According to Statista, the global sports sponsorship market was valued at $97.35 billion in 2023.
By 2030, it will double in size.
Why?
Sports events are one of the few places where you can capture a lot of attention at once.
And companies will spend big dollars to do so.
With, new and emerging technology, the way brands and agencies approach and strategize around sports sponsorship has also evolved.
Steve Feuerstein is a veteran sports business executive who has started and been involved with several sports start-ups.
His newest startup SportsBiz, uses AI technology to completely change the game for companies looking to sponsor sports events.
He sat down with us to discuss his background working in sports, how sports sponsorship and marketing have evolved over the years, and his predictions for the industry’s future.
Take me through the initial process of starting SportsBiz. How did you come up with the idea?
Well, it’s certainly been an experiential journey.
I got into the industry after working on Wall Street for a year after grad school. I thought I’d work on Wall Street, which I did at Goldman Sachs and Morgan Stanley, but I knew I wanted to get over to Asia to learn Chinese.
I was supposed to go to Shanghai and ended up in Tiananmen Square on June 4th, 1989.
That was the day that students in the democracy movement in mainland China were assaulted by the mainland Chinese communist government.
I immediately beelined it over to the Republic of China, which is Taipei, Taiwan. I spent a year learning Mandarin there, then I fortuitously got involved in the sports industry when someone asked me if I could help them write a business plan.
I did it for a sports event and lo and behold, I fell in love with the industry.
My first professional sports event ended up being at the time, the largest indoor tennis event in the history of Asia. I then owned and started to accumulate ownership of ATP, WTA tournaments, and National Opens.
After that, I got involved in golf, volleyball, table tennis, and many different sports, but I realized early on that sports sponsorship and the business of sports are very seductive. It’s extremely alluring. It appears to offer enormous value to brands to companies’ sponsors, but in reality, to get the most out of it and to maximize and optimize a sponsorship, is an extraordinarily difficult process.
Therefore, years ago, had the vision to finally build out a business that would remedy these problems through technology.
That’s how I started SportsBiz, which is my sixth startup.
There are other solutions out there. What makes SportsBiz unique and differentiated in the marketplace?
It’s a good question.
There are many wonderful ways in which sports marketing worked before technology and much of it was predicated on human intervention.
When you think about it today, in comparison, some companies are doing the work we’re doing today, but not. So when it comes to the business model, all the work we’re doing in software development is about giving agency to the brand and properties.
The goal is to give the client the ability to input their KPIs, their qualitative inputs and the algorithm gives effective outputs.
The company is called SportsBiz, and our platform is called Deep Sports Solutions. Then we have three product lines falling under the match-maximizing measurement stages of the sponsorship ecosystem.
One is called Brand Match, the other is called Sponsor Max, and our measurement tool is called Asset ROI.
Within each one of those products, fields, and spheres, we build solutions independent a la carte solutions for the client and let them choose what they want.
Our approach is game-changing because we’ve approached it from a sponsor vantage point. Having worked with hundreds of brands, and living their problems for so many decades, our team can then put that into the software, give them solutions they haven’t seen, and give them agency.
So that KPI input fine-tunes what type of response they’re getting. So it’s objective, completely agnostic, and, therefore responding expressly to the needs of the client.
Building any startup comes with its own set of challenges. What are some of those early challenges and mistakes that you made early on?
How many days do you have?
I’ve had the privilege of building a company that was one of the top online athlete representative groups in the world agencies with over 400 athletes, and that startup that was valued at $450 million.
I’ve had startups during the 08-09 recession that we had to put on hold because the environment was just too difficult. So if you had to put them into an analytical sphere, you really can group them.
I’ll share with you what comes to mind.
First of all, you have challenges within yourself. That’s the first and probably most paramount challenge you face, which is you have expectations as a human being as a business person. And you at times don’t meet the expectations you’ve established for yourself.
