From Commissioner To Investor
By Adam Grossman
David Stern has moved from commissioner to investor. The former NBA commissioner is no longer focused on growing the business of basketball, but rather looking at the growth that sports technology can have on the entire industry. His latest investment is in a company called Overtime, “a smartphone app that allows for users to record, edit and share short-form sports video content,” which recently completed a $2.5 million seed round announced on Wednesday.
Stern is joining a growing number of sports owners, executives, and current and former players in making investments in everything from virtual reality and mobile apps to eSports and software as a service (SaaS) platforms. This revolution comes at a time when the number of sports-based accelerators looking to help new companies build new technology products or service offerings are increasing. In the past three years alone the Los Angeles Dodgers, Philadelphia 76ers, Minnesota Vikings, and Dallas Cowboys have all created accelerators to make strategic investments in new, growing companies.
What has caused the rise in these types of investments? It is difficult to think of an industry more affected by technology than sports. This includes (but is certainly not limited to) the live digital streaming of games to different devices, the growth of social media to reach fans, the impact of mobile ticketing apps, the use of virtual reality to help players train and improve performance, the implementation of cameras around venues to track player movements, the rise of wearable technologies, and so much more. Success in nearly any position in the sports industry requires staying aware of technological developments and seeing how they directly impact a team, league, event, player, or agency.
This makes these former executives such as Stern ideal investors in rapidly-growing companies for three main reasons: first, these industry experts have been at the forefront of this sports technology wave. They often understand the customer types new companies are trying to target because they either were the customer themselves or have been interacting with fans, media, sponsors, and employees on a daily basis. Therefore, these investors can be critical in product development and can aid in making enhancements that improve the product in a timely manner. Second, these executives have often interacted with people that can become future employees of these growing organizations. Identifying top talent is crucial to the growth of young companies and is often difficult to complete. Third, the network that these executives have developed introduces these young companies to customers that most growing companies would never have access to otherwise.
Sports is often a zero-sum game because there is usually a clear winner and a loser. Investment in sports by industry leaders, however, is a win-win proposition. Young companies benefit from the industry expertise that investors provide, which can immediately impact these growing organizations.
Adam is the CEO and Founder of the sports sponsorship technology and analytics firm Block Six Analytics (B6A,) whose clients include Pepsi, Gatorade, Cleveland Browns, Philadelphia 76ers, and Comcast SportsNet. In addition, he is a lecturer for Northwestern University’s Masters of Sports Administration where he teaches classes focused on developing and communicating strategic insights through data. He has written for Forbes, The Washington Post, The Chicago Tribune, and Comcast SportsNet Chicago and has been featured as industry expert on CNN, Marketplace, SB Nation Radio, and ThePostGame.