Celebs and NFTs; Nike Super Spikes; Corruption in sports; Do's and don’ts of angel investing; Biohacking tricks from the world's best footballers
Week 2
Skin In The Game is a newsletter about sports, technology and investing. We highlight the deals, articles, podcasts, books and people that you should know about.
We also run a regulated angel investing group that connects investors with visionary SportsTech startups. By providing a platform for fans, athletes, brands and entrepreneurs to collaborate and co-invest, we’re helping to shape the future of sports.
This week I achieved inbox meltdown. Turns out I’ve subscribed to way too many sports newsletters, which are now bombarding my email with alarming frequency. Sportico and Front Office Sports remain my go-to’s for quality content on the business of sports, and SportTechie seems to be leader in SportsTech coverage.
I somehow found time to read (okay, I skimmed parts of it) a mind-blowing and very detailed book on the future of sports, highlighting emerging technologies and their implications for athletes, clubs, leagues and of course, fans. I’ve shared a review of sorts on Twitter.
And I had a demo of the SportsTechX database from co-founder Rohn Malhotra, part of some wider detective work to identify sources of deal flow (beyond Crunchbase, AngelList, and good ole fashioned word of mouth) for our angel syndicate. Rohn is a nice dude and the product is great. If you’re in the business of SportsTech or simply interested in innovation in sports, it’s well worth taking a look.
The volume of news doing the rounds on NFTs is scary, as is the amount of capital pouring into this burgeoning pocket of the sports market – so much so that it can distract from other interesting developments. So, I’ve included a weird and wunderbar mix of stuff in this week’s dose to highlight the dominant trends and still nascent opportunities in sports (and yes, that does include NFTs, because they’re, er, completely unignorable).
Enjoy the binge, and hit reply if you have something to share, or simply want some empathy from a fellow barely functional sports addict.
✊ Athlete empowerment
Online, Athletes Are Bigger Than The Olympic Rings – Those heading to Tokyo are competing in a quadrathlon of sorts. “You won’t just be an athlete,” Facebook director of global sports partnerships Peter Hutton told potential Olympians at a recent virtual event, “You’ll be a creator, an influencer and a brand ambassador.”
These comments highlight the opportunity for athletes to build a lucrative, diversified and sustainable business around themselves, but also the risks that come with managing that business whilst maintaining athletic performance, health (both physical and mental), family life, and other need-to-haves.
How Soccer Clubs Became the Latest Must-Have Celebrity Investment – On the surface, LeBron James, Natalie Portman and Guy Fieri don’t necessarily have much in common. All three, however, part own soccer teams. The working list of celebrity owners is massive…
LeBron is part of English giant Liverpool FC’s ownership group.
Ryan Reynolds and Rob McElhenney recently bought Wrexham AFC.
The ownership group for Liga MX’s Club Necaxa includes former NBA All-Star Richard Hamilton, Eva Longoria, Kate Upton and her husband, MLB pitcher Justin Verlander, Mesut Ozil, former NBA player Shawn Marion, Victor Oladipo and Bode Miller.
Longoria is also part of the ownership group for the NWSL’s Angel City FC, along with the likes of Natalie Portman and USWNT great Abby Wambach.
Will Ferrell is one of the owners of MLS’s Los Angeles Football Club.
Matthew McConaughey is an owner of Austin FC.
Drew Carey has been an owner of the Seattle Sounders since before celebrities owning soccer teams became a bona fide phenomenon.
Leicester City legend Jamie Vardy has been named co-owner of the Rochester Rhinos, a United Soccer League team that has been on hiatus since 2017.
The days of “dumb money” (or at least, anonymous money) in sports are coming to an end. Clubs looking to challenge perceptions, reach new fans, and expand into new sponsorship markets are prioritising investors who can offer them more than capital. Uber-celebrities from the world of sports and entertainment provide not only financial investment, but massive social reach. They are becoming increasingly active and hands on, partly because they believe in the mission, partly because they want to maximise ROI by exploiting synergies with their own personal brands.
