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Executives: Competitive Pressure Forcing Industry to Adopt New Technology

How teams, leagues and rights owners react to technology can greatly determine their future success, according to Sports Innovation Lab at CES.

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Photo via Pat Evans

CES Sports Zone on Tuesday and Wednesday is dominated by the discussion of opportunities in data and technology in sports.

The first day of CES opened with a presentation by Sports Innovation Lab’s CEO Angela Ruggiero and President Josh Walker about the transformative effect technology is having on the sports world. The technology is disruptive and changing not only the way athletes perform, but how fans are made.

“This is only accelerating,” Walker said. “You can expect there’s a hype cycle, but that doesn’t seem to be the case in sports. Now everyone is getting in on it and moving forward.”

Sports Innovation Lab hosts the discussions at Aria Resort and Hotel during the first two days of CES, which tackles the five categories that make up the sports technology ecosystem.

READ MORE: VenueNext Focused on Ways to Make Data More Actionable in 2019

The category of Quantified Athlete is perhaps the most in-demand, with more than 700 companies in the space and a well-defined market of athletes and teams looking to improve performance on the field.

But it’s the other four categories, Ruggiero said, that provide intrigue. The supply side is there, and it’s what the demand side will do moving forward and how its taken advantage of in the market. The other four categories of sports technology are Smart Venue, Next Generation Sponsorship, Immersive Media, and esports.

The past decade has seen a three-fold increase in technology companies in the sports world, and there’s an enormous amount of capital flowing in, Ruggiero said.

“The supply side is taking off; sports is not insulated from tech disruption,” she said.

Off-the-field, the most noticeable impact right now is how fan interaction with sports is changing. Walker said no longer are fans chained to their local team. His son in Boston is a Minnesota Timberwolves fan, simply because that’s the team he was drafted by when he was playing NBA 2K.

Likewise, fantasy sports and gambling further can change who fans root for on a day-to-day basis.

“These are fundamental issues that are created by the power of the consumer to choose by technologies in the market,” Walker said.

On a regular-season Thursday Night Football game between the Tennessee Titans and Jacksonville Jaguars, Walker said there were 16 separate ways to watch and engage. Fans could choose a way to watch and interact with friends, in VR or bet.

“If you don’t think it’s changing the fundamental business model, the sponsorship model, the rights model, you’re crazy,” Walker said. “It’s not sports competing with sports. It’s sports competing in the media economy.”

READ MORE: How Riddell Is Changing the Game With New Football Helmet Technology

New entries into the broadcasting industry are forcing the hand of traditional broadcast partners in sports. Amazon, for example, has the ability to mine a near-infinite amount of consumer data and technological infrastructure to define its moves in the sports industry.

“Amazon is buying rights, but also creating opportunities for rich sports and doing things fundamentally transformative,” Walker said. “Amazon is fundamentally changing what’s in the space. It sets the pace of what ESPN and NBC Sports have to do to keep pace with a new entrant changing the way fans expect to consume media.”

The supply side, as Ruggiero said, is plentiful. How the teams, leagues, and broadcast partners “react and begin to utilize the information and changes will determine how well they succeed.”

“I love that this industry is adopting technology,” said Ruggiero. “The competitive pressures are forcing us and I don’t think it’s insulated. The fan is changing. The companies that understand the fan the best are making the game-changing moves and the rest of the industry has to fundamentally understand the consumer, which is the fan.”

Pat Evans is a writer based in Las Vegas, focusing on sports business, food, and beverage. He graduated from Michigan State University in 2012. He's written two books: Grand Rapids Beer and Nevada Beer. Evans can be reached at pat@frntofficesport.com.

Innovation

St. Louis Blues Stanley Cup victory breaks Fanatics sales record in 12 hours

It took only 12 hours for Blues fans celebrating the first Cup in the franchise’s 52-year history to shatter the previous sales record set by the Washington Capitals in 2018.

