 - Cultivate

Key Points

  • The Cultivate phase aims to form a league's identity to attract more fan interest, sponsor support, and new ownership groups that drive the league’s continued growth

  • The image must highlight the gameplay and help fans identify with the players

  • Creating an image that authentically embraces players’ stories is critical to deepening the relationship with fans and attracting the right sponsors and financial backers

The Cultivate phase is about forming the league’s identity to cultivate more fan interest, more sponsor support, and to attract new ownership groups to support the league’s expansion. At this point, the league has established a commercially viable operating model with a governance structure to shepherd it forward. Now, it needs to build an image that draws more fans and entices more sponsors and new ownership groups to financially support the league’s expansion.


The league’s image should highlight the gameplay and help fans identify with the players. NFL Films was a pioneer in doing this. It used never-before-seen footage to take fans closer to the action. It used storytelling techniques to cast coaches as generals and players as warriors. It used orchestral music to build tension with every snap. In the process, it shaped how the audience understood football (The Atlantic). And in less than a decade after the launch of NFL Films, football had become America’s favorite spectator sport (Gallup). This approach still works, as the growth of Formula 1 in the US following the debut of Netflix’s Drive to Survive (NY Times).


However, as more sports become accessible via broadcast and the competition between sports increases, leagues will need to further distinguish themselves. An image that strongly reflects the players will create a unique identity that more deeply resonates with fans and can draw in sponsors and new owners to grow the league. Over the past decade, the WNBA has leaned further into an image that reflects the players. It was the first professional league to celebrate pride. It was the first league to dedicate a season to social justice (ESPN). And the players publicly forced out anti-Black Lives Matter ownership group (NPR). And while these stances may deter some brands, their authenticity resonates with fans and can attract loyal partners to sponsor the league. In fact, in 2020 when the players were dedicating the season to social justice and supporting Rafael Warnock’s campaign for senate against then-Atlanta Dream owner Kelly Loeffler (NY Times), ratings for the WNBA were not negatively impacted (NY Times). Additionally, after the season, they also brought in Google as a top-tier Changemaker partner to grow the league (SportsProMedia).


It’s important to note that the identity of any league shouldn’t solely be about activism. This isn’t a political organization, it’s a sports and entertainment business. The reason someone watches the WNBA is because they find it to be an entertaining product. As part of that experience, though, they are bought into who the players are and what they represent - even if that includes an injection of activism.


Creating a unique league identity also allows the league to attract new owners that fully embrace the league’s vision, values, and trajectory, and begin the move away from league-owned teams. In cases like the WNBA, this would also include moving away from a model in which only NBA teams own WNBA teams.


However, once the league has a concrete identity that resonates with fans, players, and sponsors, it can use that foundation to expand as a business in the next phase - Open Up.


Phase 3 - Open Up

Key Points

  • In the Open Up stage, sports leagues shift from centralized decision-making to empowering individual teams, allowing them to make administrative decisions and embrace unique identities

  • Strategic focus is on establishing a permanent presence in major markets with dedicated home stadiums, fostering a stronger connection between teams and fans

  • Emphasis is placed on creating a fan "pull" culture, encouraging active fan engagement in shaping their team's narrative and identity, leading to increased loyalty and passion

In the third stage of growing a sports league, known as "Open Up," there's a notable shift from centralized decision-making to empowering individual teams and owners. The league aims to transition to a more democratic model, enabling franchises to make their own administrative decisions and embrace their unique identities. During this phase, the league loosens efforts to maintain an even playing field, allowing teams to showcase their strategic creativity on and off the field. The league should introduce incentive structures for on-field performance, such as creating a merit-based talent allocation, which makes a team prioritize player development and talent management. Capital allocation and revenue sharing become more performance-oriented rather than an equally shared, awarded on individual franchise success. Similarly, franchises are encouraged to develop their own marketing and partnership strategies, aligning with their local and regional markets, but careful not to conflict with league-driven efforts. Teams must still field a competitive and entertaining team in order to stay relevant which continues to help the league growth.