Cameo Adds Magic Johnson to Its Board, And Its User Base – Cameo, a company that lets celebrities sell personalised messages to fans, is adding Earvin “Magic” Johnson to its board. As part of the deal, Johnson will also become one of the thousands of athletes, musicians and Hollywood stars who take part in Cameo, and will record a personal message for a fee. Prices range from a few dollars to as much as $1,500.
From the Fringes – Another great newsletter outing from bestselling author and friend of Skin In The Game, Ben Mercer. An eclectic mix of references, ideas and media formats, and the writing is superb. It was interesting to hear Ben’s thoughts on Cristiano's distain for Coca Cola – and the way that athletes can move markets:
"It's more grist to my 'Modern Gods' mill, where we pick our own altars to worship at, all increasingly in thrall to the power of the individual."
Ben lives just down the road, and I love the fact that I can quiz him about the business of sports over an actual beer in an actual pub, without masks and social distancing. Let’s hope it lasts.
👟 Advanced materials
Nike Super Spikes Are So Fast That Rivals Are Wearing Them – The shoe-tech revolution Nike unleashed on the marathon-running world five years ago with mysterious prototypes has veered onto the track, where a growing army of “super spikes” is shredding records. Debate rages about the degree of advantage conferred by the new spikes, which feature soles with a rigid plate and super light, energy-returning foam. But the near-universal belief that they help has prompted a radical move ahead of the US Olympic Track & Field trials. Brands that pay elite athletes to endorse their shoes are granting them permission to wear a competitor’s product. For many runners, that’s Nike.
💊 Sports medicine
The NFL will provide funding for research into pain treatment, including medical marijuana – The pain management committee of the NFL and the NFL Players Association will provide $1m in funding for research into pain management and cannabinoids, the committee announced Tuesday. For years, the NFL suspended players if they tested positive for marijuana multiple times. That changed with the collective bargaining agreement approved a year ago. Now, the league wants to know more about how safe cannabis and CBD are and if they work, particularly as a potential alternative to opioids – an interest that follows broader societal concerns about pain management and the use and risks of powerful opioids.
⛓ NFTs & Collectibles
Models, celebs and NFTs – Club Necaxa has been all over our social feeds this week after doing a $1.5m blockchain ownership sale using NFT technology. The winning bid came from North America, and was one of 12 to meet the $1.3m reserve price. In this ep of the Sporticast podcast, Scott Soshnick and Eben Novy-Williams chat with real estate investor Al Tylis, a minority owner in MLS club DC United and one of the new American investors in Mexican soccer team Club Necaxa. Tylis discusses the growth trajectory of Liga MX, the most-watched soccer league in the US, and how the investment dovetails with his thoughts on the future of MLS.
What's All the Fuss About NBA Top Shot? – NBA Top Shot (a partnership between the NBA and Dapper Labs, a blockchain company with a history of highly trafficked marketplaces) is, in its simplest explanation, an online forum for trading virtual basketball cards. Fans can buy and sell video clips of their favourite players, called “moments,” from recent seasons. These moments exist on the blockchain—essentially, a digital record book kept using cryptography—which makes them unique, impossible to counterfeit and immediately authenticated. And they can be procured from one of two places: directly from Top Shot, in the form of limited-edition packs that sell for anywhere from $9 (for a pack of common cards) to $999 (for one that could contain some of the rarest in the game); or in the marketplace, where moments opened in the aforementioned packs can be swapped between users for cash.
If this all sounds novel, know this: it’s not the first such partnership with a professional sports league. It is, however, easily the biggest. Welcome to a world where millions of dollars change hands over virtual trading cards; where shutdowns are common, money is hard to withdraw, and a potential for evil-doing complicates everything.