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Photo Credit: Winslow Townson-USA TODAY Sports

There’s nothing like the first taste of a championship. After winning their maiden Stanley Cup title, the St. Louis Blues are generating record sales for merchandising giant Fanatics. With the Toronto Raptors poised to possibly win Canada’s first NBA Championship tonight, Fanatics could be in for two record-setting days in a row.

It took only 12 hours for Blues fans celebrating the first Cup in the franchise’s 52-year history to shatter the previous sales record set by the Washington Capitals in 2018. Within 14 hours, sales of licensed Blues t-shirts and jerseys were pacing 10% ahead of last year, according to Jack Boyle, co-president of direct-to-consumer retail for Fanatics.

“I think it’s a great way for fans to be part of the team and part of the championship,” says Boyle. “They can’t hoist the Cup in the air…but they can buy items.”

These moments of victory are glorious — but fleeting. Sports fans are willing to shell out big bucks within seconds or minutes of winning the Big One. But the urge passes quickly. It’s vital for leagues, teams and online retailers such as Fanatics to have the right product ready to go.

Within minutes of the Blues beating the Boston Bruins 4-1 in the Cup-clinching Game 7, fans went directly to their smartphones to order merchandise. Around 80% of Fanatics’ Blues volume, according to Boyle, came from people ordering via their mobile devices.

The most popular sales items? Try the championship caps and t-shirts (retail price $34.99) worn by Blues players and coaches celebrating on the ice Wednesday night, says Boyle.

If fans shop the Blues’ “Winning Never Felt So Good” Cup Collection” at Fanatics, they can also purchase miniature Cups with the Blues logo ($69.99) and framed pictures of players hoisting the most iconic trophy in sports ($189.99).

Fanatics was not the only corporate winner Wednesday night. NBC Sports says Blues-Bruins Game 7 was the most-watched NHL game in 25 years. The game drew a total audience delivery of 8.914 million viewers, according to Nielsen and Adobe Analytics. St. Louis popped a 41.8 local TV rating — making it the highest-rated Blues game ever in that market.

It was also the most-streamed NHL game ever, delivering an average minute audience of 191,5000. NBC’s seven-time Emmy Award-winning play-by-play announcer Mike “Doc” Emrick rose to the occasion.

“It is the last chapter in an incomparable storybook finish for the St. Louis Blues, and an incredibly disappointing finish for the Boston Bruins,” Emrick said as the Blues celebrated on the Bruins’ home ice.

Meanwhile, Boyle and Fanatics are ready to roll tonight if the Raptors win the NBA championship.

Fanatics both manufactures and sells licensed sports gear for the major U.S. sports leagues. Similar to the Blues, Fanatics’ factories will instantly churn out Raptors championship gear if Kawhi Leonard and teammates can get by Steph Curry and the powerful Golden State Warriors.

The Blues and Raptors have one thing in common: Neither club had ever won a championship.

The “high” of finally winning after years of playoff heartbreak and near-misses is intoxicating to their fans, says Dr. Norman Wyloge, a New York-based psychoanalyst who treats athletes and celebrities.

At the moment of victory, money’s no object. But it’s a temporary state that wears off quickly. If consumers aren’t careful, they can end up with a financial hangover, warns Wyloge.

It used to be fan demand for team/player gear would come and go before retailers could capitalize. Exhibit A was the “Lin-sanity” craze in 2012, according to the New York Times.

When New York Knicks guard Jeremy Lin became an instant star, fans searched for his t-shirt or jersey to no avail. By the time retailers stocked up, Lin-sanity was already waning.

Those days are over. Fanatics has changed the game by making fan merchandise available when and how customers want it.

Social media giants such as Instagram are getting in on the action too.

The NBA, Instagram and New Era caps are teaming up to offer a “Shoppable Moment” the instant the NBA Finals are decided in either Game 6 or 7. The minute the buzzer sounds anointing the 2019 champion, Instagram will offer a $50 cap /T-shirt bundle to the 37.7 million followers of its NBA account.

