Blog Post

Why Sport?

Why Sport?
Thought Leadership / February 14, 2019
Written by , Michael Spirito

In 2004, I spent several weeks traveling Brazil and Argentina. Toward the end of my trip there was a soccer match, contested by two of the top clubs in the Brazilian Series A, in the Maracana in Rio — the iconic stadium that hosted 199,000 fans for the 1950 World Cup Final, and would eventually host the 2014 World Cup Final and 2016 Olympic Final.

At that point, I had never been to a professional soccer match, so, my friend and I secured cheap tickets and decided to enjoy. The scene that unfolded was unlike anything I had ever witnessed:

  • Several hundred thousand people gathered outside a stadium
  • Riot police on horseback patrolling the perimeter keeping the crowds at bay
  • Singing and yelling echoing around the exterior of the stadium an hour before kickoff
  • And inside, a cacophony of spirited chants back and forth throughout the match.

All this for a regular season match in one of the dozen or so biggest soccer leagues in the world — all of which existed outside the United States. At that moment it crystallized for me … sport is much bigger than I ever thought it was.

We announced Sapphire Sport last week, and we did so with the resolute belief that sport is not only an extraordinarily interesting space from an investment perspective, but that it is bigger economically and culturally than we, or anyone, was even giving it credit for.

Let’s call it what it is: Sport is truly global. Sport is a unifying mechanism in our society with  80+% of the world’s population identifying as a sport fan in some manner. In an ever-evolving and, at times, frustrating world, sport is increasingly the one thing people can all agree on, even as we may disagree on our loyalties and rooting interests.

Sport is also massive as an economic driver. Reports on market size have been published, ranging from several hundred billion dollars to over a trillion (and growing faster than GDP) depending on what sectors and geographies are included. The size and scope of the opportunity are more than significant enough for venture capitalists to consider the grounds fertile. At Sapphire, when we talk about “sport,” we are not only considering the hundreds of billions worth of global sports media rights but their underlying distribution mechanisms, and other related areas such as:

  1. Next Gen Media
  2. Digital Health and Fitness
  3. eSports and Gaming
  4. Betting and Fantasy
  5. Fan Engagement & Data Management
  6. Performance Analytics
  7. Digital Commerce
  8. … and everything in between

All of this is sport. And as technology disrupts the global sport ecosystem, Sapphire Sport is in position to match best-in-class technologies to a sport and media customer base working to future-proof their business.

Global sport is getting disrupted by technology in a manner which extends throughout the ecosystem. The scorecard is reflected in team valuations, league and governing-body financial health, media rights deals and global sport sponsorship dollars. These changes are creating new business models and technology platforms that fundamentally change consumers’ experience with sport. From a constituency basis, “sport” means team owners, leagues, governing bodies, brands, financial partners, agency, apparel, media entities and other investors.

Sapphire Sport is fortunate to draw from a limited partner (LP) base that covers these different aspects of the sports ecosystem. Many of our LPs are entertainment brands unto themselves, competing for consumer attention in an increasingly digital world where options abound, and mindshare is increasingly fragmented. Remember, sport at its core is entertainment, and as entertainment brands our partners are looking to create and nurture direct relationships with their fans through technology. Each of our partners is interested in one thing: to build globally relevant and leading businesses that stand the test of time.

Perhaps the best way to encapsulate all of this is through a couple of examples. One of our portfolio companies, Fevo, is a technology business which began in a horizontal space (events and ‘space filling’) yet solves a very real problem for many stakeholders across the sport landscape. Simply put, Fevo is an unconventional payments method, a new category which can be defined as an alternative payment experience for different asset classes, be they live events, attractions, travel, registries, high ticket items, or merchandise that has strong community association like health and beauty brands. In sport, the business is able to partner with both ticketing providers (Ticketmaster) and stakeholders (Team owners and arenas/stadiums) to provide a socially-enabled payments solution. In this way, Fevo’s mission is not only to build a great product that serves a number of different constituents in our world, but also to truly become a category maker.

Another example I like to use is my belief that Instagram is arguably the most important sports media company around. No platform better empowers all parts of the value chain to:

  1. Tell their story with their own media and in their own words
  2. Connect with the exact demographics who are driving disruption in consumer-driven business models, and
  3. Provide a meaningful conduit for both brands and media rights holders to forge connections with fans and customers.

When Instagram came into existence, the idea of it as a sport (or even media) entity was far fetched at best. But it is exactly the type of horizontal technological platform where migration to sport and media is not only possible, but potentially category defining.

I will close with this. I’ve always been a sports fan. As a kid in Rhode Island, when my brother and I weren’t playing sports (often coached by our dad), we were watching them, living our lives through the sports we loved. I sit here typing this in the shadow of the New England Patriots winning their sixth Super Bowl in 18 years. That the hapless Patriots of my youth have become one of the most dominant sports franchises of all time (and almost universally reviled) is still such a foreign, almost illogical thought. But in watching the celebration unfold in Atlanta that evening, I must admit I was more emotional than I expected. Whether that was fostered by the connection to my youth and my family, or just a brief respite from some of the unplanned ups and downs that life can throw at you is irrelevant. Sports are there when we need them most. We are all sports fans in our own way.


Disclaimer:  Nothing presented within this article is intended to constitute investment advice, and under no circumstances should any information provided herein be used or considered as an offer to sell or a solicitation of an offer to buy an interest in any investment fund managed by Sapphire Ventures. Readers should not treat any opinion expressed on this blog as a recommendations to make a particular investment or follow a particular strategy, but only as an expression of an opinion.  Information provided reflects Sapphire Ventures’ views as of a particular time. Such views are subject to change at any point and Sapphire Ventures shall not be obligated to provide notice of any change. No guarantee of investment performance is being provided and no inference to the contrary should be made. Investments referred to above do not necessarily represent investments made by, or all of the investments made or recommended by Sapphire Ventures and were not selected based on the performance of Sapphire Ventures’ investments have experienced, and  are presented to describe investment strategy, or approach only. It should not be assumed that any investments mentioned within the article were or will be profitable or that any investments made in the future will equal the performance of investments identified herein. While Sapphire Ventures has used reasonable efforts to obtain information from reliable sources, we make no representations or warranties as to the accuracy, reliability, or completeness of third-party information presented herein. Past performance is not indicative of future results.