The surge of private equity interest in sports investment is motivated by the potential of direct-to-consumer growth (DTC), not traditional revenue streams, according to the European Tour’s chief operating officer.
Pre-dating, but certainly accelerated by, the coronavirus pandemic, there has been a rise of venture capital investment in sports. Rights holders across rugby union, soccer and mass participation have all received private equity cash in the last 12 months.
Speaking to SportsPro’s Insider Series, Rufus Hack confirmed that the European Tour could seek a strategic partner to help better understand its data and boost revenue streams.
“The sports market is aflush with private equity money at the moment” said Hack. “I don’t believe that private equity money is coming in because they believe there is a great opportunity on B2B in terms of traditional media and traditional sponsorship.
“I believe they are coming in because they think sport is pretty resilient and there is a huge growth opportunity in DTC and B2C income streams. I would be surprised if any rights holder isn’t hugely focused on how do we increase our B2C income streams moving forward.
“Whether that is the core revenue streams of ticketing or merchandise or developing auxiliary income streams like the wider ecosystem and share of wallet, fantasy, gaming and data, I expect that is going to be the growth engine and is taking significant focus.”
Adding: “We are currently deciding whether it is right to do it in-house or to actually work with a strategic partner on the perimeter of all of these B2C activities. We’ve come to the conclusion that, yes, we probably could, but actually having a partner to support us on this journey might be very valuable.”
Staying with the European Tour, the professional golf body has also announced that it will be trialling the use of driverless vehicles to shuttle golfers during the 2020 Wales Open, taking place at the Celtic Manor Resort between 20th and 21st August.
The shuttles have been developed by UK-based manufacturer Aurrigo and will operate and feed back data in partnership with Vodafone’s 4G network technology.
Source: SportsPro
