America May Be Closing In On ‘Peak Sports’

America May Be Closing In On ‘Peak Sports’

On the surface, underwhelming domestic interest in the Las Vegas Formula One race, Activision Blizzard’s recent decision to shutter the Overwatch League, and the decline in ManningCast ratings have little to do with one another. But some industry insiders see the developments as being indicative of America encroaching on ‘peak sports’.

“You can see [the bubble] starting to froth,” Rob Johnson (principal, Ventnor Ventures) said.

The sports/esports executive turned venture studio founder believes the top of the cycle will coincide with the 2028 Summer Olympics.

There is going to be “this huge tree of sports [created in the lead up to the LA28]. But where are all the eyeballs coming from? There are only so many hours in the day you can dedicate to entertainment,” Johnson said. “That [imbalance] is going to break [media reliant league business] models…and we don’t even know what media rights will look like in 2030 for the NFL [never mind everyone else].”

In the meantime, Ventnor Ventures is betting valuations across the industry continue to rise and that attractive new business opportunities will emerge.

“It’s crucial to innovate and diversify revenue lines in the increasingly saturated market,” Johnson said. “This represents a pivotal opportunity to redefine sports media and entertainment, leveraging emerging trends and technologies.”

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The march towards ‘peak sports’ in America began in the 1990s.

“The war between cable and satellite for viewers [spurred a sports boom],” Johnson said. “The need [for viewers resulted in] these big media packages. That led to stadiums [being built], and [ultimately] to where we’re at today [with an abundance of sporting events across a multitude of media outlets].”

While the number of sports and sporting events shown on television has risen dramatically over the past three decades, so too have the other entertainment options available to fans (think: Netflix, video games, social media).

As a result, “there are no more hours for [fans] to watch [all] these [games],” Johnson said. “Sports are [being scheduled] on top of one another and time shifting sports is still not a cultural thing.”

Logic suggests viewership will at some point max out in a fragmented and shrinking pay TV universe.

When that happens, “the dollars going in from the advertisers and the media side [will] also peak,” Johnson said.

And thus the model will break (at least for some leagues).

But it’s not just limitations on free time that suggest America may be approaching peak sports. The U.S. population is not growing fast enough to financially support all of the challenger leagues that have emerged or will over the next few years.

“There are 330 million Americans. Maybe there will be 350 million by 2028. That’s not that many more [people and certainly not enough] to facilitate the dollars,” Johnson said.

Bears like Johnson point to the recent developments cited as indications too.

“Everybody put so much hype into [the Las Vegas F1 event]. But anybody who knew the industry could look behind the economics and [tell it would be a relative disappointment]. It’s a 1am Eastern event, 10pm local. Tickets are $1,000 plus. Rooms [were] impossible to get. Everybody had to fly there. It’s not Miami. It’s cold in November at night in Las Vegas. The miscalculations are a microcosm of [what happens during] peak sports.”

Similarly, an abundance of capital poured into non-live rights in the wake of The Last Dance and Drive to Survive’s success.

“We thought [creating multiple broadcasts and behind the scenes documentaries] would be the next big thing,” Johnson said. “Now [with Manningcast ratings down some] are wondering if it’s even worth it.”

Bulls will point to the NWSL’s recent rights increase as an indication there is still room to run. NFL (highest per game viewership in eight years) and college football (+15% YoY) ratings this season further aid their argument.

The good times should roll for the next few years.

“We’re going to be riding high in ’26, ’27, ’28 [leading into the Olympics],” Johnson said. “Investor money is going to be flowing. People are going to be talking about this sport or that sport is going to be the next big thing.”

The excitement and enthusiasm should create some new opportunities–and likely a whole lot of hype cycle-based investment activity.

“Like esports [circa] 2017-2020 or speculative NFTs shortly following,” Johnson said.

It remains a real possibility that come ’28 many sports properties are still trying to figure out how to replace the economics from the old media system, and they’re having to do it against the backdrop of increasing player contracts and expiring labor agreements.

Some will lean into paid subscription products to try and maintain or fuel future growth. Others could look to expand IP into new products and services (see: F1 Arcade, Real Madrid theme park). New revenue streams are certain to emerge too.

“That’s the opportunity within this bubble,” Johnson said. “To reinvent for the 2030s what sports and sports media can be.”

Leagues who can adapt will survive. Many will thrive.

Those who are unable to will begin to encounter operational issues.

You’ll start to hear “we can’t pay our players. We can’t continue to grow our league. This expansion team failed. This new building isn’t full,” Johnson said.

Ultimately, some of these properties will fail.

The half decade leading up to LA28 has the potential to upset the pro sports hierarchy in America.

“Maybe after two Olympic cycles [Premier Lacrosse League] becomes a bigger league,” Johnson said.

While eight years wouldn’t have been enough time for a new league to build a robust fan base decades ago (think: for MLS following the ’96 World Cup), information moves faster today.

“Anything can catch fire at this point in a viral moment or viral existence,” Johnson said.

Improvements in digital viewership measurement may also result in a different narrative in terms of where fandoms lie.

Peak sports may be upon us. But that doesn’t mean there won’t be winners.

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