Audio & Visual

Episode 34: The Digital Stadium: How the New Fan Experience Can Drive Revenue

Don White, CEO, Satsifi Labs

February 14, 2024

people at a sporting event

About the episode

Explore the transformative power of AI and digital technology in the sports industry on our latest episode, which features Satisfi Labs CEO Don White. Fresh off the Super Bowl's digital showcase, dive into how these technologies are enhancing fan experiences by making sports more accessible and interactive than ever. Don shares his journey from finance to founding Satisfi Labs, emphasizing the role of AI in personalizing fan engagements and the future of digital consumerism in sports.

Q&A

Historically, sports have been analog experiences. However, we’re seeing increasing digital initiatives in the industry. Could you share your thoughts on this evolution?  

With the advent of streaming platforms and services like MLBTV, the digital transformation of sports began, enabling fans to watch out-of-market games and fostering the growth of fandom beyond local boundaries. Personally, my journey as a Minnesota Vikings fan, despite having no direct connection to Minnesota, exemplifies how increased access through streaming, YouTube, TikTok, and other platforms has expanded fan reach. The Premier League, Six Nations Rugby, Formula 1, and NASCAR all engaging with streaming services have further broken down geographical barriers. 

However, as fans seek more personalized connections with their favorite brands, technology plays a crucial role. AI has become a standard rather than a luxury in providing fans with a more intimate connection. For instance, as a Formula 1 fan, mere Instagram updates are no longer sufficient—the desire is to click on images, engage in conversations, and have a more immersive experience. The landscape is evolving, and we anticipate an influx of companies entering this space over the next three years, with our aim to maintain a leading position.

What are some of the challenges when navigating the physical and digital experience for a sporting event? 

Discovery is the most challenging aspect. The bias of the pre-ChatGPT chatbot is that it’s a deflector tool, mainly keyword-based, aimed to throw back FAQs and dismiss less important queries. However, our approach differs, and now the expectation is that the AI can handle almost anything. Despite having a welcome message that outlines AI's capabilities and limitations, users sometimes struggle to get what they want due to a lack of knowledge on how to ask. In the realm of marketing and channels, navigating the discovery of capabilities remains a significant challenge in our industry, and no one has effectively solved it yet.

Historically, the sports industry has had more individual ownership from wealthy families. However, there's been a shift over the last several years with leagues, F1, MLS, NHL, MLB, and the NBA, and shifting regulations to allow private equity backing and backing from multiple investor groups. How will this change sports? 

There has been a notable shift in the strategy of private equity in the sports industry. Rather than the traditional approach of coming in, restructuring, and cutting staff, many private equity groups are adopting a founder-friendly stance. This means they seek to work collaboratively, supporting and optimizing the business without turning it into a chop shop. I think private equity is a positive shift as it brings a structured financial approach to running businesses. This shift also challenges the notion of management by lineage, allowing for more diverse and optimized organizational structures. In this evolving landscape, there is a growing focus on the customer, emphasizing the importance of fan satisfaction, even within private equity-owned entities.

According to a study by creditcards.com, consumers spent $56 billion on attending sporting events over the last year. Does that number shock you? 

Honestly, $56 billion spending on attending sporting events doesn't shock me; I actually thought it was around $70 billion. The price of the experience is high, particularly with a family, as I recently experienced taking mine to a game—it felt like a significant investment. However, the irreplaceable nature of creating memories, especially the joy of witnessing your team win, makes it worthwhile. Teams are enhancing the overall experience with features like barber shops, rock walls, and zip lines, turning sports venues into entertainment centers. I'm impressed with the efforts to make the experience enjoyable and worth the cost. Personally, I prioritize sporting events as a centerpiece for vacations, and with the growing development of districts around stadiums, sports are evolving into mini small cities rather than just arenas or fields.

Why do you believe private investors, whether from private equity or venture capital, show significant interest? Could it be the sheer magnitude or the Total Addressable Market (TAM) that plays a role? Are there other factors aside from scale that make investments in your view, or in the investors you're observing, particularly appealing? 

There's still a post-COVID surge, and what COVID did was create a clear demand projection as people sought experiences they may have considered a luxury before. Conversations with investors reveal a willingness to allocate consumable income to live experiences, prioritizing them over vacations, clothing, or even a better car. The market continues to expand, evident even with price increases in leagues like NFL or MLB, as seats aren't staying empty, and team success drives increased spending. Investors are attracted to the real estate and opportunities outside sports, and the rise of women's sports is gaining prominence, drawing in new fans and spending. The sports market seems to be growing due to increased access, fostering optimism for continued growth.