Sidebar: The Sports Tech Godfathers
In the beginning, there was Fanball.
Back in 1993, there was no sports tech industry. Two local fantasy football players, Rob Pythian and Paul Charchian, created Fantasy Football Weekly, which later became Fanball.com. It started as a weekly magazine with stats for fantasy players. The Twin Cities was an early hotbed for fantasy football players.
“It’s always more popular in cold-weather cities,” says Charchian. Charchian and Pythian are arguably two of the godfathers of today’s sports tech companies in Minnesota.
As technology expanded, Charchian and Pythian went online with Fanball.com, which rode the ups and downs of the dot-com explosion and the “dot-bomb” implosion. Fanball filed bankruptcy in late 2001 After rebuilding the company, they ultimately sold to a U.K. group in 2005 for $22 million, including earnouts.
Pythian and Charchian departed in 2007. Pythian went on to cofound SportsData, which was sold to Sportradar in 2013. Charchian launched LeagueSafe, effectively a digital escrow tool for fantasy players playing for money online.
gital escrow tool for fantasy players playing for money online. Another Pythian fantasy sports venture, Minneapolis-based SportsHub Technologies, acquired LeagueSafe in November 2016. SportsHub operates gaming sites and works with media companies to develop interactive games and mobile apps.
In early January, SportsHub announced it was buying the MFL10s line of business—draft software for fantasy players—from MyFantasyLeague. The deal marked the sixth acquisition for SportsHub since it started in early 2016.
SportsHub Technologies founder and CEO Pythian says that local investors are a big reason why the Twin Cities is seeing growth in sports tech companies: “We have a rare mix of supportive angel and strategic investors that are willing to back entrepreneurs,” says Pythian.
SportsHub was also based at the Pitch, but has since moved to the North Loop of downtown Minneapolis. Coming full circle, SportsHub acquired the Fanball name again through the March 2016 acquisition of CDM Sports.
Both are now considered elder statesmen in the business of fantasy sports. Charchian is the current president of the Fantasy Sports Trade Association.
“I talk to a lot of startups and try to offer some historic perspective,” says Charchian. “There’s still tremendous opportunity for people that want to innovate.”
Sports Tech Industry: Where Are Your Stats?
Although sports tech’s stock in trade is metrics, definitive stats detailing the true scale of the emerging sports tech industry remain elusive. Data for subsets is available, however. The sports analytics market alone has been growing at about 40 percent a year. Smart sports products and other fitness wearables accounted for $3.5 billion in 2014, which is expected to grow to $14.9 billion by 2021, according to a recent study commissioned by Market Reports Hub.
A recent report from Deloitte explains this growth by the proliferation of alternative ways people can watch pro sports events and how these new methods also allow for new kinds of engagement.
“For example, 52 percent of all sports fans say they will use a smartphone or a tablet to access sports-related content while watching televised sports, up from 36 percent in 2012. Moreover, 66 percent of devoted fans go online at least once a day for sports content,” the report says.
Accessing real-time updates and highlights on social media also is growing rapidly: “The overlap of mobile, digital and social media technology is not only changing the way sports is consumed but is also allowing fans to get in on the action.”
Greater participation is also being fostered by online fantasy leagues, which are now multibillion-dollar subsectors. The fantasy football market is estimated at $40 billion and $70 billion a year.
The sports tech sector in the Twin Cities is largely a guy’s game. One notable exception is Minneapolis-based Sportsdigita, founded and led by Angelina Lawton. The company offers teams data and digital tools to improve marketing, ticketing and social media presence.
Lasting Impressions from the Pitch
Many of the companies highlighted in this story shared co-working space at the Pitch, a short-lived sports tech incubator next to Sport Ngin’s office in northeast Minneapolis.
Sport Ngin helped create the concept to help local startups, just as the company was about to be acquired by NBC Sports. A June 2016 press release for the Pitch outlined ambitious goals calling it “a sports tech innovation center designed to be the nation’s hub for cutting-edge sports tech startups, businesses, entrepreneurs and developers.”
But the space closed at the end of December, after an 18-month run. SportsEngine (Sports Ngin’s new name) needed the space to accommodate continued growth, says its co-founder, Carson Kipfer. The Pitch program will still offer networking and mentorship for aspiring sport techies.
“At its height, we probably had 70 people in here,” says Kipfer. “Probably 15 companies were represented in some capacity.”