I’ve invented a new word: SponsTech

I'VE INVENTED A NEW WORD: "SPONSTECH"

By Matthew LeopoldNon Executive Director at European Sponsorship Association

Author: Matthew Leopold, Non Executive Director at European Sponsorship Association

9th of April 2019

FinTech, PropTech, MedTech, SomethingTech - you can't escape it. Innovative technology is booming. Challenger companies are building apps and software to transform traditional industries.

Dependence on traditional models and theories have long been the Achilles' heel of sponsorship. Sure, some of the old fashioned ways of measuring sponsorship have been digitised. But regardless how technologically advanced you are at measuring logo appearances on your TV screen - you can't escape that you are still counting logo appearances on a TV screen.

New Technologies

The tech that caught my eye was the concept of "virtual replacement" sponsorship at The Davis Cup. Sounds like a complex idea, but is actually very simple.

The Davis Cup has invested in technology that can digitally superimpose, in real-time, sponsors’ logos on court-side banners. This technology enables viewers in the USA to see different sponsors from viewers in Asia or Europe. With analytics, bespoke messages could be delivered for individual users.

From global to local. Previously, global sporting events chased sponsorship from global brands. With global budgets and awareness, they tended to be most interested in these events.  However, with this technology, sponsorship can become more targeted and localised.  It puts the customer at the centre.

Sponsorship Needs Relevance

I have written a few times on the vital importance of connection between the property, sponsor and customer. This technology has the ability to make the sponsorship of an event more relevant to more people - this can only be a good thing.

However, I do not think that pitch-side advertising alone can magic-up increased engagement or consideration.  It can increase short term awareness of a brand. The real challenge will be for sponsoring brands to take advantage of this new segmentation and tell their story in a way that resonates and is relevant to the local audience.

The Birth Of An Industry

What should we call this cunning technical innovation? If you can't beat 'em, join 'em. From henceforth, these technologies shall be known as "SponsTech". I'm sure you didn't see that coming.Learn how to identify and capitalise on new sponsorship tech! Join sponsorship experts at the Money In Sport Sponsorship & Partnership Summit.

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Fundraising in Sport

Philanthropy – A new revenue stream for Australian sport

PHILANTHROPY: A NEW REVENUE STREAM

HOW CAN YOUR ORGANISATION CAPITALISE?

In the last four years, the Australian Sports Foundation has raised around $150m for Australian sport. However, sport still receives less than 1% of tax deductible donations in this country. Philanthropic investment in sport can have a profound impact – not just on the physical and mental health of our people, but also on the overall wellbeing of Australian communities – and the Australian Sports Foundation is committed to changing this.

PHILANTHROPY: A NEW REVENUE STREAM FOR AUSTRALIAN SPORT

Sport is part of the Aussie DNA and is central to our nation’s culture. It is at the heart of every community, and brings people from different backgrounds and cultures together in a way that nothing else can. Perhaps above all, it promotes active healthy lifestyles, and inspires our young people to believe that they too can pursue their dreams. Despite these huge social and community benefits, sport has lagged behind other causes in tapping into the philanthropic dollar.

In recent years, the Australian Sports Foundation has been working with sport at all levels to change this – with dramatic results; donations to sport have grown from $17m a year to $45m – but even this represents less than 1% of all money donated in Australia each year, and is well behind the $300m a year that arts and cultural organisations raise from this source, so there is a huge opportunity for further growth.

INCREASED COMPETITION FOR FUNDING

Current trends in sport are creating a more competitive environment for clubs and organisations looking to secure funding. The rapid growth in women's and girl's sport places pressure on existing infrastructure and facilities, and means that clubs and organisations need to be more innovative in their approach to secure funding. 

Developing a fundraising strategy as part of your organisations overall business model will ensure you are not relying too heavily on competitive external sources for funding.

PANEL DISCUSSION: PHILANTHROPIC OPPORTUNITIES

Australian Rugby Foundation
Peter Murphy

Executive Director at Australian Rugby Foundation
Brisbane Broncos
Matthew Lang

Fundraising Manager at Brisbane Broncos

Peter Murphy and Matthew Lang spoke at Money In Sport 2018 on a panel discussion focusing on the opportunities that philanthropy presents to sporting organisations at all levels, and how this can be implemented as new revenue streams. 

