DAVID STUBLEY: Shaking the Walls of Sport

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The key is to find the nucleus of a successful management team, with proprietary technology, valuable contracts and to build consolidation around that nucleus.

David Stubley,
Broadcast, agency and technology expert. Managing Partner of Sportent Ltd.

David Stubley, has worked for twenty-five years as senior executive within the broadcast, agency and technology sector.

He’s advised some of the industry’s leading brands, investors and rights owners on how best to maximise value from their resources and he tells Sports Media & Finance why he believes pioneering technology and the availability of Private Equity Funding makes this a great time to be building a new generation of highly entrepreneurial sports media business’.

While massive rights deals for the English Premier League, the NBA and NFL tend to grab the headlines, there is another sector of the sports media industry which currently has investors salivating at the prospect of significant new revenue streams and of building a new generation of world-class businesses.

It’s a sector which is currently front of mind for David Stubley, former head of business development at UK broadcaster Channel 4, Chief Executive of WPP’s Performance consultancy and now an advisor to and board member of a portfolio of sports and entertainment media businesses.

It is a portfolio which reflects Stubley’s interest in companies which find ways of breaking the mould of the sports business and discover new ways of becoming more relevant and, consequently, profitable in an age where the expectations of both consumers and the brands which want to reach them have changed for ever.

Among his roles, Stubley is a Director of ChyronHego, a company formed by last year’s merger of the US-based TV graphics business Chyron and the Swedish company Hego which owned a majority share of TRACAB, the most advanced player tracking system – and at the root of a wealth of enhanced broadcast, products including analytical replays, powering ‘virtual stadia’ and increasingly providing essential performance data for scouts, coaches and the betting industry.

This week ChyronHego announced the completion of the $114 million acquisition of the company by US specialist Private Equity company Vector whose managing director David Fishman spoke of his belief that ‘ as a private company, with Vector’s financial support, ChyronHego will be well positioned to capitalize on the significant opportunities in broadcast graphics creation, play-out and real-time

data visualization. Over time, we are confident the Company will be well positioned to capitalize on the exciting trends.

It’s an excitement which Stubley clearly shares.
“The sports-data and broadcast graphics segment is a hot space right now and it is getting hotter”, he said.
“Classically entrepreneurs would get to first base – establishing proof of concept – perhaps with the help of angel funding and then take in various rounds of venture capital to build the business before either a trade sale or maybe IPO.
What we are seeing right now is Private Equity driving consolidation and providing the necessary growth capital for a new generation of digitally savvy entrepreneurs to pioneer what I like to call sportsmarketing 3.0.”
, he explained.

ChyronHego is far from alone in attracting PE interest. In the past year the Norway-headquartered 3D graphics company Vizrt has been acquired by Nordic Capital for around $370 million, while STATS Llc was acquired by Vista Equity Partners for a reported $200million.

Then of course, there is Perform the British company which had done so much to pioneer this new 3.0 segment by developing services for both linear media, digital and social channels as well as the sports betting market and data market. “There is no shortage of available Private Equity funding for deals in the space as long as the transaction size is in the sweetspot and the growth trajectory is clear; the one issue is that sometimes target companies are too early stage”, he said.

“The key is to find the nucleus of a successful management team, with proprietary technology, valuable contracts and to build consolidation around that nucleus. I think we really saw a good example of it from Perform on their booth at ICE recently. It was one of the first time’s I had seen a company with a really joined-up story, taking clients on a journey through their acquisitions in technology, rights content and data”.

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“Unfortunately some companies in the sector have struggled to achieve that. They are doing great things and building break-through technologies, maybe then securing proof of concept contracts, but many then struggle to translate that to to the bottom line.

“One of the reasons for this is that they don’t have; the available working capital and have been forced to desperately chase the next project just to pay the bills and invest in the next iteration of the technology they are developing. Secondly, it’s because they just haven’t got enough good people or more often, can’t keep them. Thirdly, without being disrespectful, some in this sector, were created by brilliant engineers who are focussed at what’s under the hood and not necessarily so adept at finding a market for their invention”, Stubley said.

