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Catalyst Wants to Play Ball



 

From the first Olympic Games in 776 BC to the current NBA playoffs, sports have long captured public interest and served as an important thread of the broader cultural fabric. In the U.S., for example, sports are largely unrivaled when it comes to live entertainment, with several sports leagues consistently filling stadiums across the country as well as occupying eight out of the top ten most-viewed U.S. telecasts according to Nielsen’s Tops of 2015: TV and Social Media.

This popularity has created a robust market, which is expected to continue to grow even larger. According to PwC’s 2015 report on North American Sports, the total addressable market for sports, which includes gate revenues, media rights, sponsorship and merchandising, was $60.5 billion in 2014 and is expected to grow at a 4.0% CAGR to $73.5 billion in 2019. These figures don’t include the popularity of sports outside of the U.S., which easily take the global market size well above $100 billion. The passionate and engaged fans that drive this market now expect new ways and mediums to access and engage with their favorite sports. Catalyst believes that the emerging Sports Technology (“Sports Tech”) market will help meet these expectations and provides a compelling opportunity for future investments.

Sports Tech represents the intersection of sports, technology and entertainment and focuses on technology products and services for sports players, teams, organizations and fans. We developed a Sports Tech Market Map that frames the market by the level of competition served: (i) professional, (ii) collegiate and (iii) youth and amateur, and then further segmented by the following sub-verticals: Content & Media, Fantasy Sports, eSports, Commerce & Licensing, Venue, Event & Fan Management, Training & Team Management and Data & Analytics. Check out Catalyst’s Sport Technology Primer that highlights the market opportunity in Sports Tech and see Catalyst’s main investment themes outlined below:

  • Content & Media – As discussed in greater detail in Catalyst’s Online Content Research note, we are interested in sports-focused online media & content businesses that effectively and repeatedly attract, maintain and monetize an audience.
  • We are interested in both the content-creating, digital-first media businesses and also the underlying digital infrastructure companies that help support the aggregation and distribution of content:
    • Online media companies that produce engaging content for an enthusiast audience (e.g., The Player’s Tribune, which provides unique insight into the daily sports conversation through first-person stories directly from athletes)
      • Truly interesting companies are those that use technology innovation in analytics to optimize what content is produced, how it is packaged, when and to whom it is served and its placement on the site. Many of these companies are evidenced by a strong social following and top viewership metrics (e.g., time on site).
    • Digital infrastructure companies that can deliver scalability and reliability for live games, events, scores, stats, shows and more (e.g., SportsLabs, which provides a platform that can integrate with any data source and reliably deliver full digital sports and media experiences to any device or platform)
      • As fans continue to consume sports content in new ways, sports entities, rights holders and other organizations working across sports and digital media will need to be flexible in how they deliver and monetize content.
  • Training & Team Management – With their similarities to the SaaS and marketplace models with which we have extensive experience, we are interested in training & team management companies, especially those that provide exposure to the youth and amateur sports industry’s shift from offline to online.
    • Team management companies (e.g., Korrio) allow youth and amateur sports organizations to move past dated pen and paper methods of websites, rosters, spreadsheets, emails and contact lists to a single, integrated system that streamlines all the time-consuming tasks that surround sports (e.g., website and hosting, registration and payments, financials and reports, team formation and rosters, schedules and calendars and communications).
    • Training enablement platforms use software and analytics to help improve player and team performance. For example, Krossover provides full-service game film analysis, comprehensive statistics and streamlined sharing tools to help teams improve their own performance, learn about upcoming opponents and assess potential free agents and draft picks.
  • In addition to the aforementioned two themes, we are also interested in opportunistically reviewing investments in the Venue, Event & Fan Management Specifically, we are interested in companies in the sports and entertainment CRM space that provide a centralized system for information critical to managing fan and client relationships (e.g., Kore Software).

Catalyst Investors employs a proactive, research-based approach to investing. We target sectors that are experiencing above-average growth. If you are a growth-stage Sports Tech company seeking investment, our team would like to hear from you. Please send inquiries and business plans to [email protected].

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