The “tap to shop” promotion will be exclusive to Instagram for 24 hours after the game and will give Raptors or Warriors fans the opportunity to complete the purchase without ever leaving the app.

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Innovation

MiLB’s FIELD Program Aims To Diversify Baseball Leadership

In its fourth year, Minor League Baseball’s FIELD Program welcomes 32 participants to its immersive week of professional development.

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Photo Courtesy MiLB

Vince Pierson stepped on a plane for the first time in 2010 as he journeyed to Colorado Springs for the U.S. Olympic Committee’s Finding Leaders Among Minorities Everywhere program. That trip changed his life, propelling him into a career in sports business.

Now, in his role as Minor League Baseball’s director of diversity and inclusion, Pierson is overseeing a program that aims to foster in the next generation of sports business leaders, as well as introduce the idea of working in baseball to more minorities. This week, MiLB will host the fourth annual Fostering Inclusion through Education and Leadership Development, or FIELD, at the Jackie Robinson Training Complex in Vero Beach, Florida.

The week-long, full-immersion program for college students and recent graduates is a direct result of Pierson’s experiences in Colorado nine years ago.

READ MORE: Minor League Baseball Connects Women to Help ‘Lift’ Careers

“I spent that week in Colorado Springs and my eyes were opened up, so when we started thinking about how we can engage that same age group, something similar was in line,” Pierson said. “It’s the type of thing we wish was around when we were going through this. Last year, there were hugs and tears when we left and the biggest thing for me is that’s 32 new people I get to connect with when they begin their careers. That’s fun and fulfilling for me.”

There were 25 people in the first FIELD class, and Pierson said 20 of them had never been to a baseball game prior to their participation in the program. This year’s class has 32 participants, and Pierson hopes to achieve the 60% placement rate from last year. He considers placement as anywhere in the baseball industry, whether it’s working for MiLB — there are two alumni at the league office — or ticket operations with the New York Yankees.

“There’s an awareness gap. There’s thousands of sports management majors and many aren’t engaging with baseball,” Pierson said. “These are the future leaders of our industry, these are people taking out tons of student loan debts to prepare for their careers and this segment of sports wasn’t on their radar. This program addresses that.”

Pierson said the participants will be running through a schedule simulating their first homestand, from early morning to late nights, and they’ll leave knowing whether they are fit for a career in baseball. Each day starts with a short diversity workshop, leading participants through a series of “bite-sized” exercises addressing topics like stereotypes and microaggressions.

FIELD also welcomes women and minority leaders from across the baseball industry, including Katie Davison, MiLB senior vice president of digital and business development, and Paris Freeman, Oakland Athletics group sales executive.

There’s also a group project throughout the week, a women in baseball panel and a resume and interview workshop with human resource representatives from the Kansas City Royals, Atlanta Braves and Washington Nationals.

On Tuesday, Jacksonville Jumbo Shrimp General Manager Harold Craw spoke to the group about the duties and rigors of being a general manager. Craw was the first African-American to win MiLB’s Executive of the Year Award, and hopes to have a near future with multiple African-American general managers.

“For me, ever since this program began, I want to help because it’s one of the things that will help Minor League Baseball continue to diversify from a front office standpoint,” Craw said. “It’s bringing the youngest and brightest talent together to have a full week to share experiences and learn and engage and for them to form relationships.”

Craw hopes to forge enough contacts and stay connected with alumni with potential position openings in mind. He couldn’t stick around beyond Tuesday and was disappointed he’d miss the alumni panel to hear about their experiences and where they’ve ended up.

The program is hosted at the Jackie Robinson Training Complex, a fitting setting for a program developing a diverse set of future leaders.  

READ MORE: NASCAR Diversity Program and Rev Racing Team Up to Shape Next Generation

“It’s cool to be here with the history that lives here,” Pierson said. “It’s the same place Jackie trained.”

