One of the keenly attended sessions at August’s Sports Tech World Series in Melbourne was the fireside chat between Vumero’s CEO John Persico and Catapult Sports Chairman Adir Shiffman.
The wide-ranging conversation took in his view of the elite wearable market, the wider sports tech industry and his problem with data.
There was a buoyancy about the conversation because a day earlier Catapult had posted excellent results for the 2018-19 financial year with their share price surging by over 20 per cent on the Australian Stock Exchange off the back of that news.
Catapult reported their first ever positive EBITDA of $4.1 million, an improvement of $6 million, and annual recurring revenue grew by 24 per cent to $66.1 million.
They grew their client base by over 1,100 new teams to 2,970 and most telling they continued to lower their subscription unit churn rate with elite teams.
The results have been a long-time coming and has brought a lot of external confidence back to the business with clear signs that the company’s long-term strategy is paying off.
The conversation started with Shiffman reflecting, “Our own experience is this, and I don’t mean to this to be a dampener on today’s crop of sports tech companies, but it was much easier to build a company in the sports tech sector 10 years ago, even five years ago, because the industry was a cottage industry and it was much smaller. All the mistakes that we made, we could make them without dire consequences.
“We were very lucky when we started getting momentum in this industry and now that we have those 3000 relationships with teams, and growing rapidly, we think there’s an opportunity for us to work with startups that are developing new and interesting things for those teams that we work with and be a bridge and a channel to get access to those teams.
“That was the one thing that was tough for us back then, we didn’t have the luxury of being able to go to them. Everyone we spoke to that had relationships with a lot of teams had already been around for 10 years but they were all focussed on media and they thought dealing with teams was a waste of time and the media was where it was at. The one advantage is we like working with startups to provide some distribution through to the teams that we work with.”
The next question discussed the triangulation of Catapult’s tech stack which encompasses wearable technology, an athlete management system and video analysis.
“We call it the ‘Performance Technology Stack’,” said Shiffman. “Our view is, and it’s not unique to the industry, when you invent a category and in fairness Catapult invented the wearable technology category for elite sport and we hold the patent for that technology still to this day.”
Shiffman then added how the market that Catapult plays in formed. “When you do that all you have is a product to sell and you’re building a market. As you grow you start to get competitors and what tends to happen is you start having to compete on features. It’s the same process in every industry, they come in and they compete on price. That’s the way the market shapes itself and we took a strategic decision early on which is rather than going down the endless road of competing on features, we never want to compete on price, we focussed on maintaining a premium price.”
Going back to working with startups and how it adds to their tech stack, Shiffman added. “There’s all these cottage industries around this space that provide a single standalone product, we believe if we can integrate those products and, for example, help video analysts improve their work flows by bringing the wearable data into those platforms, we can help teams by having this AMS (athlete management system) platform across the bottom that starts to bring data into help both front offices and back offices. That will be very valuable for teams and touchwood that’s how it’s been playing out for us. I think it’s really important to provide an holistic solution and I know there are not universal believers in the industry about it but we are very passionate about it and we think it’s working well for us.”
Catapult’s products deliver masses of data which has filtered its way into the broadcast sphere. Whilst it’s sponsorable content for broadcasters and an added element of storytelling, the question was put to Shiffman whether data monetisation has been a successful strategy for his company.
“Through the AFL we’ve now got a great relationship with Champion Data so the stuff you see in the AFL like the app, the Telstra Tracker which is powered by Catapult data in partnership with Champion. The NRL stuff you’ve seen in the State of Origin, the Telstra tracker that’s powered by Catapult’s data and other similar partnerships around the world,” he said.
“I would say this about data, I’ve read that ‘data is the new oil,’ it sounds great as a quote but I don’t think it’s good to be the new oil. Oil is not a good thing to be and data is not the new oil because the thing with data monetisation is that there are a large number of startups that pitch valuation based on the amount of data that they have and the monetisation opportunities, and I think it’s largely bullshit.
“It’s extremely hard to monetise data outside of services and products that you’re selling directly to clients. I would say that monetising data in broadcast is not a straightforward thing to do, we’ve started being able to do it effectively but it’s not easy or our rivers of gold today. Data monetisation in betting is another thing people speak about because of the legalisation of betting in the US but it’s a hard road. Selling data for betting is tough, there’s lots of probity issues around it, there’s speed and integrity issues. I would say data monetisation is still today is an overhyped opportunity and we haven’t yet across the industry seen it really deliver, Sportsradar and businesses like that have been fantastic and made money out of data but most companies are not.”