The 4 AI Strategies for Sports Properties: Where Do You Stand?
3 Min Read.
As I was talking to a VP of an NBA team, he shared an eye-opening story. Recently, he was called into a high-stakes meeting with the team president, who was fired up about the future. The president laid down an ambitious vision:
“I want our NBA team to be the number one leader in Generative AI. This isn’t just any innovation -it’s a game changer that will impact our bottom line dramatically in a very short time. By next year, I want to increase our efficiency by 30%, automate 25% of our marketing activities, achieve a 15% reduction in costs, and uncover at least two new revenue streams. Imagine AI-driven character versions of our athletes generating income through activities that don’t require the actual players’ involvement.”
This conversation inspired me to delve into the various strategies sports organizations can adapt to integrate AI into their operations.
Below are the four main strategies we have identified:
Strategy 1: Wait-and-See – Observing Market Trends
The wait-and-see approach involves minimal immediate action on AI adoption, instead observing industry trends and waiting for clearer signals on which technologies to adopt.
For example: Blockbuster’s Fall Behind Netflix
Blockbuster, once a giant in the video rental industry, took a wait-and-see approach during the rise of digital streaming. While Netflix aggressively embraced digital streaming and innovative technologies, Blockbuster hesitated, observing market trends instead of taking decisive action. This delay in adapting to the digital revolution ultimately led to Blockbuster’s downfall, as they lost the first-mover advantage and couldn’t keep up with the rapidly evolving market, resulting in their exit from business.
The Benefits:
- Risk Mitigation: Avoids the potential risks of early adoption.
- Cost Control: Limits financial exposure by waiting for proven technologies.
The Challenges
- Missed Opportunities: Losing the first-mover advantage can result in significant lost opportunities.
- Falling Behind: Delayed implementation can result in lagging behind more proactive competitors, potentially leading to obsolescence.
- Stagnation: Dependence on others to validate technologies can limit innovation and growth, leaving the organization vulnerable in a rapidly evolving market.
Strategy 2: MeToo – Following the Trend
The MeToo strategy involves keeping an eye on AI innovations within the industry and gradually adopting those proven effective by competitors. This approach is cautious, allowing organizations to implement AI slowly but safely, minimizing risks associated with new technologies.
For example: VAR Technology in Football
A notable example of the MeToo strategy is the adoption of Video Assistant Referee (VAR) technology in football. Initially introduced in top leagues like the English Premier League and Serie A, other leagues observed its impact on game fairness and decision accuracy before adopting it themselves. VAR’s success in reducing controversial decisions encouraged broader implementation across various leagues and tournaments worldwide.
The Benefits
- Reduced Risk: By observing the successes and failures of early adopters, sports properties can mitigate potential risks.
- Cost-Effective: Gradual implementation allows for budget management and avoids large upfront investments.
The Challenges
- Lagging Innovation: This approach may result in being perpetually one step behind competitors, missing the chance to lead the market.
- Limited Competitive Edge: Relying on existing solutions can limit opportunities for differentiation and market leadership.
- Reactiveness: A reactive approach may leave the organization struggling to catch up with more innovative and proactive competitors.
Strategy 3: Proactive – Driving AI Initiatives
In the proactive approach, organizations actively seek out AI technologies, invest in their development, and integrate them into their operations with clear objectives and timelines. This strategy positions the organization as an innovator within the industry by continually looking for new and existing opportunities to enhance their operations.
For example: UFC’s Partnership with Grabyo
The UFC exemplifies the proactive approach with its collaboration with Grabyo to enhance its global content strategy. By leveraging Grabyo’s suite of AI-driven video production and distribution tools, UFC streamlined its workflows and improved fan engagement through innovative content formats like “Quick Hits,” offering raw and unfiltered access to fighters.
The Benefits:
- Innovative Edge: Staying ahead of the curve with new technologies, establishing a competitive advantage.
- Enhanced Efficiency: Streamlining operations and reducing inefficiencies, leading to cost savings and improved performance.
- Market Leadership: Proactive adoption of AI can position the organization as a leader and trendsetter in the industry.
The Challenges:
- Time required: While looking for new technologies presents a challenge due to the time required, it is a worthwhile endeavor in the long run. The benefits of such investments far outweigh the initial time commitment, leading to significant improvements
Strategy 4: Leadership – Pioneering AI Adoption
The leadership strategy involves a comprehensive and aggressive implementation of AI across all facets of the organization. Unlike the proactive approach, which focuses on continuously seeking and integrating existing opportunities, the leadership strategy is about envisioning and creating entirely new possibilities that may not yet exist. The goal is to become a benchmark for AI integration in the industry, significantly enhancing efficiency and performance.
For example: Respeecher’s AI in Sports Broadcasting
Disney+ and Respeecher’s collaboration on “The Mandalorian” showcased the transformative potential of AI in recreating younger versions of characters’ voices. This technology’s implications extend beyond entertainment, with potential applications in sports broadcasting to revive historic commentary by legendary broadcasters, offering personalized fan experiences and enhancing archival content.
The Benefits
- Market Leadership: Establishing a reputation as an industry leader in innovation, setting the standard for others to follow.
- Comprehensive Efficiency: Significant improvements across all departments, driving overall organizational performance.
- Increased Engagement: Enhanced fan experiences and deeper engagement through innovative AI-driven initiatives.
The Challenges
- Complex Integration: Comprehensive implementation can be complex and resource-intensive, requiring careful planning and execution.
- Cultural Shift: Significant changes in organizational culture and workflows are needed to fully embrace and integrate AI technologies.
Conclusion:
AI is transforming the sports industry, offering new ways to engage fans, optimize operations, and drive revenue. Whether your strategy is to follow the trend, proactively drive initiatives, lead the industry, or adopt a wait-and-see approach, understanding where you stand can help you make informed decisions.
Explore these strategies in more detail and discover which approach aligns best with your organization.
Invitation – AI Showcase
Next month, we’re revealing the 10 most effective AI solutions that are transforming sports—boosting revenue, enhancing fan experiences, and cutting costs. It’s an exclusive, closed session. Attendance is subject to approval [Register here].
Stay tuned for more,
Amir Raveh, Founder & President, HYPE Sports Innovation
Comments