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Big sports teams look to small startups for tech edge

Lauren Brousell | Sept. 18, 2015
Savvy sports organizations, including the Los Angeles Dodgers and Cleveland Cavaliers, increasingly look to the startup community for technologies that can enhance the fan experience and improve business operations, on and off the field.

However, Fidelman says that it will be interesting to see what the Dodgers do once the program is over. "Let's say you have a company that has products that can help the Dodgers with ticket sales," he says. "How committed are they to piloting those technologies, and what does that do for the rest of the teams in the league?" The level of support startups will receive after the program ends is also unclear, he says.

Small sports partnership a hit for startups, teams

On a smaller scale, it's easy to find examples of sports organizations that work with one or two startups, instead of running a formal incubation program. For example, the National Basketball Association's (NBA) Cleveland Cavaliers just created its CavsEats mobile app with startup Tap.in2. The app lets fans order food, drinks and merchandise, which are then delivered to their seats during games.

Some risk exists when organizations work with unproven startups and entrepreneurs, according to Shields., but dedicating R&D funds to startups can be a cheaper way to reap benefits than establishing a formal business deal or acquiring an entire technology company, he says.

The programs are also good PR for sports organizations, according to Fidelman. Of the Dodgers Accelerator program, he says, "I'm hoping they're doing it to get more exposure to technology that will help … sell tickets and promote the Dodgers and the sport. It will also help if they really want to give back to the community and show that they are good citizens by investing in startups that could turn into bigger companies."

For the startups, partnering with sports organization is a no-brainer. Unless a company is about to be acquired or just landed a huge round of funding, teaming up with a sports organization or applying for a pitch competition can help in many ways. "The startups are given a platform to prove their worth," Shields says. "In that quid pro quo relationship, if the idea is there — and that's a big if — it can be beneficial to both parties."

Professional athletes elevate startups

The power of celebrity can be also valuable to entrepreneurs and startups looking to get off the ground. Professional athletes with recognizable names increasingly reach out to startups, as well as established companies that interest them. For example, New York Knicks basketball player Carmelo Anthony has his own venture firm, Melo7 Tech Partners, which made 21 investments and aims to discover new digital-media, consumer-Internet and technology companies. Former NBA player Steve Nash also has his own venture firm, Consigliere Brand Capital, which invested in six companies since it was founded in 2011.

 

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