The King Of Cards – In November 2020, Goldin Auctions sold $16m worth of sports memorabilia, a personal record at the time. In January 2021, Ken Goldin booked $36m, more than he’d done in all of 2019. For March, Goldin had a bigger number in mind: $40m. Thousands of potential buyers had started placing bids that week on more than 2,000 items, including a bat used by Cal Ripken Jr, sneakers signed by Michael Jordan, and at least five trading cards Goldin thought could earn more than $1m each, including rookie cards featuring LeBron James, Kobe Bryant, and Roberto Clemente. On auction day, Goldin speaks with only a handful of buyers and sellers, serving for those VIPs as part financial adviser, part therapist. He sets expectations for sale prices, counsels on when to bid and hold, and calms nerves as prices escalate. By the time the extended bidding session closed just before midnight, Goldin had sold $41m in cards and memorabilia.
The article does a good job of walking us through a day in the life of a collectibles broker (not actually sure if that is the right term as it’s still a job without an official title, which is a sign that it’s interesting and worth digging into).
Fantastec teams up with Dapper Labs for new soccer NFT market– Blockchain-based digital collectibles platform Fantastec SWAP has partnered with Dapper Labs, the maker of NBA Top Shot, to build a new NFT marketplace for soccer. European soccer clubs Real Madrid, Borussia Dortmund and Arsenal, as well as other leading teams, will feature on the marketplace. Fantastec SWAP’s recent collections have included NFTs ranging from distinctive collectibles such as Erling Haaland’s signature from his first season with Dortmund, to iconic moments including Gareth Bale’s wonder goal for Real Madrid in the 2018 Uefa Champions League Final.
Media Titan Fox Launches $100m Fund for Its New NFT Studio – In May 2021, Fox Entertainment first announced the launch of Blockchain Creative Labs, an NFT marketplace of sorts. The media titan said that the marketplace would sell digital goods, including NFTs, “that provide exclusive social experiences to engage and reward super fans.” Now, with a fresh $100m, Fox Entertainment and its animation studio, Bento Box Entertainment, are doubling down on these ambitions.
💰 Venture capital & angel investing
Podcaster-turned-VC Harry Stebbings raises two funds totalling $140m – Stebbings is announcing that he’s now raised two 20VC funds – a $33m early-stage fund and another $107m growth fund – which he will lead as a solo general partner. His investors are a notable bunch , including institutional investors MIT and RIT Capital Partners; founders of many tech companies, from Atlassian, Unity and Mercado Libre to Calm, Alan, Rappi, Hopin and Nubank; alongside prominent VCs and angels, like Index’s Danny Rimer and Prima Materia’s Shakil Khan.
So what magic do they see in this boy wonder? The simple answer is the network he has built up through his podcast. Since launching in 2015, he’s produced over 2.6k episodes and regularly speaks to the kind of founders and investors folks in the tech industry would kill to sit next to at a dinner party – people like Spotify’s Daniel Ek and Coinbase’s Brian Armstrong. This isn’t strictly sports related, but it makes the cut here to highlight the importance of network effects in raising capital and sourcing deal flow.
David Beckham Did It for the Trucks – Lunaz Group says that the celebrity footballer had purchased a 10% stake in its business converting Rolls-Royces and Bentleys into electric vehicles. It wasn’t the Bentleys, Jaguars, and Rolls-Royces running on batteries that clinched the deal for Becks. It was the trucks.
Utsav Somani on angel investing – Great tweet thread on the do’s and don’ts of angel investing from veteran investor Utsav Somani:
🎮 esports
Hackers Steal Wealth of Data from Game Giant EA – Hackers have broken into gaming giant Electronic Arts, the publisher of Battlefield, FIFA, and The Sims, and stole a wealth of game source code and related internal tools. In all, the hackers say they have 780gb of data, and are advertising it for sale in various underground hacking forum posts.
New FBI Unit Emerges Targeting Sports Corruption Including Esports – The Feds appear to be getting more involved in the still-developing story of match-fixing within esports. A new FBI unit will focus on sports corruption-related crimes. Esports is already massive but it’s still maturing – increased scrutiny from the authorities is inevitable.
