Sportradar Plays The Numbers Game
It’s conventional wisdom that international expansion, multibillion-dollar broadcast contracts and lucrative new stadia are changing the face of pro sports. But none of these are more than a bunt single compared with the home run that is the data revolution. Sports is proving to be the ultimate numbers game, and a local group is leading the revolution from Minneapolis.
Dave Abbott, Ulrich Harmuth, Steve Byrd and Tom Masterman head the U.S. headquarters of Swiss-based Sportradar, an international sports data provider that acquired SportsData, a fast-growing Minneapolis startup, in 2013. Since then, the four men have spearheaded exclusive agreements between Sportradar and NASCAR, the NHL, the NFL and, possibly soon, the NBA.
Harmuth, who is managing director, and Byrd, chief commercial officer, work behind the scenes to create these partnerships; Abbott, who directs technology and operations, leads a team of programmers who receive, analyze and interpret the constant flow of raw statistics (he also was a co-founder in SportsData). Those tools are then sold in every way chief revenue officer Masterman deems practical.
For example, every NFL player is now “wired” with sensors, allowing Sportradar to gather, share and analyze real-time data covering everything from how fast a football flies through the goal posts to the Viking’s Adrian Peterson’s acceleration rate on a touchdown run. Sensors are placed in both shoulder pads, and in the football itself. Sportradar did not create the sensors or the underlying technology; its role has been to innovate and disseminate data to its clients.
The NFL is footing the bill for the technology’s rollout, according to league spokesperson Brian McCarthy. “This goes back to something NFL commissioner [Roger] Goodell has stressed during his tenure, which is to embrace technology,” so that the way the game is played and viewed “will be better for the players, the coaches, and at home for the fans,” he told the Chicago Tribune in 2014, not long before the NFL’s exclusive partnership with Sportradar was announced.
On the grid
How Sportradar collects data from major sports clients.
NFL RFID tags in the football and in both shoulder pads of each player are linked to 20 to 25 receivers placed around the stadium.
> Shoulder-pad tags provide running speed, exact length of a run, height jumped.
> Football provides exact length of each kick and speed of a pass.
NHL RFID tags in the puck and in each player’s jersey interact with 10 infrared cameras surrounding the rink.
> Jersey tags provide player location, skating speed, duration of player’s shift.
> Puck tags offer shot speed, height of shot off the ice.
MLS (soccer) Three cameras around the stadium optically track all 22 players, three referees and the ball.
> Players and referee tags provide distance traveled over the entire game, distance between players, and length of a slide tackle.
> Soccer ball tags deliver speed of shot, height off the field.
NASCAR Each car is equipped with a GPS system—a “black box”—which sends a tracking signal five times per second throughout the race.
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> System provides overall speed, distance between cars, digital record of each car’s path.
*Sportradar currently receives tracking data from the NFL, however, it does not receive it from the NHL, MLS or NASCAR.
But Sportradar is footing the bill for the NFL exclusivity arrangement to capture and use the data from the sensors, reported to be $5 million per year, according to the Sports Business Journal. The company will not confirm that number, but spokesperson Nick Stamm notes, “We only invest in partnerships where we see a strong business opportunity to create value, both for Sportradar and for our partners. The deals are not essential but they can play an important part in delivering added value through exclusive content.”
The data Sportradar sells has wide-ranging uses. Coaching staffs use it to gauge player performance and to monitor progress in training and injury recovery. Broadcasters use it throughout game broadcasts. It’s inevitably relevant to fans who manage fantasy teams and are always looking for an edge for their roster. And it’s the fuel that runs online sports gaming—which is legal internationally and in a small number of U.S. states.
Data’s rising influence in sports is not new. Baseball in particular has gravitated toward the use of newly defined metrics to reevaluate old-school observational and “gut” methods. Sabermetrics, as it is known, gained notoriety in the 2011 film Moneyball, which looked at how the frugal Oakland A’s found a powerful but undervalued player archetype and built a team around it.
