VC insights on the 2024 sports, media and entertainment landscape
As well as producing our own predictions for the year ahead, each year we turn to the industry's leading investors and venture capitalists and ask for their insights, predictions and expectations for sports, media, and technology in the coming year. Below, the leading minds from across the sector share their biggest tips for navigating the year ahead, give us hot takes on where they’ll focus their time in the coming months, and reveal their boldest prediction for the sports world.
Let’s get into it.
Our thanks to:
- Andrew Hippert, investment principal, Techstars Sports (podcast)
- Anthony Bontrager, managing director, West River Group (podcast)
- António Caçorino, CEO & founding partner, APEX (podcast)
- Cordero Barkley, partner, TitletownTech
- Cort Post, principal, Courtside
- Jasmine Robinson, managing partner, Monarch Collective
- Konrad von Moltke, principal, WISE Ventures (podcast)
- Mat Cole, investment director, Edge VC
- Paul Hourigan, partner, Ryan Sports Ventures (podcast)
- Rico Mallozzi, VP and head of platform, Sapphire Sport (podcast)
Let’s dive in.
1. As an investor in the sports industry, what was your biggest learning from 2023?
Paul Hourigan, Ryan Sports Ventures: “It was less of a learning and more of a reminder – businesses with solid and sustainable fundamentals alongside strong and efficient management teams can endure most macroeconomic shifts. Those that focus on the latest trend and unsustainable high-cost growth typically do not. It’s easy to get undisciplined in environments where the cost of capital is cheap, where bad decisions can easily be masked – or even temporarily validated. But we've seen that it's important to maintain a disciplined approach around the type of businesses we back.”
Mat Cole, Edge VC: “There is no doubt that business as usual is gone. The race to build revenues and extract more and more value from the current fan base is a lost cause. We need to look at how we can strip out costs and not reduce the product's appeal.”
Konrad von Moltke, WISE Ventures: “Throughout 2023, with rising interest rates, a struggling public market exit environment and geopolitical instability, there was certainly a dip in venture capital and growth financing. This resulted in a ‘flight to quality’ in all sectors – and the sports industry was no exception. The interesting element to me was the extent to which the market has shifted to prioritise profitability and sustainable growth, over growth at all costs.”
António Caçorino, APEX: “The sports market's strength has become obvious, as it stands resilient in the face of economic uncertainties. Despite challenges, like high interest rates and geopolitical risks, causing a downturn in mergers and acquisitions across various sectors, the industry remains vibrant. The surge in sports M&As is proof of how popular the sector remains, and highlights the belief that teams and leagues possess the abilities to withstand economic turbulence. Recognising this, even financial institutions like Goldman Sachs are establishing dedicated ‘sports franchise’ units within their investment banking divisions.”
Cort Post, Courtside Ventures: “The importance of globalisation for teams, leagues and startups in the sports market. Sports continue to be incredibly popular in the US, but non-US markets represent the largest opportunities for growth for fan bases (especially of premium teams). But true globalisation and catering to global audiences doesn’t happen automatically, so technology, distribution and platforms that can assist will be needed going forward.”
Cordero Barkley, TitletownTech: “The fan experience is evolving along with improved fan insights. Fans drive decisions in every corner of the experience. Their diverse tastes and preferences are impacting off-court elements. In short, the on-field product alone is no longer enough to retain and attract fans. Technology is going to continue to add value by tapping into existing interests beyond sports, bringing new fans into stadiums and expanding the depth of interest for diehard fans.”
2. Who have been the biggest winners and losers from the past 12 months?
Cort Post, Courtside Ventures: “Winners: fans’ choice. In short, fans have more ways to interact with the sports they love than ever. On top of the traditional broadcast that fans are used to experiencing, 2023 saw the rise of alternative commentaries, premium docuseries, and new leagues and competition formats.
“Losers: fans’ wallets. Specifically, as it relates to in-person, live sports. In 2023, many premium sporting events saw noticeable rising costs in ticketing (primary and secondary), food and beverage, merchandising, hospitality and other items associated with attending an event. Made worse by the ongoing inflationary environment, many consumers were priced out of live sports.”