How sport can incorporate fundraising into existing operations:

Sports organisations are continuously looking for new revenue streams, but many have yet to recognise how tax-deductible fundraising can contribute significantly to the bottom line. And donations are not limited to cash, but also to equipment and goods.

Tax-deductible fundraising can be successfully achieve at any level – elite, state, district and at grassroots. National and state representative athletes can also fundraise via the Sports Foundation for coaching, travel, equipment and medical costs.

Opportunity that the philanthropic market in Australia presents for sport:

Around $3 billion is donated to tax-deductible causes every year. In 2017-18, $44.7 million was raised for sport via the Australian Sports Foundation which means sport is receiving just 1.3% of the philanthropic market. However, arts and culture raises $300 million every year.

Given Australians love of sport, how sport is a key part of every community throughout Australia, together with the health, social and community benefits sport provides, there is a great opportunity for sport to raise similar or more money than arts and culture every year via tax-deductible fundraising.

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Blockchain Technology & Sport

Fuel Games: Pioneering Blockchain & Esports

THE WORLD'S FIRST BLOCKCHAIN BASED ESPORT

CO-FOUNDERS OF FUEL GAMES JOIN MONEY IN SPORT 2018

30 October 2018

Money In Sport is delighted to announce that the Co-Founders of Fuel Games, James and Robbie Ferguson, will be speaking at the 2018 Money In Sport Conference. 

The Australian brothers, James and Robbie Ferguson, have been generating a huge amount of media attention worldwide after a hugely successful pre-sale event. Their innovative technology not only has huge potential for esports, but could lead the way to turn the blockchain into something much more real for a number of industries where traditional assets could be represented by digital tokens. 

FUEL GAMES

Fuel Games is a blockchain technology firm pioneering true ownership of digital assets in video games, backed by leading companies such as Coinbase. Its in-house flagship game, Gods Unchained, has had the most successful pre-sale out of any blockchain game, with Forbes calling it “the world’s first blockchain-based esport”.

A unique item within the game auctioned for $62,000 USD in August this year. They’re working on exciting announcements to partner with large gaming studios, esports leagues and traditional sports IP owners in order to create true ownership of digital collectibles and assets.

WORLDWIDE MEDIA ATTENTION

The brothers have generated a huge amount of attention around the pre-sale of Gods Unchained. This attention has not only come from within the blockchain and esports communities, which are similar in demographics, but has crossed over to mainstream media with articles in The Financial Review, Forbes and Venture Beat to name a few. 
As featured in The Financial Review
The pair have attracted $2.4 million in funding for their venture, with Continue Capital and Nirvana Capital leading the seed round, which also had participation from Sora Ventures and Coinbase.

- Financial Review | July 9, 2018
As featured in Forbes
We decided to build Gods Unchained because we felt based on what we had learned that we could provide a high-quality competitive gaming experience to actually show the disruptive benefits of the technology.

- Forbes | July 16, 2018
As featured in Venture Beat
All sorts of assets are going to end up being represented as digital tokens on the Ethereum blockchain or other blockchains like it. Traditional assets like securities, stocks, bonds, debt instruments, software licenses, and video game items will be sold through blockchain tokens.

- Venture Beat | September 24, 2018
As featured in Coin Desk
Down the line, some investors believe that NFTs enable use cases far more valuable and consequential than gaming: real estate, precious metals and other assets could be tokenized, enabling investors to buy smaller, more liquid stakes in these assets.

- CoinBase | August 24, 2018

CRACKING THE CODE: Blockchain TECHNOLOGY & SPORT

Money In Sport 2018: Day One, 10:45am 

James and Robbie Ferguson discussed the future potential of blockchain technology in esports, and how this is breaking into mainstream sport. Watch their full session from Money In Sport 2018 below.
Co-Founder at Fuel Games

JAMES FERGUSON

CEO & Co-Founder at Fuel Games

James co-founded Fuel Games with his brother Robbie. For their first title they built Etherbots, an on-chain, multiplayer strategy game which broke the record for the largest pre-sale for a blockchain game. 

