Apple + MLS; A New Paradigm for the Sports Industry

Last month, at Sportico's "Invest in Sports Summit," I had the opportunity to spend time with Major League Soccer Don Garber. We were on stage, asking each other questions about our respective businesses.?It was fun. Don and I are longtime friends. ?

We dove into the league's recently announced Apple partnership. It is a bold move by the Commissioner and one the sports industry may look back on as a watershed moment. 苹果 has revolutionized personal computing, music, media, and communications and may now be doing the same in sports.

Think about it. In the same way a music fan can carry millions of songs in their pocket, soccer fans can have every MLS and Leagues Cup match wherever and however they want without any local blackouts or restrictions. Apple, in turn, benefits by tying the new MLS streaming service on the Apple TV app to all MLS full-season ticket packages, thereby creating more interaction with one of the youngest and presumably very tech-savvy fan bases in sports.

This deal - and others like it between leagues and streaming services – more closely resemble a sponsor-like relationship than a traditional media bundle in that they are created to drive transactions and commerce. For example, MLS can analyze the viewership data and schedule matches when it best suits their fans vs. navigating the complexity of broadcast and linear cable competition.

It also underscores how a new level of sophisticated data capture and analytics is behind leagues' strategic shift in focus to maximize the lifetime value of their fans. We beleive that this shift is how the future of the sports industry will be shaped. For instance, the more an MLS fan journeys through Apple businesses, the better understanding both entities will have about their interests. From that may come new MLS products and services, the type of offerings that would never have been conceived when sports consumption was a group of people gathered around a living room TV.

This is all part of a larger industry transformation that I describe as "Channel Change" which occurs when traditional distribution models are disrupted. While working at Portman Companies early in my career, we had a large trade show business (among many others). I saw what happened when big box retailers like Walmart and The Gap entered the retail industry to compete and eventually overtake the local mom-and-pop shops.?I described that disruption as "Channel Change". It is not a new phenomenon to the sports or IP industry, which has transitioned from radio to broadcast to cable/satellite/regional and now mobile and streaming. But it may be the most expansive.

Within "Channel Change" is a battle where upstart challengers fight to displace legacy-burdened incumbents. Often, the challenger starts with an advantage. They find the whitespace and are nimble enough to pounce quickly. Meanwhile, the established and trusted incumbent must steer a deeply entrenched culture toward new opportunities.

For investors, we believe "Channel Change" represents a huge opportunity to back the disruptors and also help traditional players evolve quickly. For me, the idea of finding and riding a wave of channel change has shaped my entire career. It's what inspired me to launch Bruin Capital . We saw the forces of change coming to sports as a chance to back disruptive ideas in growth segments while coaching the next generation of innovative, passionate leaders.

Through Bruin and my role with Courtside Ventures ' first VC fund, we're investing in the relationship between sports properties and consumers. We've executed 50+ deals across the sports ecosystem. We've partnered with founders who challenge the traditional definitions of sports operations, digital media, gaming and gambling, streaming services, health and fitness, marketing, and more. We're also building new businesses and helping the incumbents transform. Managing a broad portfolio allows us to find ways these companies can support one another in their respective growth journeys.

We'll talk more about all of this and more in future newsletters. I plan to share my experiences as an investor, working with great entrepreneurs like Ted Forstmann, John Portman, Bill France, Martin Sorrell, our portfolio leaders, and many others. Topics I'll cover include?investment strategy, macro trends in the global sports industry, management, and value creation in this era of "Channel Change."?

I look forward to hearing your feedback and welcome any thoughts or topic suggestions as we move forward together. In the meantime, you can find my full conversation with Don here.

Thank you.?

Disclaimer: There can be no assurance that historical trends will continue. Information included herein relating to market characterization is based on Bruin Capital’s subjective determinations that it believes are reasonable, but others may disagree with such characterization. Other market participants may make different determinations based on the same underlying data. There can be no assurance that Bruin Capital will be able to source partnership opportunities, successfully implement its business strategy or that any holding will generate a return of or on capital. Our views and opinions expressed herein are current as of the date of this article and are subject to change.