Paul Hourigan, Ryan Sports Ventures: “The biggest winners are those companies that ran efficient businesses with sustainable, scaled growth. While that approach seems self-evident, it’s counter to what VCs were telling startups two years ago, while flooding them with cash to grow at all costs. Companies that didn’t buy into this approach and took the contrarian view to simply run their own playbook will be the true winners. As the old saying goes: calm seas do not make skilled sailors. And I firmly believe that the companies who are born in this most recent environment, and are able to navigate its challenges, will emerge as the best performing we’ve seen in some time. Unfortunately, the converse is also true.
“The biggest losers are those that took unnecessary capital and acquiesced into growing in an unsustainable manner.”
Rico Mallozzi, Sapphire Sport: “There were a lot of winners in sports (team values, player contracts, media rights etc) but one of the biggest has been women's sports. We always knew women’s sports were a great experience, but many are coming to the realisation that it is also a big business. For context, the 2023 Women’s March Madness final attracted a record 9.9m viewers – a 103% increase from the previous year. It was also the most streamed sporting event (women's or men's) on ESPN+ to date. Women’s sports also resonate in particular with younger fans. A recent study by the National Research Group found that 39% of Gen Z sports watch more women’s sports than they did a year ago.
“Attendances at live women's events are also reaching new heights. In March 2022, the UEFA Women's Champions League quarterfinal between Barcelona and Real Madrid drew 91,553 supporters, an official world record for a women's soccer match. As viewership and engagement continues to grow at a rapid pace, we believe there’s potential for a unique and large market opportunity to exist.”
Konrad von Moltke, WISE Ventures: “In a tough macroeconomic environment, founders who are able to sell effectively across multiple dimensions have been the biggest winners. At the early stage, founders need to sell to (1) early customers for pilots and paid customer contracts, (2) investors for important venture funding, and (3) other executive talent to join their startup.
“In addition, companies that can effectively show an AI/ML or personalised product feature function have seen valuation increases and robust investor interest in 2023. While companies who are in competitive spaces, or sectors where others have publicly failed, will continue to swim upstream (for example, Web3, crypto and NFTs). Being able to clearly and concisely articulate your competitive differentiation is key, so founders who can communicate effectively will have a leg up in a capital scarce environment.”
3. Which sectors within the sports, media and entertainment tech will you be spending more time looking at in 2024?
Jasmine Robinson, Monarch Collective: “Our fund is focused exclusively on women's sports. We're excited about women's sports teams, leagues and rights, where we feel like there is strong global growth to come and where strong fan base and monetisation are in place already.”
Cordero Barkley, TitletownTech: “We’ll continue to look at venue technology, player performance, AR/VR, games, and content creation/brand activation, and their broader implications across a bevy of sectors. We’ll continue to apply our ‘sports-as-a-conduit’ approach, looking for companies who may start in sports or entertainment but can be utilised and valued in other industries.”
Paul Hourigan, Ryan Sports Ventures: “Three main areas that personally interest me are: one, women’s sports. Specifically the ability for the infrastructure around the category (media/content, commerce, use of sports technology) to be further developed in a more complete manner, as enjoyed by their male counterparts for many decades. Two, the visualisation and commercialisation of data from player health and tracking technologies (Playermaker, Sportable etc) gaining more mainstream adoption. Three, the evolving consumption habits of fans (focusing more on highlights, shoulder programming, data rich analysis and alt-streams), and how legacy media companies continue to migrate to technology companies like Tagboard to help them meet the consumer where they're spending their time.”
Konrad von Moltke, WISE Ventures: “Fan engagement is my current hot sector. Sports is increasingly global and ‘off premises’, and with the NFL in particular there is a big push towards expanding within Europe and across the world. I'm excited about companies who can engage with fans who may live in different states or countries and may never actually step foot in a stadium, or attend an in-person event. The question is how you make that international fan feel part of the family and community, and also how do you incentivise them to pay attention and spend dollars in what is a crowded sports and media space? Finally, any time there is the ability to invest in a business that controls its own IP from a content standpoint, I will take a hard look.”
António Caçorino, APEX: “In 2024, we've got our sights set on a couple of key sectors. First off, women's sports. Projections indicate that the sector is gearing up to surpass $1 billion in revenue for the first time, marking a threefold increase from 2021. In addition, we’re focused on companies where our athlete investors can make an impact, particularly in the areas of performance-enhancing technologies and data analysis. Finally, technologies geared towards enhancing fan experiences, and the rise of emerging leagues and sports, consistently grab our attention.”