Fuel Games has grown to more than 20 employees, and their new title Gods Unchained is the first console quality game that runs on the blockchain, having made over $3M revenue in three months.
COO & Co-Founder at Fuel Games

ROBBIE FERGUSON

COO & Co-Founder at Fuel Games

Robbie co-founded Fuel Games with his brother James. Robbie led the blockchain development of Etherbots, architecting and developing both the provably fair smart contracts and the User Experience for interacting with them.

Robbie also designed the marketing campaigns which led to sold out sales and both games breaking the records for the most successful blockchain game sales.

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Engaging & Connecting With Millennial Sport Fans

MILLENNIAL SPORT FANS

ENGAGING A NEW GENERATION

09 October 2018

Millennial marketing is something that all brands are striving to perfect, but many are using out-dated strategies that do little to connect or engage with consumers in this key demographic (those born between the early to mid 1980s and 2000).

Less Viewers, But More Fans Than Ever

Millennials are seen by many brands to be a hugely lucrative market. They are the highest spending demographic, the second largest generational group, highly engaged online and can also be very loyal customers. But there is a growing concern that Millennials are engaging less and less with sport and sport-related content as major sports around the world see younger viewers tuning out. 

But this doesn't mean that Millennials aren't just as mad about sports as older generations; in fact it's almost the opposite. Millennials are just as passionate about sport as older generations, the thing that's changing is how they consume sport. 

The Fans Are Still There, Brands Just Need New Ways To Engage Them

Television ratings for the NFL 2016-17 season declined 9% for Millennials. While in the same year, the number of Millennials actually watching the NFL increased. Similar trends can be seen across all major American sports.

This is enough to show that sport fans are just as thirsty as ever for content, we just need new ways to engage them.

Traditional strategies, traditional media and traditional content isn't connecting with this audience. But labelling Millennials as just 'digital consumers' is looking at it too simplistically. 

Where Are These Millennial Sport Fans?

One mistake most brands and marketers make is thinking that Millennials are the only ones online. This isn't true, in fact older generations (particularly Gen X fans) spend just as much time as Millennials checking scores and watching highlights on apps and websites.

The key difference is in streaming live sport (both legally and illegally) and their use of social media for sport content. Research from McKinsey shows that Millennials spend twice as much time streaming sport online compared to Gen X, and significantly more follow sports on social media - particularly Instagram, Snapchat and Twitter. But Facebook still leads the way here and is widely used by consumers of all ages. 
ESports now key for engaging Millennials
Esports Now Key To Engaging Younger Millennials

The average age of the Australian esports fan is 26, older than you might have thought, but also right in the middle of the Millennial demographic. In fact, Millennials make up 66% of all esports fans. With a global economy predicted to be worth around $1.49 billion USD in 2020, esports is no longer a niche audience. 

Despite a common belief that the esports audience is completely anti-advertising, the most recent research by Nielsen actually shows that fans are open to brand partnerships and see it as way of engaging with and considering new brands - as long as they are relevant. 

Millennial Marketing At Money In Sport

Money In Sport will feature speakers who are experts in influencer marketing, content creation and engaging millennials across different platforms, providing exclusive insights on how your brand can create meaningful engagement with this demographic.

Esports also presents a huge opportunity for brands to engage with younger Millennials. Money In Sport 2018 will be focusing on how brands and organisations can monetise esports and start connecting with this demographic.

CONFERENCE SESSION:

CONTENT FOR THE NEW GENERATION

Day One: Money In Sport 2018

How will your organisation engage and connect with a new generation of fans? View the whole session from Money In Sport 2018 below. 

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Marvel Stadium

Marvel Stadium: How Disney plan on creating a unique, experiential destination

MARVEL STADIUM

How Disney plan on creating a unique, experiential destination

20 August 2018

Having a logo splashed across a stadium is no longer the driving force for brands to be involved in naming rights sponsorships of sports and entertainment venues. 

