The LA Dodgers partnered with R/GA recently to launch the Dodgers Accelerator, a 12-week program that will sponsor 10 start-up ventures for 3 months. The program is a bid to combine audience engagement and technological advances into the sports realm. The Dodgers and R/GA will invest $20K in each startup in exchange for 6% stake in the company.
When looking for an investment, Stephen Plumlee, Managing Partner of R/GA Ventures says they’re looking for innovation “[…] at the intersection of sports, technology and entertainment.”
“That includes everything from fan engagement, to smart venues, to sports performance, to youth sports. And things like VR content and virtual season tickets, too,” continues Plumlee.
Though R/GA and the Dodgers are touting the program as the first of its kind, the momentum of VC funding moving into the sports ‘arena’ has been prevalent for some time. For instance, VC funding for sports tech startups hit $927 million last year – up almost 30% since 2012.
This trend of investments has also caught the attention of another contingent: celebrities. Denver Broncos quarterback Peyton Manning and New York Knicks forward Carmelo Anthony are just two of the many celebrities who are throwing their hats into the venture capital ring.
A lot of the growing interest in sports tech is “digital disruption.” The combined innovation of technology and sports is necessary to keep up with growing online fantasy sports operations, ticket distributors, and the like.
“The advent of new technology allows entrepreneurs to create new ways to create a closer connection with fans and give them more access to the teams, leagues and sports they love. That makes for a very compelling situation,” said Chief executive of Mandalay Sports Media.
The digital disruption is interesting in that it does not just allow for big businesses to gain visibility; it also allows small enterprises and startups to gain exposure through these deals.
Chief executive of Capital Sports Ventures, Greg Bibb, said, “[…] there’s a huge marketplace out there for underserved properties and sports, and investors are now seeing that and actively working to grow those areas. And we’re particularly focused ourselves on the intersection between participatory sports and technology that we think is now very vibrant.”
This vibrancy and increasing competitiveness to secure entrepreneurs has caused a bidding war between venture firms angling to close investment deals with startups, forcing investors to be as inventive as the startups they hope to secure.
Says Kliavkoff of Hearst Ventures, “Because we’re obviously a large media outfit, we can have a very long investment horizon. And our operating role gives us access to market information that we think makes us better investors.”
The takeaway from this increase in sports tech/VC involvement may be that venture investor roles are shifting, and they — not the startups — will be the ones pitching to close the deal.