Mat Cole, Edge VC: “Women's sport. I was lucky enough to attend a Chelsea women's home game a couple of weeks back at Stamford Bridge. It's a brilliant family day and a really special product. Young fans can still get relatively close access to the players. They feel ‘real’ and tend to be brilliant young role models. Timing is everything, and as an investor in the space, I think over the next three-to-five years, or two media rights cycles, we'll start to see massive valuations.
“Broadcast. The model is broken. It’s too expensive and has too many headcounts involved – all built around the continued model of subscriptions that's dying. I'm looking at companies like ReCast and XALT, that solve this problem in a range of ways, both from the consumer and publisher sides. Clippd, where I am on the board, is building an incredible data platform that will bring a deep, rich, engaging product to the golf industry. Golf has been in the news all year and is undergoing massive change. However, the consumer experience – from a gaming and broadcast perspective – has been very slow to innovate. Clippd just did a deal with the NCAA that will enable loads of new products for golfing fans.”
4. Which aspects of the sports industry are most likely to be aided or disrupted by AI in 2024?
Rico Mallozzi, Sapphire Sport: “The content production across social, online and for live events will be greatly enhanced from AI. Sports in general are a content gold mine and AI will make content instantly available and shareable across all mediums, and invent new innovative content formats. Whether it be making short videos with Opus Clip, creating audio voice scripts with Eleven Labs, or having AI do live play-by-play with OpenAI, the way content is created, and the velocity of production will radically change.”
Cordero Barkley, TitletownTech: “It’ll be interesting to see how the advertising space evolves. AI’s ability to produce and serve ads to fans in various instances is not new, but those low-touch engagements create brand recognition. They’ll continue to be enhanced and monetised by AI-savvy teams, leagues and brands.”
Anthony Bontrager, WestRiver Group: “Media production, distribution and immersive experiences are all primed to be aided and disrupted by AI in 2024. We’ve already seen the beginnings of this over the past 12 to 18 months and it will only accelerate as more companies leverage Co-pilot and other enabling technologies.”
Andrew Hippert, Techstars Sports: “Player performance will continue to be one of the biggest categories impacted by artificial intelligence. We have a company in our cohort, SIQ Basketball, which is building the smartest basketball in the market, utilising AI and machine learning to track a player's scores, misses and heat maps etc. I think injury prevention will also continue to be aided by the use of AI. Having the ability to quickly diagnose and suggest treatments to prevent recurring injuries will have a positive impact on players and teams.”
5. What advice are you giving to your portfolio companies for the year ahead?
Jasmine Robinson, Monarch Collective: “In women's sports, I think it's all about building with the fan and the athlete in mind. If we can serve those two sets of stakeholders effectively, we can maximise the value created in the long run. Keeping those goals in mind helps keep the magnitude of the growth opportunity to come in women's sports in the forefront of everything we do.”
Mat Cole, Edge VC: “The funding market will continue to be tight but great companies will continue to be funded and embraced. Look for elite talent. Do not compromise on hiring. If I could suggest one hire to make, if you don't already have one, hire an elite strategic CFO – someone who challenges the CEO and sees around the corners.”
Cordero Barkley, TitletownTech: “The market has shifted, the hype cycle is done, and basic business fundamentals outweigh unproven growth potential. With the 2024 [US presidential] election and current geopolitics, there will be more market uncertainty. We’re making sure our founders and their teams focus on fundamentals. Additionally, we’ve been encouraging them to take a hard look at what AI can do to create efficiency in their businesses.”
Andrew Hippert, Techstars Sports: “Conserve cash and extend your runway as much as you can – and focus on getting to that next inflection point. It’s very hard to fundraise right now, so focusing on telling the right story to the right investors is key. Don’t get too caught up on valuation. Sometimes founders become obsessed with this concept and leave money on the table by being stubborn on valuation. You can always walk up valuation with great people on the cap table.”