In Canada, Scotiabank paid over $600 million USD for the naming rights of Scotiabank Arena until 2038. 

In the USA, MetLife Stadium will cost the life insurance company in excess of $400 million USD over the course of their 25 year sponsorship deal at the NFL stadium in New Jersey.

According to recent news reports, Football powerhouse Barcelona are searching for a naming rights sponsor for their iconic Nou Camp stadium. The asking price? A cool $479 million USD.

So the question is, what is the value in naming rights sponsorships of stadiums? In 2018, this investment means having access to fans and direct contact with them through the match day experience, tailoring specific campaigns and offers for the audience.

It's All About Access & Fan Interaction

This access & interaction to fans allows a brand to engage with the consumer and turn them into customers of their own.

Using all of the latest technology and data management systems, brands and stadiums can capitalise on unique activations by improving the fan experience and ultimately bringing more people through the door benefits both the stadiums and the naming rights partner.

We are now bearing witness to one of the most unique and creative stadium sponsorship deals of recent times, Disney Australia taking the naming rights of Melbourne's multi-purpose Docklands stadium which will be known as Marvel Stadium.

DISNEY AT MONEY IN SPORT 2018

Bringing together one of the world’s leading entertainment brands with Australia’s premier stadium to create a unique, experiential lifestyle destination.

Kylie Watson-Wheeler, Senior Vice President & Managing Director at the Walt Disney Company Australia & New Zealand, spoke exclusively at Money In Sport 2018 about The Marvel Stadium agreement - Watch Kylie's keynote presentation below.

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LaLiga in Asia: A different ball game

LaLiga In Asia

A different ball game

19 July 2018
Ivan Codina, LaLiga
Ivan Codina | LaLiga

Money In Sport is excited to announce a huge addition to this year's conference, Ivan Codina, Managing Director - SEA, Australia, South Korea & Japan at LaLiga. 

Ivan has over 15 years of experience in the sports industry, with the past 9 years being in Asia. After succeeding in roles for FC Barcelona and Sport SG as well as agencies such as Dentsu and Red Card, Ivan currently heads the regional office for SEA, Australia, Japan and South Korea at LaLiga. 

LALIGA AT MONEY IN SPORT

Ivan will lead the expose on stage at Money In Sport, which will be focusing on LaLiga's strategy in APAC:

"An insider view at how LaLiga approaches fans of the beautiful game in APAC, the multi-faceted "Glocal" strategy in reaching a hugely diverse region, and adapting to new consumption behaviours.  Join LaLiga as we discuss how we understand and aim to overcome the challenges of the region."

Watch Ivan Codina's full keynote presentation from Money In Sport below.

GROWTH OF LALIGA IN APAC

In an effort to expand the league beyond Real Madrid and Barcelona, league President Javier Tebas has a focus on expanding LaLiga and pushing the brand into new markets. Asia is one key market that presents huge potential growth for the league as a whole.

LaLiga has set a target of doubling viewership in Asia by 2020. Since 2016, the league has seen a 25% increase in viewership across the region and opened new offices throughout Asia to capitalise on what many leagues see as a huge growth area.

In the past, individual clubs (largely Real Madrid and Barcelona) have sold their International TV rights individually, compared to the EPL which has been selling International TV rights collectively since 1992 allowing the EPL brand to help grow the profiles of smaller clubs. To improve the brand, the league is investing heavily in improving the product through innovative camera angles, 360-degree replays, improved stadiums and better production quality. 

A key aspect of LaLiga's strategy for growth in Asia has also involved restructuring schedules to suit the Asian live market. There are now 5-7 live games per week that are broadcast at decent times across Asia, allowing viewers in the region to experience live content. While these schedule changes surprised Spanish fans at first, stadium attendances in Spain rose by 12%, benefiting the league at home as well as in Asia. 

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Can brand Cricket survive the ball tampering crisis?