What’s changing is the speed at which this enormous trove of data is now gathered, processed and distributed. Last year, Sportradar’s global revenues totaled $145 million from services it provides to more than 350 clients, ranging from news/sports broadcasters to international sports agencies and Fortune 500 companies wishing to use web advertising to tie their products or promotions to sports results.
Sportradar is banking on monetizing that exclusivity, but it’s potentially a risky play, should the market deem the data uninteresting or insufficiently exclusive. “The information and content we receive,” says Stamm, “is unique and compelling, and by developing the onward uses of the NFL’s Next Generation Stats, we are providing businesses and platforms with a plethora of different ways to engage, entertain and inform the league’s fans.”
The company essentially licenses its tools to media companies. That information can be freely shared on social media, on a website, in print. Sportradar does not control the way the data is used or who receives it. It only controls who has access to the broader database. The company believes this is sufficient to maintain exclusivity over its data and justify the prices its clients pay. “We are confident in our ability to provide products, tools, applications and formats that will deliver value for our partners, as well as for Sportradar,” Stamm continues, “whilst generating buzz across the industry.”
The Minneapolis-based management team’s goal is to corner the market in so-called “next-generation sports statistics.”
A fast-evolving field
Founded in 2001 in Trondheim, Norway, Sportradar began by providing sports data to companies in Europe and Asia, primarily to gambling operations. Opportunities within gambling have remained steady, but pale in comparison to the possibilities in a market with large, data-hungry sports media outlets, like the United States. “The growth of the application of sports data in commentary or sports analysis has really skyrocketed in recent years,” says Alex Inglot, director of communications and public affairs at Sportradar’s London office. “There came a recognition from our side [in Europe] that the U.S. market was the vanguard.” It was the 2013 acquisition of SportsData that allowed the company to quickly advance with new growth opportunities, targeting U.S. media providers like ESPN and big-ticket sports leagues like the NFL. In the three years since its 2010 founding, Minneapolis-based SportsData had already made a name for itself in the industry, netting more than 250 clients, including Facebook, Twitter and Google, each of which signed on to use its live score display service. Most of its other clients were in the mobile, fantasy sports and media industries.
Since it was acquired, the Minneapolis operation has opened offices in Brooklyn and San Francisco, and employs about 100 people in the United States, with 85 in Minneapolis. It also hires 130 to 175 part-time data entry workers. The number fluctuates seasonally; November is its busiest month.
Stats LLC, a Chicago-based sports data aggregator, is Sportradar ’ primary rival. The company’s 2015 revenue of $60 million, as reported by Crain’s Chicago Business, was four times Sportradar’s U.S. sales. Sportradar would not confirm financial data, but EQT Partners, a German investor in Sportradar’s global operations, said in a press release that Sportradar had $14.5 million in domestic revenue last year.
Nevertheless, Sportradar spokesman Stamm says, “based on our [growth] trajectory, we believe we will be the largest player in the U.S. in two to three years.” A Stats spokesperson declined comment on its competition with Sportradar.
A game-changing move
Sportradar has long judged its market niche as one that improves on the nature of the data available in the marketplace. In the early 2000s, when Dave Abbott was an executive with the St. Paul-based online streaming company Internet Broadcasting Inc., he began working with NBC on Olympics streaming. “As I went around the country and sat in all of these [network executive] offices,” Abbott says, “there were a lot of unhappy Stats customers. They didn’t like the business arrangement and they didn’t like the support they got.”
Work eventually took Abbott overseas for the European soccer tournament UEFA Champion’s League, and he heard the same complaints. “Now I’m outside of the U.S. talking to all of these executives in sports companies, and they’re sharing the same frustrations,” he says. “And so I thought there had to be an opportunity here.”
