‘Moneyball’ Meets TBED: Sports Look for Advantage Through Innovation

In Moneyball: The Art of Winning an Unfair Game — a New York Times bestseller by Michael Lewis from 2003 – the author focuses on the successful approach of Major League Baseball’s (MLB) Oakland Athletics and its general manager Billy Beane’s use of an analytical, evidence-based, sabermetric approach to assemble a competitive baseball team. Conventional wisdom of the time focused on traditional scouting and non-advanced statistics. While Beane and the Athletics were early-movers in the infusing of innovation, science, and technology into the industry of sports, others have rapidly caught up and are making large investments in companies and partnerships. In 2014, venture funding for sports tech startups reached almost $1 billion – an increase of 30 percent from 2012, according to Tech Crunch.

In addition to the investments made by venture capital firms, CIO.com reports that pro sports franchises, leagues, and others businesses are turning to startups to spur in innovation in industries such as analytics, big data, biometrics, sports performance and sports sciences. In addition to the goal of increasing competitiveness, a 2015 study from Deloitte found that sports entities also investing heavily in consumer products that both increase the engagement of fans and their event experience. Over the last year, several sports entities have entered the world of tech-based economic development by investing in and supporting startups as well as building university-industry partnerships that go beyond apparel licensing contracts.

In April, the National Basketball Association’s (NBA) Philadelphia 76ers announced the creation of the Sixers Innovation Lab as part of a new state-of-the-art basketball training complex in Camden, NJ – a program for startups in the areas of sports and consumer products. In each cohort, the Sixers Innovation Lab will provide six startups with office space, mentors, business services, and the opportunity to pitch to venture capital and other investors. According to the press release, the Sixers Innovation Lab also is intended to “cultivate an entrepreneurial spirit and foster innovation while connecting and energizing the business communities in southern New Jersey and Philadelphia, by attracting and retaining top-tier entrepreneurial talent to the region.” Partners include the University of Pennsylvania’s Wharton School of Business.

The 76ers join the Los Angeles Dodgers as pro-franchises launching startup-support programs. Established in 2015, the Dodgers Accelerator focuses startups that are “using technology to build sports and entertainment-related products and services.” Similar to the Sixers Innovation Lab, the companies address a spectrum of industries including “community sports, athlete recruiting, advanced analytics for fantasy sports, team and athlete performance management, peer-to-peer fantasy gaming, next-generation customer analytics, live-event POS, social fan polling,” according to Geek Wire. The Dodgers and its partners invest up to $120,000 and provide companies with three months of mentorship, services, and space. After completing its first round competition in late 2015, the Dodgers Accelerator 2.0 was announced in late March and will run during the summer of 2016.

Sports franchises are not the only sports entities to provide startup support for companies that will increase the human performance or consumer products. In 2012, Nike created the Nike+ tech incubator to help develop startup companies around Nike’s sports performance products including the Nike+ platform. The three-month program provides mentorship, product developments, and $20,000 to teams of developers to develop products and services that motivate athletes to increase the sports performance and consumers to live more active, healthy lifestyles.

Under Armour, another sports-apparel performance company, has announced support for entrepreneurship through partnerships with two universities. The Baltimore-based company recently announced a 10-year $86 million sponsorship deal in April with the University of California-Berkeley. The contract goes beyond the typical sponsorship deal focused on official apparel licensing rights to include a campus-wide relationship that includes student internships and employment opportunities as well as collaboration in the areas of entrepreneurship, philanthropic, and corporate social responsibility.

Under Armour has a similar long-standing relationship with the University of Maryland. In addition to apparel sponsorship, the company has invested heavily in the university’s innovation and entrepreneurial ecosystems including sponsoring the school’s Academy of Innovation and Entrepreneurship. The center is part of a larger sports-medicine complex that also houses the school’s football team. The company also partners with European football clubs including a partnership announced in April with the Barclays Premier League’s South Hampton FC to develop innovation that improve sports performance.

Beyond support for entrepreneurship, sports entities are looking toward partnerships with universities to leverage university research expertise. To support manufacturing innovation, ADIDAS announced a university-industry partnership in late 2015 with the Technical University of Munich to “facilitate research and technology transfer in software-intensive systems and services” that are used during the manufacturing process. According to the company’s website, the German government also will provide funding for the project.

Two of the Big Ten schools have announced partnerships to support innovation in the areas of sports and consumer products. In November of 2015, the United States Golf Association (USGA) and the University of Minnesota (UMN) have a five-year research partnership to study and develop solutions to golf’s present and future challenges. Via the partnership, USGA will identify and provide funding to projects that will be undertaken by UMN. The University of Michigan and Hendrick Motorsports (one of NASCAR’s top teams) also agreed to a five-year research partnership in April focused on addressing a variety of challenges facing the coating industry. Product coating plays an important role in both the marketing and performance of NASCAR vehicles.