Can brand cricket survive the ball tampering crisis

By Andrew Baxter, Marketing & Communications Advisor

11 July, 2018

According to AFR Weekend’s Top 50 Australian sports earners last year, David Warner and Steve Smith earned just over A$8m between them. It was from a combination of their Australian contracts, IPL contracts and brand endorsements. After the infamous Cape Town ball-tampering incident, they’ll earn next to nothing over the ensuing 12 months, as their playing contracts have been suspended and their endorsement contracts annulled.

They’ve also lost their personal brand reputations. And Cricket Australia’s brand has taken a hit too. Subsequently they too have an income issue, with major sponsor Magellan walking away from a 3 year A$24m sponsorship deal.

The question is, can the players’ and the organisation’s brand reputation be restored, and in turn once again attract major sponsors?

Brands live in the hearts and minds of people. And there is a strong underlying emotional connection Australians already have with our cricket team.

Brands, like people, have a history of being forgiven for making one mistake, but not for making the same mistake multiple times. Consumers forgave Apple after their 2010 iPhone4 issues. They eventually also forgave Vodafone for their 2011 Vodafail. And Qantas took only two years to restore their brand reputation measures after the 2011 strike.

In sport, other perceived cheating incidents like Melbourne Storm’s 2010 salary cap rort and Essendon and Cronulla’s peptide programs have also been overcome in three to five years from a brand reputation point of view. Again they proved to be one offs, albeit big ones.

It provides a window of hope for Steve Smith, Cameron Bancroft and Cricket Australia.

It was Swimming Australia that has never quite returned to their brand reputational heights, after multiple disciplinary issues including repeated Stilnox incidents. Like cricket’s current ball-tampering crisis, the root cause was put down to leadership and cultural problems within the team.

It’s a familiar story in politics, with the Liberal and Labor parties enduring multiple controversies in the last decade that have negatively affected their brand, with few signs of a reputational turnaround led by forgiving voters. It’s this scenario that is the problem for David Warner. In 2013 he went through Twitter wars with journalists, the Joe Root punch, and his failure to turn up to a grade cricket match. And now in 2018 the staircase incident with Quenton de Kock and the ball-tampering. It’s a long list for fans and sponsors to forgive, and a long way for his personal brand to recover from.

The key to restoring the brand reputation of a person, company or organisation is to understand that brands are built on four dimensions. First, how different the brand is. For example, Vegemite is very different from other food brands. Second, how relevant a brand is to people. Chanel is relevant to only a small group of people, whereas Woolworths is relevant to everybody. Third is the perceived quality and popularity of a brand. Even if you’ve never driven a Holden, you have an opinion on how good their cars are. Finally, how much people know and understand a brand. Most Australians know that Qantas has a white kangaroo on the tail and has a great safety record.

After the salary cap issue, Melbourne Storm focused on the latter two dimensions – improving the quality of its brand and giving people a deeper understanding of their brand. The highlights were transparency, honesty, leadership, a strong sense of community, respectfulness, and hard work both on and off the field. The team walked before they talked. Craig Bellamy and Cameron Smith became leaders to admire via their actions. When their major sponsor left, they replaced the sponsor’s logo on their guernseys with a different charity each week. They made sure the salary cap issue was a one-off. In turn the brand was restored in three years.

There are good lessons to be learned for Cricket Australia, Steve Smith, Cameron Bancroft and David Warner. Already Smith in particular has followed the transparent and honest path; his raw and real self.

For sponsors, the most basic endorsements are the easiest to rationalise at this time. The brands with the clear links to the cricketer or the cricketing body. Cricket bat companies. Sports clothing and footwear brands. It’s the brands who have chosen the cricketers or Cricket Australia for their shared values that will be more at risk. Family brands like KFC, BUPA, Commonwealth Bank and Toyota. Brands like Qantas who Alan Joyce reminded us share that “significance of a fair go” with the Australian cricket team. These inconsistent values were the reason Magellan’s CEO gave for terminating their partnership with Cricket Australia.

It’s been a tough week for our cricketers and Cricket Australia, but there are brand lessons from the past that can guide them to a positive longer term outcome.

