For my birthday this year, my poor, poor wife agreed to accompany me to Bristol, TN for a NASCAR race. The town of Bristol, which actually straddles the border of Virginia and Tennessee, is home the third largest sporting venue in the United States: Bristol Motor Speedway. In NASCAR’s heyday, the Speedway would easily sell out all of its 160,000 seats and the noise level would exceed 140 dB as the unique shape of the stadium actually intensifies the cacophony. We estimated it was about 50% capacity for our race, a sign of sinking attendance that plagues not just auto racing but several other major professional sports leagues as well. 

Outside of NASCAR and Formula 1, my wife and I don’t follow many sports (yes, she likes racing more than she will admit). We watch the occasional football or ice hockey game and the big tennis tournaments from time to time, but that’s about it. And it seems like we are slowly becoming the norm rather than outliers. Disney has been reporting lower revenues from its basket of ESPN channels, TV ratings for major sporting events are generally on the decline, and ticket sales aren’t what they used to be. So what’s going on? The blame is often laid on Millennials for simply not being interested in sports, but that may not be the full story.

Consulting firm McKinsey released an interesting article last October suggesting the problem is not that Millennials don’t follow sports, but that they watch sports in different ways. Rather than sitting down for a full 3-hour football game, Millennials will check Twitter for score updates or quick clips of the exciting plays. They’ll watch recaps on Youtube that condense the game into a 5-minute highlight reel, effectively skipping not only the boring parts of the game but also the ceaseless series of ads for razors and Doritos. They’ll play fantasy football with their friends, the sports version of social media. They’re still invested, but in ways that traditional ratings metrics do not capture accurately. 

There’s also the trend of “cord-cutting,” or eliminating cable television subscriptions in favor of internet-only packages and a-la-carte services like Netflix and Hulu. From this perspective, I do think Millennials (as well as members of other generations who have cut the cord) are less engaged because there simply aren’t many sporting events available to watch without network television or the big cable stations. We cut the cord for about two years, only returning because Cox gave us an offer we couldn’t refuse, and watched very few sporting events during that period of time. I’m not sure why major sports leagues haven’t jumped on “the whole internet thing” sooner, but it seems like they’re all behind the 8-ball when it comes to attracting the cord-cutting crowd. 

I admit the argument is far more nuanced and complex than can be fully captured in a few hundred words on a single page, and I can appreciate that it’s difficult to simultaneously attract the traditional TV fanbase and the younger internet fanbase, but there has to be a way to do it. It’s simple math – make sports more accessible to more people and more people will watch them. 

Benjamin Sadtler, CFA

The above article is for informational and educational purposes only. Neither the information presented nor any opinion expressed constitutes a recommendation or endorsement by Gore Capital Management nor Cantella & Co., Inc. of a specific investment or the purchase or sale of any securities.