Sports Loft Podcast

Investing in the shift in consumer spend and interest

“What we realised early on is that the consumer sentiment is shifting," says Deepen Parikh, Partner at Courtside Ventures and guest on this week's Sports Loft Podcast. "When you look at a younger consumer and the way they interact with sports – whether it’s through live streaming or audio, whether they’re fans of a team or players, even what they view as sports – these were all areas that were dramatically shifting.”

When Courtside was founded in 2015, it was this realisation that informed the investment strategy of the New York firm, leading to successful early stage backing of startups operating across the sports, tech and media landscape, including adjacent sectors. Part of the founding team, Deepen instrumental in Courtside's involvement in sports media giant The Athletic, personalised nutrition business Gainful, esports and lifestyle organisation 100 Thieves, and many more. 

We caught up with him to dig into where he sees the opportunities today (and which sectors Courtside is avoiding), to find out what VCs can offer founders beyond the funding itself, and to ask how the firm goes about making its investment decisions. Here's just one nugget from the conversation:

"We like taking models that we know really well in the US, and then finding what we believe are the most compelling teams in more nascent markets but where the TAM is incredibly large and so we're diving [into sports gaming] really heavily," says Deepen. “We’re looking a lot more at wellness as a category, nutrition, and a lot of other areas that we think there's a lot of growth opportunities that are still fairly nascent. So every fund within the world of sports, collectibles, gaming and wellness we’ll go really deep in a couple of areas. Our goal is to talk to as many companies as we can to understand the market landscape and ultimately make investments in areas we think we can be really helpful to the founders in.”

Uncovering opportunities in sports, tech and media

"You're working with imperfect information, trying to piece things together. It feels like a puzzle: should we or should we not make an investment in this opportunity?"

That's how Lance Dietz, partner of KB Partners, describes his job of identifying successes and investing across the sports, tech and media startup landscape. It's a turbulent time for the investment space, as well as the wider economy, which seemed the perfect time to catch up with Lance to discuss all aspects of the industry.

Our discussion spans how best investors can provide value for their portfolio companies beyond cold, hard cash, the opportunities around Web 3.0, how to best engage with the Gen Z audience, and the pros and cons of operating a compact investment partnership.

Lance joined KB Partners in 2018, as part of the investment team after spending time as an investment banker with JP Morgan. Prior to that, he was an officer and engineer in the US Army, stationed in Germany, Afghanistan and across the US. He also played competitive basketball at West Point in the Patriot League.  

Among the many insights offered up by Lance, one was that now might not be such a bad time to invest as it might seem.

"Now could be a great time to be supporting companies and founders in spaces that you find attractive with models that are sustainable and valuations that have become more rational," he says. "I think if you capitalize those those companies well and give them enough runway, you could build a really attractive portfolio in the next twelve eighteen months at prices that seem less frothy."

What early-stage VCs are looking for

As far as strategic investors goes, having a direct line into tech giants Microsoft and four-time Superbowl winners the Green Bay Packers is a pretty good starting point! In our latest issue of the Sports Loft podcast, Cordero Barkley, Partner at TitleTown Tech, shares his story from college athlete to early stage VC, and how as a firm TitleTown Tech are supporting the growth of their portfolio companies, including our very own Slate.

Cordero also gives us a sneak peek to where their focus will lie for their second fund, including which aspects of NFTs and the metaverse look post appealing for investment.

Our favourite quotes:

“Leveraging the connectivity that we have in marketplace…, that's one of the perks of having the Packers and Microsoft, you can really get connected to anyone in the world and pick up the phone to call someone to say hey, we have a company that fits your thesis would love for you to take a look at it.”

 

“The founders are taking all this risk, they’ve been told no 300 times, and here they are still fired up, talking to me. That’s so fun to me to watch - I always say the founders are some of the most courageous people we ever deal with.”

