It might be hard to believe, but it wasn’t all that long ago that the sports industry was still apprehensive about emerging technologies.
In a realm now infiltrated by mobile video streaming, virtual broadcast enhancements, artificial intelligence (AI) and almost everything in between, it’s difficult to comprehend a time when sports weren’t pining for groundbreaking ways to present themselves and get ahead of the curve.
The problem then, though, was the unknown. The business of sport had been built on a foundation of linear television deals, paper tickets, and sponsors who were happy with a handful of pitchside advertising hoardings to go with an attractive hospitality package. Anything that broke away from those norms wasn’t only viewed with caution, but as a potential threat that could upset the traditions that had satisfied fans and underpinned the growth of the industry for so long.
As time has taught, however, those that don’t adapt are likely to get left behind. It is for that very reason that the likes of ESPN and the International Olympic Committee (IOC) now have their own over-the-top (OTT) streaming platforms, Premier League champions Manchester City have an esports team in China, and the National Basketball Association (NBA) has incorporated virtual reality (VR) into its broadcasts on Turner Sports.
And as the adoption of new innovations continues to take shape, so too does an ecosystem of incubators connecting sports teams, federations and leagues with an array of startups laying their claim to the latest game-changing technology. The key decision-makers are increasingly treating sport as an entertainment business, and the ultimate aim for accelerator programmes is to help leaders from the sports industry establish relationships with early-stage ventures that can create new experiences for those both participating in and watching sport.
One organisation already setting the pace is R/GA Ventures, an innovation and investment arm established in 2013 by New York-based marketing agency R/GA. The company has run as many as 14 venture programmes across a number of verticals over the past five years, but for Stephen Plumlee (pictured, left), R/GA’s global chief operating officer and managing partner at R/GA Ventures, the sports industry is one still waking up to the rewards of investing in the future of technology.
“We did our first sports accelerator programme back in 2015, and we were really the first programme of our kind, of substantial investment and accelerator structure, and that kept growing at that time,” begins Plumlee. “There were far fewer venture funds dedicated to sports technology, far fewer of the teams or leagues were focused on sports technology innovation, and what we’ve seen over the last three or four years is exactly all of those things happening.
“There are now a number of sports programmes and accelerator or incubator or innovation programmes focused around startups. There are a number of dedicated venture funds for sports or sports media and there are many more individual teams that either have in-house innovation teams or are actively thinking about innovation and experimenting with pilots around startups. You will see that momentum continuing and even accelerating over the next couple of years.”
Much of that momentum is being carried by individual sports teams and leagues themselves, which are taking significant steps towards owning the technology they use instead of simply licensing it, which has long been common practice across the sports industry. Last year, for example, the NBA – already viewed as one of sport’s more forward-thinking organisations – partnered with Intel Capital to invest in startups that could specifically improve the league’s on-court product, as well as enhance the overall experience for fans attending games.
We structure a programme around the business objectives of the partner, and helping them understand why we think engaging with startups can help them achieve those objectives
Stephen Plumlee, R/GA global chief operating officer and managing partner at R/GA Ventures
Already this year, Premier League side Arsenal have invested in sports content-focused e-commerce company I Like That through their Innovation Lab, which was set up in 2017 to help young companies develop and scale their business. Elsewhere, Maple Leaf Sports and Entertainment (MLSE), the owners of Toronto’s Maple Leafs and Raptors franchises, among other properties, announced the first six startups for its Future of Sport Lab incubator.
R/GA, meanwhile, runs one of the better known accelerator programmes – Global Sports Venture Studio (GSVS) – in partnership with Major League Baseball’s (MLB) Los Angeles Dodgers. That particular venture, which launched last year as an expansion of the collaboration signed by the two parties back in 2015, counts the likes of Uefa, the National Hockey League (NHL) and US broadcaster Fox Sports among its founding partners, and focuses on topics ranging from data optimisation and media rights, to the future of retail, sports betting, and next-generation content platforms.
Another founding member of GSVS is Major League Soccer (MLS), which in 2018 agreed a partnership of its own with R/GA to identify startups that can help the league meet the needs of its predominantly millennial fanbase specifically through improvements around on-field data, content creation and player development.
Perhaps unsurprisingly, different sports organisations are keen to innovate in different areas, but Plumlee is quick to point out that R/GA’s approach remains steadfast regardless of each partner’s objectives.
Our programmes are essentially a form of extensive due diligence
“For the most part it’s similar in that we structure a programme around the business objectives of the partner, and helping them understand why we think engaging with startups can help them achieve those objectives,” he explains. “At the beginning of any programme we spend a lot of time thinking about that strategically, and then we start breaking that down into areas of interest, whether that be play-off innovation, fan experience, media, betting or esports, and that’s how we map out our search process for startups.
“So in that respect, what we’re doing with MLS and what we’re doing with the Dodgers shares that in common, and what the specific objective might be could be different between those two organisations or many individual organisations.”
Though he stops short of describing programmes like GSVS as ‘try before you buy’ initiatives, Plumlee says sports organisations that sign up to the studio are making a relatively risk-free investment in order to benefit from R/GA Ventures’ “creative capital”.
“What we mean by that,” he continues, “is all the skill-sets of our agency, which is everything from strategy, to data, to technology, to digital design and branding etc. Any of those skill-sets can support what we call the ‘engagements’ between the startups and the corporate partners that we work with. So that’s the measure that we work through, and we see that as something that works not just in sports but across all verticals when it comes to innovation through the lens of startups.
“Our programmes are essentially a form of extensive due diligence that we do with the startups, and that’s business due diligence, but it’s also technology due diligence – it’s also due diligence around the emerging consumer behaviour that this company is addressing. So we do a lot of that work for the corporates and for the partners, and what that does is de-risk the whole innovation exercise for the partners.”
