The paper presents an industry development model based on the diversification of the sports sector that has been developed following the strategic direction of science and technology innovation. The practical suggestions of optimization are given to perfect and enhance applicability of the model. Based on this platform, the research explores the characteristics of agglomeration and development potential of sports industry diversification of 8 Chinese provinces using the multi-distance spatial clustering algorithm, the nearest-neighbor distance algorithm and factor analysis as the main analytical methods. The results reveal that the spatial clustering of diversified sports industry activities can be quantitatively correlated with the distance to urban centers and between cities, whereas the overall level of such agglomeration increases steadily over time. Under the context of science and technology innovation, the diversified sports production has a special spatial pattern, where the extremes have the highest activities while the middle range is relatively less developed. The provincial ranking of internal potential of sports industry diversification can be broadly aligned to the level of economic development in the province. The demand-side potential, nevertheless, shows significant variations and a high degree of concentration leading to large differences between the extent and depth of diversification and integration possibilities between provinces. The paper ends with the recommendation to implement the five guiding principles of development, innovation, coordination, environmental sustainability, openness, and shared growth, as an actionable model of developing the sports industry. Such a strategy aims to overcome the growing heterogeneity, differentiation and individualism of expectations of different residents in all provinces towards the sport sphere.