According to Abbott, a Stats customer might, for instance, ask how to use one of its data collection tools to find an NFL quarterback’s percentage of completed passes in a given season. Often the customer wouldn’t hear back from Stats for as long as two days, “and as a computer guy, when I’m working on something, I can’t sit for a day or two,” says Abbott. “So offering a very insightful, helpful response on first touch was really important.”
Thus SportsData began offering a live score display service nearly identical to Stats’. It sought to provide free samples of its service to potential clients as a way to distinguish itself. “That was something that was never done before,” he says, “but that way we could prove our data was every bit as fast, or faster, and every bit as accurate. It was the perfect sales experience.”
But it wasn’t until Sportradar bought SportsData that the company had the financial heft to pay for exclusivity deals with leagues. NASCAR was the first to jump aboard in 2015. The NHL did the same later that year, followed by a big partnership deal this May with eSports, a fast-growing video game competition league with estimated 2016 revenue of $463 million. In roughly 15 months, Sportradar landed all of these major league deals as well as the biggest fish—the NFL.
Player tracking: the next frontier
According to Crain’s Chicago Business, the NFL left Stats in 2015 over disagreements on how Stats could use NFL data with other clients. One such case involved a 2010 ad campaign by New York Life, which is not an official NFL sponsor. Stats had reportedly agreed to provide the insurer with statistics on offensive line play, and NFL officials weren’t pleased.
“Sometimes a customer will switch their current products from Stats to us,” but just as often the new customer arrives in search of new products and services, Masterman says, noting Sportradar’s command of next-generation statistics as one reason the NFL made the company its exclusive data provider.
Player tracking—the centerpiece of next-generation statistics—uses radio-frequency identification (RFID) tags embedded in player uniforms. The tags, which are the same type of chips used in credit cards, send a signal to 20 to 25 receivers surrounding a football field. The data is collected, processed and distributed by Sportradar .
“Now we can see that the guy who catches the most touchdowns may not be the true best player on the field,” Masterman says, “because we have new metrics to show this other player is running really good routes and doing his job better.”
A year after Sportradar inked its NFL deal, Illinois technology company Zebra Sports signed on to be one of the league’s player tracking technology partners. Its first act was to outfit every team and stadium with the player-tracking technology it developed. How much can be gleaned from RFID tags is yet to be seen, but what’s certain is that the complexity and level of detail of the next-gen data far outstrips traditional statistics like average yards per run and number of passes completed.
On Thursday Night Football, for example, a broadcaster will be able to use the technology during the replay of a scoring run. Viewers can see exactly how much a running back’s speed increased the moment he broke past defenders, along with the distance between him and the end zone and his nearest opponent on the field. To the NFL, the data adds a new level of experience for fans at home; to coaches, it provides a new means to monitor game-day performance.
The football will be tracked using the same RFID tag. “Included among the data that will be collected is how far the ball travels on a particular play and the ball’s proximity to the goalposts” during field goals or point after attempts, says NFL spokesman McCarthy. Readings from the “instrumented” ball could even determine which quarterback throws the fastest pass.
Reports drawn from the RFID-enhanced football, which was created by Zebra and Wilson Sporting Goods, suggest the NFL is hoping the data will help the league in its quest to make kicking for points less predictable. Even after the league moved back extra point kick attempts by 13 yards last season, kickers still had a 94 percent success rate. Regular field goal attempts also succeeded 85 percent of the time.
The data collected from the footballs and aggregated by Sportradar could result in changes to the size of goal posts or the rules for kicking for points—in which case data will no longer be just reflecting gameplay, but driving it.
Evening the odds
Outside the U.S., Sportradar’s primary reputation rests on its anti-matchfixing software and services. Its European brand, Betradar, has been around since the company’s founding, and 450 licensed bookmakers from around the world pay for its betting-related solutions and services. Just over half of Sportradar’s $145 million in global revenues come from this division of the company.
