Leicester Tigers, an English rugby team, finished at the bottom of the sport’s Premiership in 2019, just about missing relegation. That’s when the club turned to AI to rate player performance and model how different actions would impact the club’s win probability.
There’s been no turning back since. The team won the 2022 Premiership, topping the table among 13 other teams, thanks to AI tools crafted by London-based sports data company, Prospect and its subsidiary, Oval.
Similar successes in cricket, soccer, and other sports point to the power of AI in shaking up sports as we know them.
The tech has numerous applications, including helping clubs scout for players, analyze their performance, and plan tactics against opponents in ways that were previously considered too complex. It also opens up new opportunities for fans and teams to engage with one another, catering to the ever-growing interest in sports.
“AI is providing new opportunities for sports properties to commodify its fan and athlete data, deepening its understanding of its customers and stakeholders, and making their brand more appealing to investors,” Motasem El Bawab, the chief information officer at the Valencia-based consultancy N3XT Sports, told Fortune.
The implication? AI’s influence on fan interest, team performance and overall competitiveness in sports could drive up how much sports clubs are worth.
According to Deutsche Bank analysts, sports mergers, acquisitions, and investment deals have soared in value by eightfold to about $37 billion in just four years. Sports have attracted big money, as seen with Saudi Arabia’s interest in soccer when it paid Cristiano Ronaldo millions of dollars, making him the highest-paid athlete ever. Interestingly, the timing neatly overlaps with when interest rates skyrocketed in response to high inflation, which drove down deal-making across other industries.
AI is among the reasons sports clubs have emerged victorious, the bank said in a note last week. That also means the onus is on sports teams to find the best data tools and use them more efficiently to stay ahead of the competition.
“The detractors argue that sports statistics will be a zero-sum game once every team has them. We believe the opposite,” the bank’s analysts Luke Templeman and Galina Pozdnyakova wrote in a note last week. “We argue that the proliferation of sophisticated sports data analysis will level the playing field in leagues that are dominated by a small number of teams.”
How does AI help make the big bucks?
A lot goes into valuing sports clubs. Apart from financial metrics like profits, a team’s tier, who plays for it, and its track record matter, too.
With AI tools at teams’ disposal, there are numerous opportunities to do what they’re doing, better, El Bawab said. He gave the example of how better performance and management strategies can directly increase ticket sales and merchandise sales.
“All of these factors can significantly raise a sports club’s valuation by demonstrating potential for higher, more sustainable earnings,” he said.
Given all that’s riding on such predictions, robust data is key. FC Barcelona, for instance, uses footage from past soccer matches to gauge the opponents’ behavior patterns and devise game plans accordingly. The English women’s cricket team works with Prospect to use AI to pick the right players for different opponents by simulating mock matches under thousands of scenarios.
“For the most ambitious and innovative teams, there is an exciting opportunity now to exploit all of that [computing power and modeling tech] and dare to do things a bit differently,” James Tozer, Prospect’s cofounder, told Fortune. “Teams that are able to utilize AI better than others will benefit undoubtedly.”
Mark Lillie, a partner at Deloitte and U.K. sports industry lead, told Fortune that while sports organizations are still gearing up to increase AI and data investments, the tech will likely play a significant role soon enough.
“As AI becomes a standard tool for competitive advantage, teams with strong AI capabilities and associated benefits, may become more attractive investments, potentially driving up valuations,” Lillie said, cautioning that the AI “won’t solve every problem” even if it’s very powerful.
For sports personnel who are skeptical about AI doing their work, Lillie says that “human expertise, intuition, and leadership will still be crucial for success.”
Creating more impact with sports fans
No matter the sport, fans are the lifeblood of the industry. Their interest helps drive the popularity of different clubs and leagues, bringing legions of supporters to stadiums and motivating players.
Even though fans have long been core to sports, there’s still a lack of engagement, Sentient Sports’s CEO Ryan Beal told Fortune.
“You get a wave in a season where the match day happens and a few days before the match this all builds up to the game and then, post-match, this sort of drops off again,” he said. When interest wanes, teams lose their fans’ engagement, which presents a huge opportunity to monetize that AI can help fulfill.
This can be in the form of new content based on fans’ preferences so each person interacts with their team of choice in a personalized way. AI tools can also help teams like Manchester United interact with a global fan base in their native languages. Manchester United’s revenue hit a record high of £648.4 million ($805 million) in 2023, but there’s scope for that number to nearly double if it capitalizes on AI, Beal said.
Digital experiences that help grow the fan base could open up a whole new revenue stream for sports clubs, which so far have relied on ticket sales, sponsorships and TV rights to make money.
The shift towards using AI is well underway—Deutsche Bank’s Templeman told Fortune that all sports teams are deliberating on how to use AI, with the only difference being how they choose to implement it.
As more instances of well-established teams deferring to new tech tools emerge, others will also begin adopting similar capabilities to keep up.
“There’s an opportunity for data to help smaller teams become big teams … [and] big teams to start monetizing their global fan bases,” Beal said. “So you either become a disrupter and everybody else catches up… or [you find] a new inefficiency to take hold of to stay ahead of the game, which is what makes sports so exciting.”