 

“As a former athlete myself, the competitive nature of identifying talent, finding the right deals to get into, being able to carve out a niche that fits your thesis - it's something that makes the job very fun and it gives you kind of that feel of being in the game again”

 

Bringing an outsider’s approach to the sports media industry

The sports media landscape is evolving rapidly, and navigating and understanding that evolution can at times be tricky. With the likes of TikTok driving a push to short form content, but Netflix demonstrating clear demand for binge-worthy episodic series, how should rightsholders be deploying their time and resource to deliver value to fans and partners?

In this episode of the Sports Loft podcast, we are joined by ATP Media's Chief Strategy Officer Nick Bourne as he takes us through his journey as commercial lead at sports media disrupter Copa90 to his position at one of the biggest rightsholders in the industry. He shares his perspective on how the industry should be approaching its content strategy today. Throughout this journey, Nick has brought an outsider’s perspective to the industry, whether through driving a disruptive brand and new content formats at Copa90 or bringing different approaches to the tennis world.

Innovation in Fan Experience

The Atlanta Hawks’ State Farm arena has been ranked as the best NBA Game experience in both 2019 and 2020. With the focus on the game experience in the NBA and heightened consumer expectations, that’s no mean feat – especially when, in the first year they won they award, the team wasn’t doing well: “When the team’s winning, the beer is colder and the hotdogs are warmer.”

So for teams, how can you deliver a better experience for the fans across all aspects of their experience – from before the game, at the venue and after the venue. How do you help them get the information that they need to ensure that they have the best experience? How do teams compete against other ways that people can spend their time?

In this episode, Yanni spoke to Donny White, CEO at Satisfi Labs and David Garcia, Senior Vice President, Experience & Innovation at Atlanta Hawks. They discussed the approach that led the Hawks to be ranked as the #1 gameday experience in the NBA, what David has been able to bring from his background with Amazon and Disney into the NBA and how the data captured by Satisfi’s AI assistant is informing changes to the fan experience at Atlanta’s State Farm Arena.

Quotes from this episode:

David - “When fans rate their experience at a game, it’s tied to the amount of information they have before they arrive and the expectations that they come in with. For example, the bag policy doesn’t change from one guest to the next. But the guests that knows you can’t bring a bag will have a better experience than the guest that didn’t know and shows up and has to deal with that.”
 
Donny – “The new fan is a data giver. They’ll ask questions, they’ll tell their friends, they’ll be on social media, they’ll communicate - they have an expectation that brands will respond to them.”

Building B2B Brands

It used to be that all the most exciting marketing happened in the B2C space - those were the campaigns that won awards and got featured in industry press. The B2B marketeers were solid, reliable but not that interesting. Not any longer. A world of always-on consumers has forced B2B brands to totally re-think how they talk with their consumer. The B2B tech buyer is the same person who is buying the Vans trainers and subscribing to Netflix. They want personalisation, content relevant to their interests and businesses who share their values. B2B marketeers have had to up their game.

For early stage companies, this is a challenge. How do you deliver the quality of marketing and content across multiple channels with limited resource and budget? How do you build a consistent message when the product is evolving so fast? But equally, in the early days of a startups’ journey, companies are focused on understanding their customer’s needs and building an initial product that they can sell - do they really need a brand at that stage? As they acquire more customers and the product becomes increasingly defined, that’s when the company’s brand – as Jeff Bezos put it, “What other people say about you when you are not in the room” – becomes increasingly important.

In the latest Sports Loft podcast we are joined by the Chief Marketing Officers of FEVO and Greenfly, Betty Tran and Tom Kuhr respectively. They discuss why a brand is important to achieve scale, how their brands are constantly evolving and how building a brand plays into fundraising conversations.

Innovation in the sports broadcast

Sports fans have got so many channels that they might subscribe to – and in many cases they are driven by which channel has the rights to whatever they want to watch. However, the experience of watching a game is varying more and more between broadcasters as the channels seek to differentiate themselves – whether it’s through cameras, commentators, interactivity, graphics or studio presentation.