🖼 Big picture stuff
CVC in talks to set up $4bn global tennis group – CVC Capital Partners is in talks over a $600m deal that would bring together the men’s and women’s pro tennis calendars and allow the private equity firm to buy into the sport. Under the proposals, CVC would take a 15% stake in One Tennis, a new entity set up to manage media and data rights for both tours, valuing it at $4bn.
The USFL, Long After Notorious 1980s Meltdown, Will Attempt 2022 Comeback With Fox Sports – The United States Football League, which challenged the NFL’s dominance in the 1980s before collapsing after just three seasons, will attempt a comeback in the spring of 2022. Fox Sports has signed on as official broadcast partner for the USFL and also owns a minority equity stake in the company that is resuscitating the league. The new league will feature 8 teams that will retain the names of the original USFL. It’s set to compete with the rebranded XFL, also scheduled to begin in 2022. That’s a whole lotta football.
⌚️ Wearables
Apple Has a Decade-long Lead in Wearables – Apple recently unveiled one of its more remarkable pieces of technology. AssistiveTouch allows one to control an Apple Watch without actually touching the device. Instead, a series of hand and finger gestures can be used to control everything from answering a call to ending a workout. It’s just the latest example of how Apple’s lead in wearables is still being underestimated. The evidence points to Apple having a wearables lead of not just a few years, but more like a decade.
⛹️♀️ Women’s basketball
Women’s Basketball is on the Rise. Is Anyone Paying Attention? – LeBron James and Steph Curry are household names and brand magnates, but Diana Taurasi and A’ja Wilson haven’t quite reached that level. That’s despite being, respectively, the WNBA’s career top scorer and reigning MVP. And it’s despite the average viewership for the 2020 women’s basketball finals shooting up 15% from the previous year – while the men’s finals saw a 49% drop (a stunning figure). In a sport that’s beloved and at a time when female athletes are raising their profiles (think Naomi Osaka and Megan Rapinoe), why isn’t the WNBA. minting superstars? That’s a question Cathy Engelbert, the league’s commissioner, is grappling with.
Google’s Kate Johnson on partnering with the WNBA and investing in Women’s sports – Google, as part of a multi-year agreement with the WNBA, has committed to providing business support and elevating the visibility of the league and its players. Kate Johnson, Google’s director of partnerships for content and sports media, was at the centre of the negotiations. In this interview, Just Women’s Sports chats with Johnson about the origins of the partnership, the importance of collaborating with a media company, and the decision to get involved in women’s sports.
💥 Innovation
Five sport ‘incubators’ that can help businesses get ahead in 2021 – A quick overview of the major sport ‘incubators’. These guys do so much for the SportsTech ecosystem, and they’re a useful source of deal flow for angel investors seeking to connect with visionary founders operating at the forefront of sports innovation.
Interview with Prashanth Peketi, Sports & Innovation Professional at Adidas – Prashanth Peketi works at the intersection of new technologies, materials, and manufacturing processes to create high performance footwear for sportsmen and elite athletes. In this interview, he talks to Shyam Krishnamurthy from The Interview Portal about combining his love for science (materials) and sports for a career in Sports Engineering & Innovation. I got a lot out of it.
😷 Pandemic related
Tracking the Return to Normal – After going to incredible lengths to return to play, sports properties and teams continue to face major challenges as the pandemic drags on. Chief among them is the limited ability to host fans in stadiums and arenas. Gate revenue alone has accounted for more than a quarter of the overall pie in recent non-pandemic years, excluding related items like concessions, parking and on-site sponsorship. Sports properties will need to provide fans with peace of mind about coming together in stadiums and arenas as soon as they are able to re-open their doors. In this highly visual piece, Morning Consult tracks Americans' comfort attending sporting events in light of the COVID-19 pandemic.
📺 Streaming & media
Sports is the Driving Force Behind Disney’s Revenue Boost – In May, Rita Ferro, president of Disney advertising sales, said an upfront priority of Disney’s was “leaning into the unrivaled breadth and depth of our sports portfolio.” In the last year, the Mouse (which owns streaming services Disney+, ESPN+, and Hulu) has done just that, announcing:
7-year deal with the NHL for linear and streaming platforms, reportedly worth $400m per season.
