The sports data economy is growing fast – can ASX players get in the game?
Link copied to
Of the industries hit hardest by COVID-19 last year, perhaps none faced as much disruption as global sport.
The Olympics got cancelled, administrators pivoted to games with no crowds, while the NBA finished its season in a purpose-built bubble.
The fallout is that the sector as a whole has gotten a wake-up call, says IXUP (ASX:IXU) CEO Marcus Gracey.
Elite sport is big business. But the threat posed by the pandemic “effectively shone a spotlight on the importance of new revenue streams”, Gracey said.
Whether it’s leagues, individual teams or investors and sponsors, the world’s major sporting competitions share a trait with plenty of other sectors in the digital economy; they generate a lot of data.
“Essentially the question has become – how can we commercialise that data? Because we haven’t really done that very well to this point,” Gracey said.
For IXUP, a data security and analytics firm which primarily has served a client base in banking and insurance, the macro backdrop marked an opportunity to pivot its business model.
In May this year the company announced the strategic acquisition of DataPOWA, a UK-based SaaS analytics platform, for $12m.
The deal was done with the aim of combining both companies’ respective technologies to create a “market-leading sports sponsorship valuation platform, with valuable deep analytics capabilities”, IXUP said.
Earlier this month, the company swooped on the assets of data-sharing platform Data Republic, which was backed by a number of big Aussie banks but went into voluntary administration in May.
Gracey said as an example of its early traction with DataPOWA, the combined group ran a proof-of-concept for a large English Premier League (EPL) soccer team.
“Clubs like that are sitting on a lot of data around things like ticket sales, memberships and their online store,” Gracey said.
“In this case the club said, ‘we’d like to learn more about our customers and what they do and where they live, because we want to make decisions about sponsorships’.
“They want to be able to approach sponsors with more information to make decisions and learn more about who they should be targeting for sales of various products.”
Using IXUP’s pre-acquisition IP around data security, the analytics engine is encrypted, Gracey said.
“So what we’ve got is a platform to run all kinds of data queries and analytics, and demonstrate new insights that have significant commercial value to that club,” he said.
While the sports world may be just catching up to the data analytics practices of software and ecommerce companies, commercial data isn’t the only sector where sports data is being monetised.
ASX debutante HitIQ (ASX:HIQ) is using it for health purposes, taking a data-based approach to concussion management through insights gleaned from its smart mouthguard technology.
While the company’s early goal is to build off its partnership with the AFL to roll its sensory mouthguard product to other global sports leagues, HIQ is aiming to leverage that further by establishing a clinically-backed health platform.
HIQ shares got off to a steady start yesterday and after raising $10m from investors, CEO Mike Vegar flagged plans to deploy the funds towards clinically-backed solutions for concussion monitoring and health management.
Stockhead readers looking for the next growth sector would probably be familiar with the 2018 US Supreme Court decision that legalised sports betting in states outside Nevada.
The company recently appointed Matt Davey as a strategic advisor to help drive its push into the US betting market.
A US-based wagering entrepreneur, Davey founded NYX Gaming in 2011 and sold it in 2018 for $US630m. He’s also a non-executive director of Betmakers, and is the company’s largest shareholder.
“We think there’s an opportunity to apply better tech to sports data, and we’re aware the demand and pricing of that data is going up,” Gracey said.
However, it’s not just being driven by the desire of leagues and team to change their practices in the wake of the pandemic.
“Another significant market driver for sports sponsorships and sports data is the deregulation of US sports betting markets,” Gracey said.
“And what that means is the information around sporting events and elite athletes is becoming much more sought after.”
In a recent investor presentation, IXUP flagged what it called the “strategic intersection” between sports data and sports betting which provides additional market opportunities.
The company’s goal is now to leverage IXUP’s core data security platform with the number-crunching software of DataPOWA to unlock further growth.
“On one hand there’s a need more than ever to share sensitive data and run analytics. And on the other hand you’ve got legislation and privacy requirements increasing rapidly around the world to make that more difficult,” Gracey says.
“It’s a new currency in the sense that on a global level, data has really only appeared as a big deal in the last four or five years.”
“So what you need to do is develop technology that meets in the middle and solves that problem.”
Companies that can do that will benefit from the “new data economy”, he said.
At Stockhead, we tell it like it is. While HitIQ is a Stockhead advertiser, it did not sponsor this article.