Value That Lasts for Sports and Investors: Six Criteria for Sports Tech
Co-authored with the Center for Sports Business Tegernsee (CSBT)
For many investors, investing in sports has traditionally meant investing in a club, a team or a league.
That definition is becoming too narrow.
The sports ecosystem is evolving into a much broader investable universe. Technology is changing how athletes train and perform, how competitions are managed, how content is distributed and how fans interact with their favorite teams. At the same time, sports organizations are becoming more professional, more data-driven and increasingly focused on building commercial relationships with fans that extend far beyond matchday.
As a result, some of the most interesting investment opportunities in sports may increasingly sit around the game rather than in the club itself.
This does not diminish the attractiveness of premium sports properties. But investors are simultaneously looking at a much wider ecosystem of businesses that benefit from the structural growth of sports without necessarily assuming direct sporting risk.
Summary
- Lincoln International and the CSBT analyze trends and share criteria for investors evaluating assets in the sports ecosystem.
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From sports assets to the sports ecosystem
Several areas are becoming particularly relevant, including:
Sports performance technology
Technology is becoming embedded in professional and amateur sports: Athlete performance, coaching, communication, injury prevention, analytics and training are increasingly supported by specialized hardware, software and data.
The attractive businesses in this category often have characteristics investors already understand from technology and healthcare: proprietary technology or data, recurring revenues, high customer retention and the potential to scale across teams, leagues, geographies or even different sports.
Fan engagement and commerce
A fan is no longer simply somebody who buys a ticket and watches a game.
The relationship increasingly extends across content, merchandise, membership, digital communities, hospitality and personalized experiences throughout the year. Businesses that help rights holders understand, engage and monetize those fans can therefore occupy strategically important positions in the sports value chain.
Data and analytics
Sports generate enormous quantities of data, from athlete and performance data to fan behavior and commercial analytics.
The investment opportunity lies not simply in owning data but in turning it into products and workflows that customers are willing to pay for. Sports organizations are increasingly using fan data to improve sponsorship, ticketing, merchandising, media rights and personalized engagement.
Media, content and distribution
The economics of sports media are also changing.
Streaming and digital distribution are creating more ways to reach fans directly, while rights holders increasingly seek to control the relationship with their audiences. This creates opportunities for businesses providing content production, distribution, monetization and technology infrastructure.
Ticketing and venue technology
The stadium itself is becoming a digital and commercial platform.
Ticketing, dynamic pricing, access, hospitality, payments, customer relationship management and in-venue technology increasingly connect into one ecosystem. The opportunity is therefore larger than selling a seat: Technology can help rights holders increase revenue per fan while improving the customer experience.
What makes a sports technology business investable?
The word sports alone does not create an investment thesis.
In fact, when looking at businesses around the sports ecosystem, many of the criteria that make an asset attractive are remarkably similar to investor criteria in the consumer and technology sectors. The key factors to highlight include:
1
Recurring and predictable revenue
Subscription, licensing, contracted or otherwise recurring revenue is fundamentally different from revenues dependent on individual events or sporting performance.
2
Mission-critical positioning
The strongest businesses solve a problem that a club, league, athlete, broadcaster or fan cannot easily ignore—and ideally become embedded in their customer’s workflow.
3
Proprietary technology, IP or data
Technology can create differentiation. Proprietary data can make that differentiation increasingly difficult to replicate.
4
High retention and attractive unit economics
Growth alone is insufficient. Investors increasingly want evidence that customers stay, economics improve with scale and incremental growth creates value.
5
Scalability beyond one league or sport
A solution developed for baseball that can expand into football, or a product built for elite athletes that can penetrate the amateur market, can dramatically expand its addressable market.
6
A credible path to professionalization
Many sports-related businesses remain founder-led and relatively underdeveloped commercially. For the right investor, that can be an opportunity rather than a weakness, as building professional sales organizations, improving digital distribution, expanding internationally and pursuing acquisitions can create significant additional value.
The consumer and technology playbook increasingly applies to sports
Perhaps the most interesting development is that parts of sports businesses increasingly resemble businesses from other industries.
A fan engagement platform can have characteristics of a consumer subscription business. A performance solution may combine elements of health & wellness and technology. A sports data company can resemble vertical software. A ticketing platform may have marketplace economics. A connected training product can combine hardware, software, community and recurring revenues.
That matters because it changes the investor universe.
A company no longer needs to attract only a specialist “sports investor.” Depending on its business model, the logical owner could be a technology investor, a consumer-focused private equity fund, a media company, a strategic sports platform or an investor specializing in data and software.
And this can be equally important for sports organizations themselves. The right partner may bring much more than capital: technology expertise, international distribution, consumer marketing capabilities, M&A experience or access to entirely new markets.
The opportunity is no longer simply to invest in who plays the game. It is increasingly about investing in the businesses that make the game perform, connect and grow.