Konrad von Moltke, WISE Ventures: “When I’m in diligence for a new investment, I’m focused on the other groups around the table, what they bring to the investment, and how that will help the company and founders grow the business. So my biggest piece of advice is to be thoughtful and intentional about cap table construction and round dynamics. A key insight I try to impart to the founders in my network is really thinking through how each investor (and advisor) can complement the rest of the cap table and bring something additive and helpful, by introductions, supporting your growth and providing strategic counsel. When companies are looking to raise capital, founders should craft their story and vision to show how they are uniquely qualified to tackle the problem at hand: what is your unique personal value add – is it lived experience, network, skillset, or something else?”
Anthony Bontrager, WestRiver Group: “Patience. Irrespective of the industry, sales and procurement cycles have tripled over the past year and it will take time for this to revert to mean. Therefore: (a) focus on demonstrating real ROI for customers; (b) don’t let pricing prevent you from landing a logo – you can always address today’s discount during tomorrow’s renewal; and (c) ensure the operating metrics you track truly align with your march to profitability.”
Rico Mallozzi, Sapphire Sport: “Controlled growth and customer centricity. These are great north stars in any period. Public markets are showing a clear preference for ‘Rule of 40’ companies which are higher on growth versus profitability. That being said, you need to have the ability to control the dials of your revenue and expenses in the business, so that you don't get caught in a market sea change that you can't respond to.
“Furthermore, managing strong unit economics (for example, customer acquisition costs and lifetime value) is key to signalling the probability of future profitability. And finally, being maniacal about the customer you serve and exceeding their expectations along their customer journey is paramount. The customer is the judge and jury for any business, so putting them at the forefront of every business decision will help to ensure your company is putting your limited resources to the highest impact initiatives.”
6. And finally, give us your boldest prediction for the sports world (either on or off-pitch) in 2024!
Konrad von Moltke, WISE Ventures: “Vikings win NFC North and have a successful playoff run – SKOL!”
Andrew Hippert, Techstars Sports: “This is definitely a biassed opinion, but I grew up outside of Boston and am a huge Celtics fan. I think Jayson Tatum beats out Jokic for League MVP! I also think the NBA will announce an expansion team in Las Vegas (sorry Seattle fans!).”
Jasmine Robinson, Monarch Collective: “The US/Mexico will win their bid to host the 2027 Women's World Cup!”
Mat Cole, Edge VC: “Ange Postacoglu to be EPL coach of the year. Also, large social accounts will become the D2C leaders in sports content. Look for companies like 433 and One Football to start pay-per-view, interactive content platforms. They have the audiences, and the technology to maximise this is freely available.”
Paul Hourigan, Ryan Sports Ventures: “AFC Bournemouth in the top half of the table by next winter break (a prediction, not a guarantee!).”
Anthony Bontrager, WestRiver Group: “Much of the current advancements in AI will largely be commoditised, forcing many of today’s hot startups to pivot their business models to deliver more ‘AI-enabled’ products and services that solve real world problems, delivering true ROI, as opposed to providing just another LLM or reskinned chatbot.”
António Caçorino, APEX: “It seems padel is gearing up to outshine pickleball as the most buzzworthy racket sport, not just in the US but globally. Despite a mere 200 padel courts in the US, mostly tucked away in private spots, the sport is catching the eye of serious investors, and court construction is on the rise.”
Rico Mallozzi, Sapphire Sport: “Discord and Whatsapp becomes a key strategy in growing international fandom. As US sports continue to push more internationally, they will look to grow their fan bases outside the United States. In order to do so they will focus on platforms such as Discord and WhatsApp to tap into these app’s ubiquity outside of America, and among the younger generation of fans.”
Cort Post, Courtside Ventures: “Premium US sports franchises will begin to prioritise and nurture specific international communities for fanbase and brand growth. You don’t have to look far beyond the NFL’s efforts this season in Europe, or the NBA’s continued expansion into international markets, to see that professional sports are clearly becoming more global, with premium pro franchises starting to identify specific markets they can establish fan hubs.
“Advancements in distribution, content platforms, and technologies that enable localisation will allow teams to scale their marketing and fan engagement activities in a way not previously possible. I wouldn’t be surprised to see premium sports franchises adding ‘chief global officer’ or ‘head of globalisation’ roles in the future (if they haven’t already).”