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The massive global growth of esports

THE GROWTH OF ESPORTS

AN INDUSTRY WORTH $1.49 BILLION

MASSIVE GLOBAL GROWTH CONTINUES

In 2016, Money In Sport first showcased the esports phenomenon to the Australian sport industry. The showcase captured the attention of Delegates with incredible figures on the growth of both audiences and revenue, figures which were accurately predicted years in advance.

Money In Sport 2018 will continue to predict the future trends in sport this November.

GLOBAL AUDIENCE BY 2020

The esports global audience is set to continue its rapid growth over the next few years.

A predicted global audience of 589 million viewers and an economy worth around $1.49 billion USD in 2020 means esports is poised to shift from a niche audience and enter the mainstream.

MONEY IN SPORT - ALWAYS AHEAD OF THE CURVE

The huge opportunities and growth in esports were presented live on stage at the Money In Sport Conference in 2016, along with Virtual Reality, Connected Stadiums and Data Focused Sport - topics that are now at the forefront of the sport industry.

With a proven track record of bringing some of the most pertinent topics to life on stage, the Money In Sport Conference consistently provides Delegates with in-depth analysis of the latest trends in sport.

MONEY IN SPORT

30 April 2018
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The Business Of Sports

THE BUSINESS OF SPORTS

JOEY BRANDERPRESIDENT - FIRST SERVE PARTNERS
By Alan Wink, Waylon Chin, Brian Bernstein, Joey Brander. Edited by Sebastian Gomez Puerto.
Article originally written for Miami Venture Capital Association.

Private Equity investors have made personal investments in sports franchises in major leagues around the globe. These unique investments provide bragging rights, entertainment, and, in some cases, a sizable return. Most private equity veterans view these teams as underperforming assets and believe that they can enhance the organization’s value given their business acumen and strong ties to the community. Rarely is a fund the lead investor in any deal involving a professional sports team. Instead, they invest in other parts of the capital structure, including mezzanine debt or preferred stock. Investing in sports franchises does have a considerable level of risk. For an investment to be successful, all of the stars need to line up – it must be the right team, the right market and the right terms and conditions.

MAJOR LEAGUE TEAMS ARE BIG BUSINESS

Today, sports teams and the leagues are big businesses. The National Football League brought in $13B in revenue in 2015/2016 and was followed by Major League Baseball with $9.5B, the English Premier League with $5.3B, and the National Basketball Association with $4.8B. In 2016, the most valuable sports franchise was the Dallas Cowboys, valued at $4B. The next two teams on the list were two soccer clubs, Real Madrid and FC Barcelona, valued at $3.65B and $3.55B, respectively. 
Major League Baseball Stadium

SPORTS TECHNOLOGY VENTURE CAPITAL IS BOOMING

Even if you do not have a billion dollars to invest in a team, there are other ways to invest in the business of sports. Investments in the sports tech ecosystem by venture capital is booming. Since 2012, investments in sports related startups have been growing nearly 30% year over year. In 2015 alone, investors put over $1B into sports related startups and this pace of investment is accelerating. 

Technology in sports is dramatically changing how athletes train for competition, how fans view sporting events and the way that fans engage with their favorite teams and players.

DISRUPTION AND INNOVATION THROUGH TECH

Sports is far more than a niche leisure activity. The annual global spend across all sports consumption is $145 billion. Globally, there is an incredible appetite for all things sports and for sports related content. For the major networks, dollars allocated exclusively to sports programming have tripled. From a social media perspective 60% of Twitter’s traffic is sports related. Vast technological improvements in how sports are viewed in the home coupled with high prices for live sports entertainment have even resulted in many teams and leagues experiencing attendance issues. Thus, teams and leagues need to continually innovate and embrace new technologies to create a more engaging live experience for their fans.