Whatever else might be under the hood, the consistent factor is sports-data maintains Stubley, is driving massive change in the way that the sport business has to operate.

“The data space incorporates player performance data, eventing data, data of interest to betting companies, data of interest to media companies, fan-data and of course increasingly purchase behaviour data.. As the sector becomes more sophisticated it is the latter which is capturing the imagination of many rights owners”.

“Historically the cash has been in betting and media data provision but there is a growing understanding that using technology to build relationships with fans who you can then start calling customers is critical”, he said.

IBM for example is currently building a cloud-based, single source CRM platform for the (England) Rugby Football Union (RFU) which will build a profile of everybody who has any touch point with the sport. This will over-time become an enormously valuable asset for the RFU marketing team to exploit. “Other sports bodies in Sports as diverse as Golf, Boxing and Cricket are thinking in the same way”.

By using CRM to engage to buildvast databases of passionate communities communities of interest.
This, says Stubley, has potentially far reaching consequences for those sports marketing agencies which don’t move in step with technological change and adapt to the needs of their clients.“The growth of digital media makes so much possible and enables rights owners to offer brands a a highly targeted business development platform, and to negotiate performance related deals which drive bottom line profit”.Increasingly, the 2.0 sponsorship currency of driving brand awareness, B2B engagement and brand advocacy is being aligned to the creation of genuine business partnerships.“The problem for agencies who stand still and don’t engage with this market shift l is that client briefs will start to go to next generation 3.0 agencies or even the management consultancies experienced in digital direct marketing”.As chairman of the London-based sponsorship consultancy Generate it is an area Stubley is particularly familiar with and, he says, agencies also have to also learn to think differently about the way they are remunerated.“They have to start to consider performance based client relationships and building their own Intellectual property”, he said.“Last year for example Generate ran a series of outdoor concerts with Paul Weller headlining at Warwick Castle, an event for which it part-owned data, sponsorship, content and hospitality rights as well as acting as promoter for ticket sales.The point is that you can monetise such Events through a long-tail content strategy and agencies are expert at this.
Traditional promoters don’t really get that so much”.

And it is that quest for new ways in which technology is opening up new revenue streams which excites Stubley the most.

“Stakeholders are beginning to understand that if you can capture Official sports video & data content in tandem with the ultimate rights owner and sell it multiple times, into multiple segments, then you’re in an interesting place”, he said.

The move away from a simple rights broking model for the sports sector is, he says, well-illustrated by work being carried out in Northern Ireland where the Northern Ireland League has signed a deal with Trackchamp, a joint-venture between ChyronHego and Bwin.party.

This has resulted in Trackchamp video and data capture technology installed in the grounds of each of the 16 Danske Premiership clubs to provide online streaming for the media, scouting, coaching and betting sectors. With the exception of a handful of games shown on Sky Sports, Northern Irish League clubs receive little television coverage and the online exposure is clearly welcomed by the clubs and their sponsors.

These are, says Stubley, interesting times for new-generation sports media companies but he believes that hunger is among the keys to success.

“What I have learnt from working with both established companies evolving into the 3.0 segment and start-ups pioneering the sector is that you need the restlessness of the intra/entrepreneur and a dogged determination never to give up. You also need highly supportive investors who of course demand that KPI’s are delivered, but also that it takes time for a tech business to succeed”, he said.

He points to his decade-long Chairing of TRACAB, now fully integrated into ChyronHego, as an example of the hunger and spirit on which success is built.

“We worked in an environment where people had to dig deep, where working seven days a week was not unusual and where people were rewarded with stock options which of course had no guarantee of future value”.

“People bought into it and were amazingly dedicated to the company even when we asked the most of them. Amazing organisations have something you can’t bottle or even describe. Employees want to be part of changing the world, doing something fantastic and doing it together. I have been lucky enough to work with a few companies like that and they are unstoppable.”

“This is an exciting time for companies which can align the available PE funds to technology and at the same time uncork that spirit. This is a time of change and of new opportunities for our Industry. The walls are shaking and it’s great”, he said.

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