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Breaking through growth barriers: Strategies for sustainable growth in the sports industry

In the face of growth barriers, prioritising financial sustainability, strategic planning and leadership development are essential for the ongoing success of the sports industry.

03/03/2025 · 4 minute read

The sports industry, a dynamic and evolving sector, faces multiple challenges in today's complex landscape. These challenges range from financial constraints to strategic planning, participation and membership growth and succession and leadership planning. Addressing these barriers is critical for ensuring the sustainability and growth of sporting organisations.

As we explore these growth barriers, it becomes evident that adapting to the new world of work is crucial for the future of the sports industry.

In this article, we explore key trends and issues and share tips on strategies and actions sporting organisations can take to help overcome growth barriers and ensure continued success of the industry.

Financial challenges in the sports sector

In an era where sports are more than just games, the industry finds itself at a crossroads. Financial pressures, evolving workforce dynamics and the changing patterns of consumption are reshaping how sports organisations operate.

Financial stability is crucial for any organisation's success. However, the sports sector faces unique financial challenges exacerbated by the current cost of living crisis. Inflation and rising costs have put additional pressure on sports organisations, which traditionally operate on tighter budgets than their corporate counterparts. Revenues for many sports organisations has not kept pace with inflation rates, increased costs of high performance and higher insurance premiums. The unbudgeted expense makes it challenging to attract and retain top talent and maintain strategic goals.

In this environment, sports organisations are compelled to focus on creative financial strategies to stay afloat. Some are exploring temporary measures like bonuses instead of base salary increases, while others are reallocating budgets to support their workforce's most impacted segments. According to the Mercer 2023 Australian Sports Industry Pulse Survey (Pulse Survey), 64% of organisations are implementing just one reward strategy, while 36% are using two or more strategies.

The changing insurance market appetite for sporting risks, particularly liability, is also having an impact. Specific market restrictions, new emerging risks, claims frequency and severity, and increased premiums are making it more difficult for sports organisations to maintain the transfer of risk into the insurance market for areas such as abuse and molestation, that were historically included as a standard coverage within  a liability policy. This means that sports organisations are facing the choice between self-insuring these risks or exploring alternative risk transfer solutions.

The changing nature of the risk landscape and any premium impacts also pose a significant challenge to the financial operations of sports organisations. Given insurance is a key member benefit, many sports are finding it difficult to maintain member benefits without increasing the cost of registration to pay for access to them.

Strategic planning in sporting organisations

Effective strategic planning is essential for navigating the sports industry's complexities. Governance plays a pivotal role in this process, ensuring that leadership cascades from the board level to the executive and community program levels.

In many national sporting bodies, effective management begins with strong governance at the board level, which then flows through the executive levels and down to those managing community programs. This hierarchical approach ensures that strategic decisions are implemented consistently across the organisation. Changes in leadership significantly impact strategic planning, necessitating a strong connection between all levels of management.

As the sports sector evolves, there is an increased need for workforce agility and investment in marketing capabilities to reimagine brands and attract new audiences.[1] The rise of Esports, in-house video on demand services and the growing influence of social media are also reshaping strategic priorities, driving the need for enhanced digital literacy and technology integration across all levels of the organisation.

Currently, a major challenge for the industry is the changing landscape of how sports are consumed, shifting from traditional TV and media to online streaming and social media platforms like YouTube. Sports that have adapted well are those with effective leadership capable of pivoting content creation and commercial opportunities to digital offerings.

Essentials of sports benefits assessment

Assessing the benefits offered to athletes and employees is crucial for maintaining a motivated and healthy workforce. Organisations should focus on reducing risks such as long-term health issues and ensuring comprehensive well-being programs.

Policies aimed at reducing or mitigating long-term health risks, such as neurological disorders and concussions, are essential. Ensuring that well-being programs are inclusive and align with equity goals is crucial for adapting to the new world of work. This involves creating holistic programs that address both physical and mental health, enhancing the overall employee experience.

For sports who own and run professional leagues, this offering is often done in conjunction with respective players associations (Eg. AFLPA, CA, RUPA, PFA, NRLPA) and subject to workplace agreements. For sports without a professional competition, health and well-being typically would fall under the sporting organisation and guidance from the Australian Sports Commission, however, is often subject to resource constraints. In both instances, the challenge is to create equitable benefits across men’s and women’s sports on limited budgets.