11-year deal with the NFL that includes two Super Bowls, more regular-season games and a playoff game for $2.7bn per year
7-year deal with MLB for roughly $550m per year.
ESPN+ bought rights to the English- and Spanish-language coverage of LaLiga at $175m per year.
They've certainly put their money where their mouse is (apologies).
Sinclair reportedly raising $250m for their Bally Sports streaming service – It’s presumed that legalized gambling is the way forward for the 21 regional sports networks (hence the Bally Sports rebranding). But it sounds like streaming could be a key part of that puzzle as well. According to the New York Post’s Josh Kosman, media business Sinclair is working with investment bank LionTree to raise more than $250m for a streaming service that would broadcast games for which they have exclusive rights.
TrillerNet Prepares to Go Public Via Direct Listing – TrillerNet, owner of streaming and video app Triller, is preparing to go public through a direct listing. The company is looking to raise $500m from private investors for a 10% stake in the company. Once on the market, it is aiming for a valuation north of $5bn. Triller has leaned into sports, particularly combat sports, as it broadens its focus beyond short-form video toward streaming live events.
🎰 Sports betting
Reddit Founder Invests In Growing Sports Betting Market – Wagr, an app for casual sports bets among friends, is raising $4m, with Reddit co-founder and investor Alexis Ohanian leading the charge. Ohanian is investing through his VC firm, Seven Seven Six. The seed-funding round includes contributions from Tinder co-founder Justin Mateen and former Saks Inc chairman and CEO Brad Martin. Wagr is part of a rising wave of small but formidable sports betting and fantasy platforms bringing in the money as the $30bn US online sports betting market expands.
Kevin Garnett Launches Media Startup to Cover Sports Betting and Gaming – NBA Hall of Famer Kevin Garnett has co-founded Gaming Society, a new media company to cover sports betting. Gaming Society will create content that aims to simplify sports betting terminology for casual fans while enticing readers with rewards, prizes, and gamified content. The company’s weekly newsletter will offer sports betting insights through data, athlete analysis, and sports trivia contests.
🏃♂️ Performance
These biohacking tricks give the world's best footballers the ultimate kick – Lewandowski's age is 32, Ronaldo is 36, and Ibrahimović 39. What is going on in the world of football? Are older players just getting better? Is this the start of a trend that will change football forever? Footballers will, in future, enjoy careers that last much longer than in the past. And this very definitely has something to do with one word we hear increasingly often: biohacking.
All the passes – a beautiful and very soothing visualisation of circa 1 million passes from 890 matches played in major football leagues and cups.
🎟 New sports
The future of sports is algorithms, not athletes – Hyperbolic title, interesting article. This is a provocative piece from Inverse on RoboCup and its implications for sports. The conclusion? “From fantasy leagues to biometrics, sports is becoming its own cyborg.”
Airspeeder wants to make electric flying racing cars a reality in 2021 – While much of the eVTOL (which stands for Electric Vertical Takeoff and Landing) industry has its sights set on urban air taxis or cargo transportation, entrepreneur Matthew Pearson had another idea: electric flying race cars. So in 2019, he founded two companies, Alauda Aeronautics to manufacture the aircraft, and Airspeeder, an international series to race them. Now, Airspeeder says it has completed the first test flights of the debut electric flying race car and is poised to host the inaugural race of its EXA series this year.
That’s all folks. Wishing you a great weekend in front of the Euros (or whatever else gets you going). Drink, be merry, just don’t imbibe any Coca-Cola. Cristiano says so…
Cheers,
Ed
—
Edward Rhys
Founder & CEO / Skin In The Game
www.skininthegamegroup.com
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Skin In The Game is an angel investing group connecting investors with visionary SportsTech startups. We provide a regulated platform for fans, athletes, entrepreneurs and brands to collaborate and co-invest. By investing in SportsTech we can unleash the full potential of sports, enriching the lives of people everywhere.
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