A crucial aspect is establishing a permanent presence in major markets and “set down roots”. This focus is evident in facilities and the season structure, as the league shifts from a tour model to a traditional "home vs away" format like legacy leagues. Teams need their own facilities to host visiting teams and create a fixture that fans and players rally around (University of Rochester). Though more capital and logistics are required, this change allows clubs to create a strong sense of identity and belonging with their own home venues, strengthening the connection between teams and fans. Playing home games generates excitement, rivalries, and a deeper connection between teams and their fans. The league has a fiduciary responsibility to support processes to help individual teams establish their home venues successfully (KPMG).


A strong emphasis is placed on fostering a fan "pull" culture, where fans feel a deep sense of ownership and belonging to their teams. Central to this phase is encouraging the embracement of the teams by fans and actively shaping their team's narrative and identity. This concept is easily recognized in the growth and passion of the Bills Mafia (Marca). Initiatives like fan forums, club-specific events, and fan-driven content foster a vibrant and passionate community that drives the league forward. Teams seek to align their fans' culture, unique messaging, and identity conveying that clubs belong to the fans, strengthening the emotional connection, and fostering loyalty.


Success in the Open Up phase is becoming a lasting fixture in the current markets. The focus is maximizing the presence of the core product in the existing markets before looking broader in the Renew phase.


Phase 4 - Renew

Key Points

  • Renew phase reflects a stable business model that needs to find sources of growth beyond expansion

  • Certain strategies (international expansion) focus on building relationships with newer fans, while others (calendar extension, vertical integration) are geared towards building deeper relationships with hardcore fans

  • Success in the Renew phase requires executing the Cultivate and Open Up phases for any strategy

With enough success, a league will eventually reach a level of scale and stability that makes expansion within its home market unpalatable for either prospective or existing ownership groups. At this time, it will look to a few strategies to continue growing: Calendar extension, vertical integration, and international expansion. In executing any of these strategies, leagues will have to apply lessons learned from the SCORe framework - with most of the emphasis being on the Cultivate and Open Up phases.


International expansion

International expansion is specifically about establishing a team overseas. The pathway involves developing an international market first through broadcasting games, then hosting exhibition games. This is in an effort to understand what components of the domestic game experience translate to fan cultures overseas. Once the market is sufficiently established, the league can then begin hosting regular season games there. This not only serves as an opportunity to further grow the market, but it provides an opportunity to learn how to navigate the logistical complexities of having an overseas team as part of the primary competition – a critical step to expanding overseas.


Calendar extension

Calendar extension typically entails turning teams’ front office activities into events or creating new competitions. These are strategies intended to capture viewership beyond the core season games. Examples of the first type of calendar extension include creating televised or in-person events about trade deadlines, free agency, draft, scouting combines, or other offseason activities. These events appeal more to the hardcore fan as they’re not about the actual sport. but are about how strategic planning can affect their team’s performance. It’s the equivalent of worrying about who the CEO of Hershey’s is because you want to know what they’ll do to your favorite candy bar.


The second type is like the recently announced NBA Cup. Prevalent in Europe, these additional competitions are at their best when they are distinct from the primary competition. They create matchups that can’t happen in the primary competition. They can drive interest in the league and bring in new viewers. As currently constructed, the NBA Cup and WNBA’s Commissioner’s Cup aren’t distinct from the primary competition in each league. In fact, WNBA players have trouble distinguishing these games from regular season games. That said, if structured correctly they can create more excitement and draw in hardcore fans to parts of the season in which interest typically lags.


Vertical integration

Leagues can also launch a developmental league to better manage the talent pipeline. Developmental teams can deepen the league’s connections within a geography by giving fans a cheaper option to watching their sport closer to home. They also create additional opportunities for players, coaches, referees, and sports management professionals to develop. Given the focus on development, these leagues are often laboratories for teams and leagues to experiment with new strategies with little impact on the primary competition (i.e., primary product). In fact, MLB tested its new rules in its minor leagues before rolling them out in the majors.


Application

The table below shows how the SCORe model can be applied to a sample of existing leagues. It highlights where the leagues currently are and provides guidance for what areas each league can consider as it seeks further growth. It’s important to note that while these phases are presented as discrete, it’s plausible that a league is engaged in activities across the model. The phases are meant to serve as guiding principles, rather than be prescriptive.






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