The Pulse Survey highlights the top five strategies to address physical and mental health challenges:

  1. Increasing accessibility of employee assistance programs (84%),
  2. Investing in training and promoting mental health first aid officers (68%),
  3. Campaigns destigmatising mental health (60%),
  4. Designing work with well-being in mind (56%), and
  5. Providing crisis management support (52%).

These strategies underscore the importance of a holistic approach to employee and athlete well-being. Furthermore, sports organisations are increasingly recognising the need to offer flexible work and retirement options to retain experienced talent and ensure a smooth transition for older workers.

Planning succession and leadership in sports organisations

Succession planning and leadership development are critical for the long-term success of sports organisations. Effective leadership ensures continuity and drives strategic initiatives across the organisation.

For the sports industry, it's important to keep an open dialogue. Effective leadership within sporting organisations is demonstrated through a seamless communication and decision-making process that ensures issues flagged by executives are addressed promptly and implemented. This approach maintains organisational stability and achieves strategic goals. The focus on leadership also includes fostering a diverse and inclusive culture, which is essential for driving innovation and engagement at all levels.

There is an increased need to build out a comprehensive diversity, equity and inclusion (DEI) strategy, invest in marketing, brand, public relations and social media capabilities, and ensure leadership is aligned with sustainability goals. Often, financial constraints mean that individual sports may need to prioritise investment in one area over another, which can limit progression.

Additionally, there is a growing emphasis on leadership quality and culture, ensuring leaders are equipped to guide their teams through changing landscapes and emerging challenges.

A key question for organisations is: how can they engage culturally with fans? This issue is critical for success. For example, during the FIFA Women's World Cup, the organisation implemented an active cultural diversity strategy. This included hiring a company to engage local populations from various countries like Colombia, Costa Rica and Germany, in the major cities where the games were held. FIFA’s engagement strategy included making ticket prices affordable and actively communicating match schedules. This strategy proved successful in attracting diverse crowds, even on non-traditional game nights like Mondays or Wednesdays, and led to record attendance and revenue figures for the tournament.

Strategic takeaways

The sports industry is at a pivotal juncture, facing significant growth barriers that require strategic and innovative solutions. Financial constraints, strategic planning challenges, benefits assessment and leadership development are critical areas that need attention.

To navigate these challenges, sports organisations should implement strategies in the following critical areas:

  • Prioritise financial sustainability: Develop innovative funding strategies and optimise resource allocation to balance performance and operational needs.
  • Prioritise governance: Foster strong governance structures and ensure consistent leadership across all levels of the organisation.
  • Focus on comprehensive well-being: Implement inclusive well-being programs that address both physical and mental health challenges.
  • Invest in leadership development: Establish robust succession planning and leadership development programs to ensure organisational continuity.

How we can help

As the sports industry continues to evolve, embracing these strategies will be crucial for overcoming growth barriers and achieving ongoing success. Marsh McLennan are committed to helping sports organisations navigate these complexities by supporting you through your strategic journey. We can help design tailored solutions, provide expert guidance in implementing strategies, reviewing your policies and ensuring your organisation is well-equipped to achieve continued growth and long-term success.

For more information, please contact us to learn about how we can help you thrive in this dynamic industry and support you in achieving your strategic goals and initiatives.

 

[1] Mercer global client projects and research, 2021 COMPPS Benchmarking

Our people

Dean Mumm

Dean Mumm

Pacific Sales Leader, Marsh

  • Australia

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This publication is not intended to be taken as advice regarding any individual situation and should not be relied upon as such. The information contained herein is based on sources we believe reliable, but we make no representation or warranty as to its accuracy. Marsh shall have no obligation to update this publication and shall have no liability to you or any other party arising out of this publication or any matter contained herein. Any statements concerning actuarial, tax, accounting, or legal matters are based solely on our experience as insurance brokers and risk consultants and are not to be relied upon as actuarial, accounting, tax, or legal advice, for which you should consult your own professional advisors. Any modelling, analytics, or projections are subject to inherent uncertainty, and any analysis could be materially affected if any underlying assumptions, conditions, information, or factors are inaccurate or incomplete or should change. Page Compliance ID