An easy assumption to make about athlete venture capital investments is that sports stars’ money would tend to go towards supporting companies directly connected to the search for success on the field, like wearables or sports equipment. Five years ago that may still have been true, but it is less so today, according to Casey Schwab, VP of business and legal affairs at NFL Players Inc., the licensing arm of the NFLPA, and Rouz Jazayeri, co-founder of Catapult Ventures and executive board member of the NFLPA’s OneTeam Collective.
“We had a OneTeam Collective board meeting a couple of weeks ago in Los Angeles, and it was right about the time Beyond Meat went public,” Jazayeri explained at the San Francisco 49ers and SportTechie Horizon Summit last week. “It’s a competitor to Impossible Foods, which is also doing really well—I’m a little biased because Catapult Ventures has invested in Beyond Meat. But we had … a heated argument between myself, one other person, and one current player, and one former player on which product was better.”
NFL players have become experts in areas far from their day jobs. They have taken notice of other athletes like LeBron James and Steph Curry, who have invested money in tech and launched their own media companies.
“Our guys are decreasingly interested in just endorsing a product. They want to be involved. They want to be in the mix. They want to be either on the board, or an advisor, or somehow influential,” Schwab said.
Many of those inbound calls over the last year or so have centered on blockchain and cryptocurrencies, cannabidiol—aka CBD—supplements, and sports betting.
Before the OneTeam Collective was founded, the NFLPA had been offered a chance to forego player licensing fees in exchange for capital in Bitstrips, the parent company of the Bitmoji app. The NFLPA declined, preferring to stick with a more traditional licensing model. Schwab cited that case as an example of a big missed opportunity. In March 2016, Bitstrips was acquired by Snap for $115 million. Last fall, two year’s after it was founded, the OneTeam Collective itself was named as SportTechie’s Outstanding Investor for 2018.
“The interesting thing for me about sports tech, and sports tech trends, is that our definition of sports tech has probably expanded a lot in the last few years,” Jazayeri said. “Traditionally we would just say ‘OK, what are we doing for in-game experience?’ or ‘What are we doing for specific wearable technologies for athletes?’ But now I look at the definition of this as including things like Bitmoji.”
One major example of a sports technology growth area, according to Jazayeri, is the connected fitness market. “I’ve been just amazed at Peloton’s growth, and what they’ve created is a new category of connected fitness products, connected fitness equipment,” Jazayeri said. “It’s a beautiful piece of hardware, but the magic’s in the subscription.”
Many other companies have entered the same space, but targeting different types of exercise. Peloton itself has expanded from cycling to include running. Hydrow connects people working out on a rowing machine with coaches out on the water. FightCamp teaches at-home boxing classes. Pivot does the same for yoga.
“Our mandate on the for profit side is do what’s best for our membership in generating revenue,” Schwab said.
“That said, it doesn’t mean that the tech that we’re partnering with has a direct impact on the athletes or it’s a wearable. It might be just a strictly revenue-based decision.”
Schwab admits that two of the current interests of players, CBD and sports betting, are thorny issues. When derived from hemp, and if it contains less that 0.3 percent THC, CBD is legal. But if extracted from marijuana plants, in many states it is not. Though no longer banned by the World Anti-Doping Agency, however, CBD use could get football players into trouble with the NFL’s substance abuse policy. Investing in CBD, even without using the substance, could be controversial.
Sports betting, whose legalization is similarly spreading across the United States after the Supreme Court struck down PASPA last year, is also a complicated issue for athletes and their unions.
“The integrity of the game piece is the most important piece to us as a union and the most important piece to our players,” Schwab said. He argued that there may be many opportunities in ancillary industries surrounding sports gambling, “[but] I don’t think that the NFL Players Association is ever going to invest in an actual sportsbook. It doesn’t make sense given what we do.”
The NFLPA was a sponsor of the San Francisco 49ers and SportTechie Horizon Summit.