It doesn’t matter whether it’s real-estate or a new clothing line, owning a media studio or investing in blockchain; the modern-day athlete has the power to influence markets outside of their respective sport and, in doing so, build an investment portfolio that provides them with financial stability throughout their career and after they retire.
If we take a step back to consider the bigger picture, just as digital media has supported sport’s commercial growth and helped build athlete brands, the sports industry is now shaping the industries that have, for so long, underpinned its success.
For example, the proliferation of over-the-top (OTT) content in recent decades continues to redraw the media rights map today. Direct-to-consumer (D2C) platforms provide sports properties with fresh ground to diversify their content distribution and commercialize digital viewing experiences among new fans and in new markets.
In return, whereas digital innovation enables sports rights holders to personalize the fan journey and diversify value drivers within the organization, tech companies are also becoming increasingly reliant, in equal measure, on sport’s growing commercial appeal among consumers, so as to build advocacy for their products.
This is true for athletes too, with many of sport’s household names capitalizing on the flourishing sports technology market by getting in at the ground level and investing in early-stage startups, as well as some established brands, they believe have the capacity to become sustainable, mainstream commodities.
For example, FC Barcelona and Spain footballer Gerard Piqué’s sports and entertainment company, Kosmos, launched in 2017 with a simple directive: to invest in “impactful ventures” that challenge the status quo. In February, Kosmos launched a new Kosmos Global Capital division, based at its offices in Barcelona, to invest in projects within the sports sector, highlighting how athlete-led tech investment has the capacity to shape the future of the industry.
While athletes are investing heavily in the tech space, they are not only advocating technologies that could disrupt the future of sports. They also represent an evolution in sport’s relationship with the technology sector itself, and how sport – including the commercial appeal of its athletes – continues to shape the technologies consumers use today.
For that very reason, sports properties should take notice of how their most-valuable athletes invest, so as to better understand the technologies that serve the athlete, but also the behavior and trends of consumers they attract, and how the athlete influences modern markets. With more fans growing up in digital-first households, athletes recognize the impact of technology on young and future generations.
ATHLETE ADVOCACY OFFERS VALUE TO TECH SECTOR
According to The Business Research Company, the value of the global information technology (IT) market will increase from US$8.38 trillion in 2021 to US$9.32 trillion in 2022 at a compound annual growth rate of 11.2 percent. By comparison, the sports technology market is worth more than US$18 billion globally, according to Markets and Markets, while forecasts predict the sector will surpass US$40 billion by 2026, at a predicted CAGR of 17.5 percent. This is persuading investors to get behind the sector early.
For example, setting their on-court accolades aside, National Basketball Association (NBA) icon LeBron James and former world tennis No.1 Naomi Osaka are among sport’s leading figures to invest in the sports tech sector, including backing for StatusPro, the sports technology and gaming company founded by former National Football League (NFL) player Andrew Hawkins.
Speaking in November, Hawkins said that it was “incredibly humbling that pioneers of their level” showed faith in his company, which partners with multiple NFL teams, the National Football League Players Association (NFLPA), and NCAA collegiate teams. He added: “Besides the immense credibility our new investors bring to the business, they have proven the value of creating companies and brands that prioritize empowerment, diversity of thought, experience, and culture. These are some of the guiding principles of our business.”
Elsewhere, in June, British heavyweight boxer Anthony Joshua acquired a stake in DAZN as part of a deal that will see Joshua’s future fights broadcast via the sports streaming platform globally. “I’ve been working with DAZN and following its progress for a long time,” Joshua said. “We have enjoyed a really successful partnership in the US for many years and I know the team and understand the passion and drive of the business.”
Shay Segev, DAZN’s Chief Executive, added: “AJ is a hugely popular and influential sportsman. His alignment with us and his investment in our business speaks volumes. This deal is his seal of approval for our vision and our direction as a business.”
DIGITAL ADOPTION DRIVING SOCIAL CHANGE
Athletes are powerful ambassadors. Not only do they offer significant capital to help fund fledgling companies, but an athlete also brings other assets to the table too, including, most notably, access to connections and decision-makers within the sports industry that other investors may not be able to attain.
By building an attractive brand that their fans and sponsors can relate to, athletes are also positioning themselves as ambassadors for social change and use their platforms (and investments) to support innovations they believe can have a positive impact on society. In addition to sports-related technologies, more athletes are combining their passion for investment with the causes that are close to their hearts.
Among the athletes investing in this way, NBA star Kyle Lowry said in March 2021 that, outside his sport, he had begun educating himself about the technology industry and how it can support positive change for people and the planet, including within healthcare and renewable energy.
Speaking to Business Insider, he said that, by building generational wealth, he also hoped to break down systemic barriers for people of color. Adding: “Getting the African-American, the Black person, into those types of positions, it changes the outlook of the culture. It changes the thought process of who these people are.”
With an appetite for working with innovators that support this vision, athletes are becoming premium stakeholders for companies seeking to make a difference in the world, and particularly within the tech space. For example, global tennis icon Venus Williams, who owns her own lifestyle clothing brand, EleVen, says she wants to invest in companies “solving real problems and meeting real needs in a creative way”.
Speaking with Inc, Williams explains that there are many factors at play when it comes to deciding on whether to invest. She says that sometimes it depends on “the vision” of the company, while with others it depends on the industry they represent. “Sometimes it’s the opportunity to advise or mentor or contribute,” she continues, adding that finding joy in a project is just as important as its return on investment (ROI).
WHAT’S N3XT?
What does this mean for the sports industry at large? It’s no secret that athletes are attractive commodities for brands attempting to make a name for themselves. It’s not uncommon either for athletes to invest in burgeoning industries.
It’s true that the technology sector is going from strength to strength, but the tech sector will continue to evolve, meaning that we must also be mindful that the technologies investors back today – while innovative in their own right – won’t necessarily be the ones that consumers need in the future.
Therefore, it’s important to recognize sport’s role in promoting innovation and how it prepares itself today for changing consumer demands. This includes the role of its assets – including its athletes and stakeholders – to support technologies that serve a purpose both inside and outside the industry and to understand how the rights holder can utilize these technologies themselves, for the benefit of the business, alongside their fans and global partners.
There’s no doubt that sport is an entertainment industry. However, as its athletes take more interest – and ownership – in other sectors that matter to the public, sports rights holders must therefore educate themselves around the ongoing digital revolution, too.
Not only to stay relevant among digitally native fans, but to stay in tune with the changing digital landscape. By advocating technologies that support and assist global change, they will in turn help make the sports industry more inclusive and sustainable moving forward.
To find out more about how N3XT Sports can support your organization’s digital transformation and learn more about the changing technology industry, please fill out the form below and we’ll be in touch. We look forward to hearing from you.