Sports consumption is more fragmented and focused on athletes. This opens up opportunities for startups and investors.
The way we look at sport changes. The UEFA football championship, which starts today, and the Olympic Games, from next month, will always bring people together to watch live matches together in a stadium or a bar. But more and more, the way we consume sport is fragmenting.
To start, we look at and play a greater variety of sports. The United States has experienced growing popularity for sports such as Football Drapeau, volleyball – The first season of the Volleyball Professional Federation began this year – and even pickleball. The popularity of women’s football has increased worldwide. It’s not just more women playing, the best women’s teams in Europe have experienced two -digit income in the past year because they attract more fans.
“Ten years ago, there were probably eight in twelve high school sports that people focused on men and women. And now there are all these other activities and teams that develop outside your traditional funnel in high school, “said Chris Traeger, executive director of Boomtown, the accelerator of sports technologies that brings with them decades of ‘Experience in sport and entertainment, told GCV in a recent webinar Move the goal posts: how to invest in a sports world.
Traeger is an investor with decades of experience in sport and helps companies such as Comcast and NBC Universal Find Startups Sports Tech Startups with which to associate.
At the same time, as the number of popular sports increases, the established sports leagues develop to new parts of the world, said Kerry Carter, a former professional player of the NFL and now a capital partner.
“There are huge investments that enter the NBA leagues in Africa. The NFL is developing in new markets around the world, going to markets like Germany and even Mexico. You know, I think the globalization of some of these sports leagues is to see a ton of interest and investment, “he said.
At the same time, we more often look at sports individually and via digital media like YouTube and social media platforms. Generation Z, that is to say that people born between 1997 and 2011, are more likely to look at sports on digital platforms than live, According to a number of studies.
“Increasingly, it becomes social media platforms where people will consume content, talk about their favorite team, publish content from their favorite team,” explains Traeger.
There is also a certain concern that the young generations are Less likely to identify themselves as a sports fans that older generations and are less likely to look at live sports. The average age of high sports viewers such as baseball and NFL is disturbing broadcasters and sports leagues.
“There are trends through all aspects of participation throughout the audience and commitment and marketing with fans,” explains Traeger. “We have recovered these people.”
Reacting these young fans will probably take new tactics that before. Young viewers are more likely to identify with individual athletes than teams, to follow them on social platforms and to seek a more direct relationship with them.
All these changing dynamics have implemented challenges – and opportunities – for startups and sport -related companies wishing to invest in sports innovation. Traeger and Carter were joined on the webinar by Tim Brownstone, a scientist who has become an entrepreneur who builds a startup making fabrics improving the performance that can be used for sportswear. This is what they told us about the opportunities to come.
1. Small brands can pierce without breaking the bank
The proliferation of new sports and new visualization media allows a smaller sports brand or sportswear to break through without having to opt for a very expensive advertising campaign.
“Five years ago, you had to have an advertising campaign of $ 40 million to launch a new brand of consumer clothing or shoes, because all the channels were very expensive and very organized,” said Traeger. Now, a relatively unknown brand, such as the manufacturer of Vuori sportswear, can get a traction by working with an athlete such as Gymnast Livvy Dunn
“It is a brand that no one had heard, a few years ago, which was able to make a fairly decent bump on the market very quickly, without having produced a brilliant television advertisement of $ 2 million.”
An authentic collaboration with an athlete can be much more significant and effective than a big budget announcement, accepts Carter.
“The most important thing that takes place on social networks at the moment: there is nothing between athletes, celebrity, the influencer and this public. They are able to speak directly and to tell you authentically how they feel. These connections they establish give a lot of credibility to any product they put in front of them, ”he says.
“I think people are much more connected to this authenticity right now. This is what makes the needle pass at all levels with regard to new products, new services and things that are marketed in a really authentic way. »»
2. The sports teams are excluded from direct communication with fans and are looking for a means in
While athletes and fans can communicate more directly than ever, sports teams and sports leagues, on the other hand, have been cut off from a legion of intermediaries. No one heads for a stadium to buy a ticket, underlines Traeger. Tickets for games are sold via intermediaries such as Ticketmaster and Stubhub; Food and goods are sold by third parties; And visualization occurs on digital platforms. This means that sports teams are less and less known their fans.
“The sports teams and the leagues want more interaction and more commitment (with fans), more data from the first part. Social media networks are team partners, but they do not often share data, ”explains Traeger.
The trend is not going to disappear, but the teams and the leagues must learn how they can establish their own first party relationships with their fans. Otherwise, he says: “It is a dangerous place so that the teams are where they cannot directly monetize their own fans”.
This is an opportunity for an increasing number of analysis startups.
“There has been a proliferation of analysis companies in the sports area in the past 10 years. Nielsen Sports was a Stop store for the television measure. Now there are a dozen brands that make different versions of media measurement for sport, in different verticals, in consumer engagement, managing and databases. If you are not paying attention to emerging startups in data collection and analysis, and direct marketing and fans’ commitment, then you really miss it because it is an area that must be stronger than ever ”, explains Traeger.
3. Athletes are more precious than before – which means more investment in performance management and well -being.
“Ten years ago, fans’ commitment and fans experienced the perch 100% with regard to sports investments. Recently, the side of athletes’ performance is upwards, “said Brownstone.
The Brownstone startup, Kymira, plays in this trend. The company has developed materials that have infrared emission technology. These can be transformed into sports clothing that captures visible heat and body heat and other forms of energy in the environment and convert it into infrared, pumping it into the muscles of the athlete. Infrared waves create biochemical reactions that make athletes more flexible, increase blood circulation and make them less prone to injury.
Having a star athlete for a season can have a significant impact on a team’s financial performance. When the NBA star LeBron James moved to the Lakers, the secondary selling prices of the Lakers tickets increased by more than 40% – but when he was because of an injury, they would fall again. Sports leagues are important to take care of their players – and are looking for all technologies that can bring them to even higher advanced performance.
“Gain a lot of cure. If (fans) come in this stadium and your team loses each match, you know, it makes it difficult for all the parties concerned, ”explains Carter. “So watching technologies that can improve the performance of the recovery of athletes benefit everyone.”
Look at the full webinar below:
This webinar is part of the next GCV webinaries series. We run a webinar on the second Wednesday of each month, alternating between advice for CVC practitioners and deep dives in specific areas of investment. Our next webinar will be how to structure a venture capital studio to succeed on July 9, 2024. Register here to secure your place.