In 2023, the “sports technology” sector reached a historic revenue milestone, recording more than US$37 billion in business and raising US$7 billion for investment funds, as revealed by investment bank Drake Star's new report.
In this case, sports technology means the use of innovative tools, equipment, and methods that seek to improve athletes' performance, as well as enhancing sports broadcasts and enriching the fan experience.
According to the Drake Star study, more than a thousand major financial deals closed over the previous year included some component related to sports technology. This fact supports the market's high expectations for the technology segment. Several areas will be affected by the increased use of technology in sports, and all have the potential to provide excellent experiences both for fans and those who work in sports.
The Billion-Dollar Future of Artificial Intelligence (AI) in the Sports Market
The advent of AI was an innovation milestone for a large share of economic sectors around the world. Sports did not remain untouched, at least according to a report from Globant, one of the most important companies in the sports-technology segment. The company has formed important partnerships in recent years, such as when it sponsored the Women's World Cup hosted in New Zealand.
In the previous year, Globant announced an agreement with LaLiga and Microsoft to create tools for training, fan engagement, and broadcasts. These were initially focused on football, with plans to expand to other sports later. The partnership between the Spanish league and Globant resulted in the creation of a joint venture called LaLiga Tech, launched in 2022.
All this dedication to artificial intelligence has a clear purpose: it is a rapidly expanding market that is still far from reaching its full potential. As revealed by Globant's “AI Is Changing the Game” report, average growth of 30% is observed each year. The estimate is that this sector will generate US$19 billion in activity by 2030, which would lead the entire sports-technology market to move more than US$50 billion in the coming years.
AI Can Completely Change How Fans Interact with Sports
Technology changes the way sports organizations and sponsoring brands connect with fans. Real-time translated captions, automatically personalized reels, and inclusive game summaries adapted to a variety of interests are some of the available tools, allowing closer contact with supporters.
Increasingly, technologies involving AI are helping remove intermediaries between fans and their idols. Thanks to this, it is very easy today to access content that is not only connected to fans' preferred sport but also personalized and focused exclusively on each supporter's different profile.
Another area likely to be widely affected by technological advances in sports is sponsorship. The same Globant report predicts that in five years, at least one quarter of the activities currently performed by 74% of marketing professionals will be automated through technology. This does not necessarily mean there will be mass layoffs in the sector, but rather greater demand for more highly qualified labor.
Such technology connected to an advanced algorithm should naturally also assist in creating advertising campaigns, for example, by suggesting demographic data and the most appropriate available channels, ensuring that the message reaches the desired target audience.
Despite the Optimism, Challenges Remain
Although AI represents an important advance, many challenges and a long road remain to be explored. Careful strategic planning is essential before adopting expensive technologies, even relatively short-term ones such as artificial intelligence, to ensure investments produce results before the “bill comes due” in an unsustainable way. After all, results must be delivered in the meantime with a solution that remains quite unclear to many people.
There are also legal questions involved, especially concerning intellectual property, data protection and privacy, and responsibility for the results produced by such tools. Despite this, the sports sector should increasingly employ technology in essential aspects of its operations, even while still far from reaching the peak of what the sports-technology market can offer us.
