Two years ago, as the world was starting to see the light at the end of the Covid tunnel, the head of governance at UK Sport warned national governing bodies (NGBs) that their future was going to be even more challenged after the pandemic.
“At the macro level are declining financial revenues, limited financial reserves and no obvious way out of reliance on public funding,” Robert Morini said at the Westminster Media Forum.
“There is huge complexity in running and innovating public sport with limited resources, competing priorities and pressures, including from public funding bodies,” he added. “[There are] increasing responsibilities and overheads, some significant challenges at governance level, as well as the need to continuously attract diverse skills.”
Through our partnership with Unofficial Partner, PTI have been talking about the Squeezed Middle – the group of sports rights-holders who, in the tough economic climate, need to choose between competing on either quality or price – and as a result are seeing their commercial models challenged.
The vast majority of NGBs in the UK exist in the Squeezed Middle. From athletics to archery, rowing to rhythmic gymnastics, the NGBs for these sports exist, typically, to be custodians of their sport, creating and supporting gold medal-winning elite athletes; controlling and regulating rules; growing participation; and driving revenues that support all those activities.
And with less than 12 months to go until the Olympic Games in Paris, the current period should be one of huge opportunity for NGBs, as sports fans in the UK are drawn to athletes in sports who will be gearing up to their moment in the spotlight that comes around only once every four years.
Instead, as Morini warned, most are significantly challenged and tasked instead with just trying to keep afloat. UK Athletics is currently on teetering on the brink of bankruptcy. British Basketball Federation chairman Chris Grant said his organisation is so lacking in resources it cannot employ a single person full-time. British Gymnastics chair Mike Darcey admitted the governing body is “ill-equipped” to deal with the fallout of the investigation into abuse within the sport, which has seen it lose sponsors as a direct result.
Like many other sports rights-holders, almost all NGBs have been operating the same commercial model they had at the turn of the millennium and have failed to create one fit for the digital age, built around the needs of the large audiences they serve – which in athletics for example, could be as simple as anyone with any interest in running. Millions and millions of people.
Instead, thanks to the comfort of a regular income from UK Sport (to support high-performance activities) and Sport England (to support grassroots activities), most NGBs have become reliant on the public purse. And with inflation running at record levels, that’s one of the last places you want your destiny to be controlled.
Whilst we agree with much of Morini’s assessment we differ in that we can see a way to wean NGBs off public funding, but it will require a completely different mindset to drive a commercial model that is able to connect with and service these millions every day of the year, regardless of where they are at in their major event cycle. In our mind, rather than the typical quadrennial being silent for 80% of the time (and then a deluge of activity in the months preceding a major event), we see the major event as a platform for promoting, accelerating and rewarding activity that goes on throughout the rest of the cycle. This is the equivalent of the 80 vs 10,000 minute rugby model we discussed in episode 1.
Our second podcast with British Cycling’s new CEO Jon Dutton discusses this in reference to cycling’s large and varied audience, all the way from the elites at the top to recreational cyclists, many of whom have found cycling more accessible thanks to electric bikes. British Cycling already has a large membership offering cyclists a comprehensive insurance for the bikes and themselves – but what’s the commercial strategy beyond a membership fee for this highly-engaged, known and owned audience?
And how can less-diehard members of the British Cycling audience be engaged in a similar way?
These are big questions with no easy and simple solutions, but British Cycling and other NGBs are already tackling them. Because if they don’t, they are facing an existential crisis – and for a country that sees the benefits of an active society and is inspired by athletes winning golds in the biggest sporting event on earth, the potential consequences aren’t worth thinking about.
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NOTES FOR EDITORS/FURTHER INFO
PTI is a strategy and technology consultancy specialising in sports and entertainment. Its Digital Transformation Pyramid is unique in the industry, providing an end-to-end approach from strategy to execution across the entire technology stack. In focussing on driving long-term cost efficiencies and revenue generation we aim to enable our clients to create more sustainable, more profitable businesses.