 

Consequently, the need to innovate (and sometimes innovation for the sake of doing something different) becomes more important for content owners. How can the broadcasters get the fans to watch just a bit longer? How can they provide the fans with a differentiated experience that enables them to have their voice heard or to access more complementary content on their phone? How is interactivity changing the presentation of the broadcast? How do they have to compete (or compliment?) the teams, leagues and athletes who are becoming content producers in their own right? How is on-screen talent being evaluated - is it now as much about the community that they can bring?

 

In the latest Sports Loft podcast, we are joined by Michael Bucklin, Vice President of Digital Content at Fox Sports, who leads the development of content to complement Fox’s rights portfolio such as the Super Bowl and FIFA World Cup, as well as studio shows such as Fox NFL Sunday. We are also joined by Tagboard’s President Nathan Peterson, whose clients include content owners such as Fox Sports, NBC, NFL Media and MLB. 

 

Building great products in sports and media

When we meet with the founder of a prospective Sports Loft company, we are very focused on product – what exactly is it that you’re building? Who has the problem that you are solving? Why is your product better than the alternatives out there? What have you done to make your product as simple to use as possible? How are people using your product? Are users returning? Will anybody buy it?

This product focus is vital in the world of sports, media and entertainment. Why is the fan going to choose this product over all the other options they have? How can the product be applied to the workflows of a major event or the constant “always-on” of a league season? What can teams, leagues or sponsors achieve with this product that they couldn’t do before?

In this podcast, we are joined by Slate’s co-founder and CEO, Michael Horton whose clients include teams across every major US league, the Premier League and major sponsors, and Tagboard’s President Nathan Peterson whose clients include the likes of Fox Sports, NBC, Turner and NFL Media. They discuss what they have learnt from building tech products for the sports and media industry, the importance of the people in the product building process and how their products have evolved from their earliest iterations.

Selling Internationally

One of the things that we look for in the companies at Sports Loft is a management team that operates with a global mindset. We want to see companies who have products that can be successful in multiple geographies and sales teams that want to embrace the fact that whilst national differences exist, sport and media is a genuinely global business. 

However, growing a global operation is not easy. Should you build in your domestic market first and then think about selling internationally or should you go global from the start? Can you sell from your home base or do you need “boots on the ground?” How do you get to really understand the cultural differences between college basketball, international tennis and IPL? If you don’t expand globally quickly enough, will local copy-cats interfere with your global ambitions? What people do you need? Will the value in your product be perceived differently between Canal+, NBC and Foxtel?

In the latest of the Sports Loft podcasts, we are joined by Pumpjack Dataworks' CEO Nick Goggans whose clients include World Table Tennis, Williams F1 and Miami FC, and Covatic’s CEO Nick Pinks whose clients include media owners such as Bauer Media. They discuss their experiences of building global sales operations, the cultural differences in the sports industry between US, Europe and Asia and whether operating internationally will necessarily increase your cost per sale.

Building a ticketing operation for the modern sports industry

The financial results of many sports organisations in the last 18 months have clearly shown why ticketing revenue is so important. Whilst pre-pandemic, many teams and events almost took their ticketing revenue for granted (we’ve got a waiting list for season tickets, we don’t need to worry), that complacency doesn’t exist anymore. Fans in attendance make the TV product better and amongst many of the teams and events that we talk to, there is a clear desire to deliver the best fan experience possible so that the fans keep coming back.

So, for teams and events, how can you deliver those “Instagrammable” moments that the fans will remember? How do you get the fans’ attention in an environment where they have so many other ways to spend their money?  How do you deliver a ticketing and event experience that is at least as good, and hopefully better, than anything they can get from Amazon, Netflix or Instacart?

In the latest of the Sports loft podcasts we are joined by F1 Miami Grand Prix’s Josh Young, who is building the ticketing operation for F1’s new race in Miami, and FEVO’s Colin Casey, whose clients include the LA Dodgers, NY Giants, Nascar and many others. They discuss how teams and events are leveraging technology in the ticketing process, the importance of the gameday experience and whether you’ve got your pricing wrong if you sold every ticket.