It’s rooted in software that monitors unusual betting activity. Since 2009, Sportradar’s Fraud Detection System has supported or initiated more than 133 sporting sanctions, and since 2013, has supported or helped initiate 24 criminal prosecutions involving match-fixing.
Sportradar claims that no other company worldwide offers full-scale integrity services like Sportradar’s European operations do—in part why its U.S. operations in Minneapolis have attracted major investments from big-name players both off (and once on) the field. Ted Leonsis, owner of several Washington, D.C., teams, including the Wizards and Capitals, announced last October that he and two other NBA owners—Mark Cuban (Dallas Mavericks) and Michael Jordan (Charlotte Hornets)—would be joining the Sportradar advisory board after making a $44 million investment. At the time of the announcement, Leonsis told Forbes, “perhaps the sexiest thing, because it is one of the most important things right now, is how data and algorithms can protect against fraud.”
NBA commissioner Adam Silver penned a 2014 op-ed in the New York Times arguing for the legalization of gambling on professional games. “Some estimate that nearly $400 billion is illegally wagered on sports each year,” he wrote. “I believe we need a different approach.”
That different approach could involve Sportradar. In mid-August, Bloomberg reported that the NBA was close to finalizing a $250 million data deal with the company. (Sportradar had not commented as of press time.)
The partnership with the NBA would be a huge win for Sportradar as it seeks to dominate the domestic professional sports market. With the NBA secured, Sportradar would then hold contracts with three of the four major leagues (Major League Baseball has a relationship with Stats.)
Furthermore, media clients are an essential part of Sportradar’s business plan, as they provide the bulk of the revenue for statistical packages. The Associated Press once owned Stats, but this summer it named Sportradar its official provider of scores, standings, schedules and statistics for its 1,400 daily-newspaper and thousands of radio and broadcast customers.
The numbers don’t lie. Sportradar’s rise in a mere six years to be a giant in the sports data market is impressive. For Sportradar to approach Stats’ more than three decades of dominance, it will need to continue innovating and generating data that the marketplace wants to pay for. Commodification of data is its enemy. For the short term, the Minneapolis arm of the global player rides high. Long-term, it’s anyone’s game.
Crime Doesn’t Pay
A look at how Sportradar’s global team deals with gambling violations.
Soccer match-fixing, in particular, was the impetus for Sportradar’s Fraud Detection Services back in 2005, after news broke that a German referee had been manipulating games to support a Balkan crime syndicate. “At the time, it was tremendously embarrassing for the Germans because in 2006 they were to host the FIFA World Cup,” says Alex Inglot, director of communications and public affairs in Sportradar’s London office. “So they came to us and asked if . . .we could productize our detection service in a way that would help [soccer] federations flag and capture criminal organizations.” Today, Sportradar says many of the top soccer organizations from around the world, including UEFA and Major League Soccer in the U.S., use its fraud detection services.
Sportradar has also been developing a Fraud Intelligence division to help connect the dots between individual acts of fraud and worldwide match-fixing operations.
Gambling manipulation doesn’t just happen in soccer, though. Tennis has been a recent favorite among criminal organizations, in a practice known as courtsiding. There exists a very brief period—typically less than a minute—between the moment an event takes place on a court and the data from the event is uploaded online. “Every point is an event, every game is an event, every service is an event,” Inglot says. “The more events you have, the more opportunity there is to bet on those events.”
To protect its clientele, Sportradar’s security team developed an Umpire Scoring System for the International Tennis Federation, the body managing hundreds of professional-circuit tennis competitions around the world. “In theory, the Umpire Scoring System should eliminate the ability for courtsiders to have this window to make contact with whoever is placing bets elsewhere,” Inglot says. In February, six international tennis umpires were thrown out of the professional circuit for courtsiding from their chairs. They are accused of waiting up to a minute to upload data between points, allowing a criminal organization to bet after the fact.
Sam Schaust is TCB’s online and e-newsletter reporter.