JOEY BRANDER

27 April 2018
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The annual global spend across all sports consumption is $145 billion. Globally, there is an incredible appetite for all things sports and for sports related content.
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THE EVOLVING SPORTS TECH ECOSYSTEM

Sports is a global industry and quickly becoming one of the most intriguing markets for venture investing. From wearable devices, to gaming, fan engagement technology, smart arenas, and fantasy sports leagues; sports tech is changing the ways that people compete, consume and engage with sports. Investor dollars are being put into innovations in stadium technology, customer (fan) relationship management, digital content, and analytics on athlete performance.  Here is a common breakdown of the sports technology ecosystem:

  • Analytics  – both for athletes and fan engagement
  • eSports – professional competitive gaming leagues/teams, events, and content platforms
  • Wearables – used by athletes (both competitive and recreational) to improve performance
  • Virtual/Augmented Reality – changing how live sports are viewed at home and in the arena
  • Drone Technology – competitive leagues and action photography
  • Media – Mobile content, athlete-founded media companies, streaming
  • eCommerce/ticketing –models for maximizing the B2C market
  • Fantasy sports – platforms for fantasy sports leagues
WHAT MAKES SPORTS TECHNOLOGY SUCH AN ATTRACTIVE AREA TO INVESTORS?

The sports industry in the United States alone is projected to reach $75B by 2019. Sports fans are some of the most passionate consumers in any industry, and spend long hours and significant dollars following their favorite teams and athletes. As a result, technology that allows fans to more easily engage with the teams and athletes they love comes with an automatic user base and high retention rates. In the sports industry, the customer is easily identified, extremely loyal, and  willing to spend money to support their passions. 

THE RISE OF ESPORTS

One of the most significant revolutions in the sports industry is the rapid growth of eSports, or professional gaming, which is expected to reach two-and-a-half billion dollars in revenue in the next two years. 

Viewership, consumption, and event attendance have continued to rise at unprecedented rates.  Over two weekends, the 2017 IEM World Championship in Poland drew 173,000 fans to the stadium and surrounding festival. It accrued 46 million unique viewers watching online.

In 2016, the League of Legends World Championship saw 43 million unique viewers, more than 12 million more than Game 7 of the NBA Finals that same year. A 2017 study found that males between 18-25 in the United States prefer viewing eSports over traditional sports, and eSports came in second overall in preferred media behind only movies. 

eSports streaming site Twitch has seen tremendous viewership as fans continue to seek an ever growing amount of gaming content. In January 2018, 962,000 was the average viewership on Twitch, meaning that nearly a million people were viewing content on the service at any given time putting them on par with major broadcast outlets such as CNN, MSNBC, and ESPN. In total, Twitch reports over 15 million daily active viewers that spend 106 minutes daily watching live gaming. 

eSports athletes have started to gain international recognition and following comparable to professional athletes across other sports, with many listing millions of social media followers and bringing in six-figures in endorsement deals annually.

Similar to traditional sports, technologies to analyze eSports performance, engage fans in the arena, and train these athletes more effectively have been created.

PRO ATHLETES AS ENTREPRENEUR AND VC

Sports focused venture capital has attracted many celebrity investors, including professional athletes themselves. These athletes understand how technology can be applied to their craft, and can provide startups with true strategic value, such as brand power/recognition and access to millions of potential customers via social media.

PRO ATHLETES TAKE OVER THE SPORTS MEDIA BUSINESS

Leveraging their personal footprint and star power, pro athletes have moved beyond being limited partners in VC funds and companies, and are now directing investments themselves. The trend started with athletes like Kobe Bryant becoming the GP in VC platforms, and evolved into direct founders of content platforms. Notable examples include, Derek Jeter’s The Players Tribune, LeBron James (SpringHill Entertainment/Uninterrupted), Kevin Durant (Thirty Five Media), and Tom Brady (Religion of Sports). They have found a winning formula in monetizing their extensive fan bases with original content. 

CLOSING THOUGHTS

As the business of sports continues to grow, the sports technology space is becoming an increasingly intriguing market for investment. New innovations are changing everything from how athletes train to how sport content is consumed, viewed, and analyzed. The bottom line is as follows, if you make capital allocation decisions as an angel or venture investor, you need to consider an exposure to the sports tech sector. It is one of the world’s fastest growing industries, with material disruption happening today, and a real possibility of asymmetric upside reward. 

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