So the first fundamental is, did you establish reasonable, aggressive, but achievable expectations? That’s about you as the person because the greatest test you’re gonna face as an entrepreneur is overcoming the fact that you’re human. Also, you’re not always going to achieve the milestones you’ve established so challenges are felt, and are faced by you as a person within yourself.
A second challenge is the market, which you have to address and redress. Those challenges, specifically come in the form of how do you, in our situation, build AI-empowered software? How do you build a team that buys into the vision and mission authentically, and organically? How do you fundraise?
Those challenges that you face at the macro level, are so vast, and you must constantly be thinking about what is disrupting the world. What can you disrupt with the tools that you have? How do you integrate the latest technology where it can provide value propositions to the client?
Other challenges relate to human relations. Just a basic understanding of how you maintain and build teams, and secure and retain talent. Maybe your fundraising didn’t come in at the exact time you projected and you have to broadcast that to your team.
So another challenge is that you’ve got to make sure your team is aware, well in advance of what challenges you could face one month, two months, three months down the line, and therefore that they’re prepared to grow with you during those challenges.
Getting back to sports marketing and sponsorships. What do you think are some of the things that companies are getting wrong nowadays when it comes to finding partners and figuring out how to find the right channels to get in front of their audience?
Well, first and foremost, it’s a case-by-case issue.
But so many brands have relied on third-party vendors, and agencies for so long, and they’ve lost control. I’ve seen that for 35 years. They become so dependent on the third party to tell them what to do and they start to lose objectivity.
They become reliant on third parties who have vested interests. Keep in mind that a lot of third-party marketing groups and rights owners have a particular interest in selling what they have. They have a fiduciary obligation to sell what they owe or represent.
So if I represent a portfolio of 10 athletes and person A represents a portfolio of 10 athletes, they’re never going to tell you, “Hey, by the way, I can’t satisfy your KPIs.”
You’ve come to me with an objective in a market let’s say, San Francisco, Chicago, or Boston, but my athletes don’t serve those markets. They don’t say “You should contact Endeavor, Wasserman, Octagon, et cetera.” That doesn’t happen too often. Right?
The reality is the majority of the time, sponsors don’t know if they have optimized their choice of sponsorship. Brands don’t know if it feels like a good fit or if it’s intuitively the right fit. They have no data science behind whether or not it truly is an optimal choice.
We believe that in the realm of technology today.
Data science and artificial intelligence can construe data and serve it in a very elegant, user-friendly fashion that makes sponsorship decision-making meaningful in that brand match stage. That becomes a very useful asset to brands.
Where do you think the industry is headed in the next five to 10 years? Do you have any predictions?
I mean, I’ve been watching the industry for going into my 35th year.
I think it’s going into a stage of more complexity. Anytime you introduce more choices, it’s more complex. So I believe that you’ll have disruption.
This is the most disruptive period in the history of the business of sports. And there’s not an area of it that’s not in the throws of having an evolution and revolution in many cases. I think the industry overall, is going to see an enormous integration of technology that’s going to improve the performance of athletes, in every aspect.
I think you’re gonna see technologies that keep athletes, better equipped and conditioned. And also (teams) using artificial intelligence to forecast trends of future possible tear of wear and tear that the human doctor would never be able to detect.
I think you’re gonna see trends of engagement of sports content in a way that is going to go into the mystical realm with AR and VR when that starts to become much more consumable and, user-friendly.
Ultimately where we’re going, is there will be opportunities with various chips, implants, and retinal implants, that there will be ways to experience sports that no fan has ever experienced before.
I think you can’t write out the metaverse.
We have a strong future ahead in the virtual world and will be able to create intimate, experiential products.
I think you’re going to be able to have the most intimate one-on-one experiences, meetings, and greets with athletes, who will be able to manufacture themselves and be in many places, at the same time, but also have very meaningful experiences as if they were their real selves.
Where can we find out more about SportsBiz and follow you?
You can find us at www.sportsbiz.com and find me on Linkedin at Steve Feuerstein.