The entire FIELD Program costs a participant a $250 registration fee and the travel to Vero Beach. The rest is covered by MiLB, including registration to the Baseball Winter Meetings. Pierson said he hopes to keep the placement rate at more than 60% before expanding the program, but that there’s space as currently set up for upwards of 50 participants. He said it’d be tough to program another minute into the week, but hopes to keep thinking creatively and outside-the-box to curate a better experience.

“This is a money where your mouth is program,” Pierson said. “It’s an opportunity for Minor League Baseball to take the bull by the horns in how we’re addressing diversity. It’s one thing to have great conversations, but it’s another to intentionally create the hiring process for 32 young professionals.”

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Innovation

World Armwrestling League Hopes To Cash In On Everyman Approach

Whether it’s an investment banker against a plumber or a priest, Steve Kaplan believes the World Armwrestling League has global appeal.

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Steve Kaplan was drawn to the commitment of the athletes in the arm wrestling circuit. He’s convinced the rest of the world will be too.

“You have this preconceived notion of what it was, but I was blown away – I couldn’t believe it,” said Kaplan, an entrepreneur and former advertising executive. “I expected out of shape dudes, but [instead I saw] NFL tight end-caliber athletes – fully committed athletes.”

Kaplan launched the World Armwrestling League in 2014 with an aim to grow the sport globally.

READ MORE: Brutal Business: How WLC is Selling Lethwei to the World

Now, with a streaming deal with B/R Live, as well as media partnerships with Anthem Sports and Fanseat, he thinks the time for the niche sport is now.

“It’s perfect for today’s market,” Kaplan said. “The ability to build a sport from scratch, that was exciting for me. The cross-section of the world of people who compete, it brings people together, it’s a cool culture and got me hooked.”

When the league launched, Kaplan found a willing partner in ESPN for broadcasts, which he said recognized the competition as more World Series of Poker, less UFC.

But similar to other niche sports – with a passionate yet small core audience willing to consume that content on mobile platforms  – doing a deal with over-the-top provider became more appealing for the league as it looks to lean into that digital-first fanbase.

Last year, the World Armwrestling League signed a deal with B/R Live to broadcast its events, which has continued through 2019. It costs $2.99 to stream one of the live matches.

Recently announced broadcast partners Anthem Sports & Entertainment and Fanseat will further help to reach that goal, Kaplan believes. With Anthem, World Armwrestling League events will air on the Fight Network and Game+, while Fanseat will stream all the league’s events in more than 140 countries — the league has welcome wrestlers from more than 40 countries.

“[World Armwrestling League] has many competitors from Europe, where the sport is highly evolved, as well as around the globe. This partnership will allow our company to continue exploring new and relevant content for our subscribers while providing sports fans around the globe with a never-seen-before level of live WAL coverage,” Fanseat Managing Director Jean-Maël Gineste said.

The league’s YouTube channel has generated more than 185 million impressions and 100 million viewed minutes the past year, according to a release.

Right now, B/R Live broadcasts 20 events a year, with six being elite major events for a total of 50 hours. Kaplan said he hopes to have a formal announcement with substantial sponsors for a qualifier tour and likewise hopes to broadcast two elite events from Europe and one from Asia next year.

READ MORE: Gauntlet of Polo Aims to Add Relevance to Niche Sport

Kaplan, who first encountered the idea on a tour around Afghanistan with the U.S. Army seeing how many troops were arm wrestling in their limited space across the country, was intrigued by the fact that these committed athletes can come from every walk of life – to have a plumber go against an investment banker or priest against a guy who makes tires, all creating unique storyline lines. Kaplan believes the sport can be a draw for participatory athletes, those same people who helped grow organizations like Tough Mudder and Spartan Race.

Conveying that everyman aspect and concentrating on making sure visuals were there to bottle the energy and excitement of the community that shows up to events is a key part of these new media deals, things that Kaplan believes are crucial to the property’s success.

“For us, it’s all about exposing this to more and more people,” Kaplan said. “Not everything we do is purely economic, some of it is about getting the best partners for where we want to go tomorrow, not just today. We are a global sport, so we’re trying to build the brand in a global context.”

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