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There was a very specific moment when the crisis underway in the sports industry became clear to Angela Ruggiero (MBA 2014).
It was August 4, 2015, when Disney CEO Bob Iger announced in the company’s quarterly earnings call that its subsidiary ESPN had sustained “some modest sub losses,” which were later revealed to be 3 million viewers in just one year. Ruggiero, four-time women’s hockey Olympian and gold medalist, was on the board of the US Olympic Committee and a member of the International Olympic Committee, where she was constantly weighing the future of the Games’ most valuable product: live broadcasts. And here was the person in charge of the world’s largest sports network saying things weren’t looking so sunny for the sports broadcasting model. “For the first time, it felt like there were some tangible numbers to what we all felt,” she says. People were cutting the cord and younger audiences were finding new platforms; the world outside of the sports bubble was changing and sports was lagging. It felt like seeing a crack in the foundation. A year out of HBS, her head still swimming with Professor Clay Christensen’s theories, Ruggiero saw it clearly: “A trillion-dollar industry, suddenly ripe for disruption,” she says.
Ruggiero cofounded the Sports Innovation Lab in late 2016, determined to ready the industry for the revolution. The lab is a research firm, but it’s not churning out quarterly white papers. It’s building a kind of living, breathing index, says Ruggiero, fed by some four thousand media sources that can give sports business executives an immediate idea of what platforms, products, or people are moving the industry—and which ones aren’t. “We’re helping our clients stay on top of comparative analysis in real time,” she says.
The central mover of the sports market? The evolving fan. Ruggiero breaks fandom into eras: First came the Age of the Local Fan, which lasted until the mid-1950s and saw geography as a determining factor. The Age of the Global Fan, which takes us up to today, saw tech innovations expand the reach of sports. Now we’re entering the Age of the Fluid Fan, she says, in which fans are becoming more open to switching allegiances, trying out new platforms, and constantly demanding convenience. “Our thesis is you need to operate differently in order to engage that fluid fan,” says Ruggiero. That means tech-enabled smart venues, immersive and interactive media, and new ways to bring in audiences with performance data.
It requires a long-term view from the C-suite, says Ruggiero. “The old business model of sponsorship, broadcast, tickets, and merch? Those revenue streams aren’t going to flatline tomorrow,” she says. “But through these early indicators, these cracks in the surface, we can see that the fan is fundamentally changing.”
Here, we offer four ways that Ruggiero and the Sports Innovation Lab say this new era is redefining the business of sports—and highlight four alumni who are already adapting to the new era.