That due diligence, adds Plumlee, is essential for venture funds like R/GA to implement. Given the volatile nature of the startup game, it’s important to ensure that the companies R/GA chooses for incubation are ones that can directly benefit its partners, which means carrying out an extensive screening process.
“Because we do make investments and because we’re looking for actionable pilots and outcomes, the initial criteria screen is similar to what any investor or programme would be,” Plumlee explains. “Is this a good idea? What’s the market? How can it scale? Is it the right thing to execute? So we have an initial set of criteria which is very common to many investors.
“Then what we do is layer on top of that the filter of which programme we are thinking about, what the business objectives of that programme are, and whether the startup fits into that profile, and then whether they can engage productively in some kind of pilot with the corporate or the partner.
“What that does is it usually pushes us a little further up the maturity scale with startups; they have to be able to actually engage with MLS or the Dodgers or one of our other partners, because otherwise what’s the point? So we have a kind of foundational set of criteria, but then very specific criteria around the objectives of a programme.”
It would be wrong to think, however, that accelerator programmes are only geared towards serving large-scale sports organisations. If establishing a startup is a formidable enough task in itself, the problem facing early-stage technology companies is getting their solutions out in the open.
Alexandre Bustamante, the co-founder and head of product at automated production company Keemotion, admits his firm experienced initial struggles getting recognised because there was no comparison point for potential clients.
“Early on it was very tough to get recognised as a serious solution for broadcasting, or even just filming in general,” he says. “So we relied a lot on the early adopters, but at the time the lack of credibility – or even the lack of understanding [made it difficult]. We would show potential clients footage and explain word-by-word that this was a fully-automated, intelligent system that is making the decision on how to work around the action and create the final production, but they would say: ‘OK, but who is filming all this?’
We found ourselves in a very hard location because in order for people to accept you, they have to somehow be able to compare you to something else that already exists in the market
Alexandre Bustamante, co-founder and head of product at Keemotion
“When we first started there was no competition, so back then we were being compared directly against old broadcasting skills and services, and on the other hand we’re also being compared against software utilised for either editing or for coaching purposes. We found ourselves in a very hard location because in order for people to accept you, they have to somehow be able to compare you to something else that already exists in the market – and of course they couldn’t so that was a big challenge initially.”
That, in essence, is where incubators and accelerator programmes can help. Keemotion is one of the startups to have benefited from incubation with R/GA Ventures, which in 2017 introduced the company to ShotTracker, a sensor-based technology that automatically captures basketball statistics in real-time. The two startups joined forces to form the Autonomous Broadcast Network, partnering with technology giant Intel and Fox Sports to power an enhanced viewing experience during the National Association of Intercollegiate Athletics (NAIA) Men’s Basketball Championships, essentially doing the work of a 20-person broadcast team with just a pair of cameras and a few sensors.
As well as facilitating meaningful collaboration, R/GA Ventures aims to help early-stage companies rapidly develop their product and attract investment. It played an important role in Keemotion mapping out a focused business strategy.
“I would say R/GA was key in helping us identify who we were,” says Colin Cunningham, vice president of sales and marketing at Keemotion. “So it was a lot about brand development, a lot of questions about who we serve and why we serve them. They helped us identify a mission vision purpose; they helped us identify where we needed to go over the next three to five years. It was really about identity of the company, identifying the culture and really focusing on who we wanted to be and what we wanted to do to make ourselves special.
“The other thing I’d say that R/GA was key in was really helping us identify who the right technical partners and corporate partners were, and helping us create a brand that resonates at the highest levels of sport. Over the course of our business we’ve just continued to work with more and more elite brands as we’ve grown, and I think R/GA was a key part of developing that strategy to help us really stand apart as an elite service.
Keemotion – which now counts the Philadelphia 76ers, DC United and former NBA commissioner turned serial investor David Stern among its backers – is just one of a handful of budding companies that R/GA Ventures has helped bridge the gap to major sports brands. According to Plumlee, at least a dozen substantial pilots between GSVS partners and startups will be announced this coming May.
Plumlee also highlights PlayVS as one particular success story that has grown out of GSVS. Led by Elysian Park Ventures, the Dodgers’ investment arm, the high school esports league and platform closed out its Series B funding round in November, generating US$30.5 million from the likes of Adidas, Samsung and rapper Sean ‘P Diddy’ Combs.
“That was a company sourced by us and the GSVS, and presented to our partners over the course of our programme,” says Plumlee. “Then the partners led that huge round. That was a huge win for the programme and I think a great proof point because a number of the partners are engaging on the pilot side and the investment side.”
Clearly, then, there is an appetite among major sports organisations to invest in the technology of tomorrow as long as they can foresee tangible results. For Plumlee, that trend is only going to accelerate as sports continue to look for new ways to predict and capitalise upon future consumption patterns and fan behaviours.
“I think really it’s about understanding,” he asserts. “What they’re trying to do is understand emerging behaviours of their fanbase or their viewer base, changing consumption patterns, and how to stay ahead of that to increase fan engagement – and that’s more and more of a challenge. That’s something I think everyone is interested in – from the leagues to the teams, the broadcasters and media organisations, but also sponsors.
“We have a phrase that we use called the ‘four-minute fan’, and the idea is that a lot of fans now don’t want to sit through a three-hour game – they want a personalised experience that’s faster, so those are pretty significant changes in terms of fan engagement, consumer behaviour and what happens to the media rights. That’s something that we’re looking at very closely.”
They [R/GA] helped us identify a mission vision purpose; they helped us identify where we needed to go over the next three to five years
Colin Cunningham, vice president of sales and marketing at Keemotion