Sports Finance Report: NBA, Intel Capital Launch Sports-Tech Accelerator Program

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NBA, Intel Capital Launch Sports-Tech Accelerator Program

Intel Capital and the National Basketball Association have announced plans for a multi-year accelerator program to “advance the cause of startups in the nexus between sports, technology and entertainment” (think: immersive media, smart arenas). The NBA + Intel Capital Emerging Technology Investment Initiative will serve as a launch pad for the companies selected, providing investment capital (largely funded by Intel Capital), IP, opportunities for commercial collaboration and global reach. The program will consider sports-tech companies from anywhere in the world, at all investment stages; though, it intends to focus on U.S. based businesses raising Seed and Series A rounds. The announcement comes less than a month after Intel announced it would be shuttering its consumer wearables business (think: fitness trackers).

Howie Long-Short: We’re witnessing a trend of sports league/teams launching accelerator/venture programs. In January, the Dodgers announced they would be expanding their investment arm, introducing a “venture studio” with R/GA; and then in February, Harris Blitzer Sports & Entertainment, Creative Artists Agency and the San Francisco 49ers announced the launch of Elevate Sports Ventures. Elevate CEO Al Guido told us there’s a simple explanation as to why teams/leagues are first now entering the venture capital space; historically speaking, “sports teams (and leagues) didn’t recognize the power of their brand and what it meant.” They sure do now.

The new initiative will be funded by Intel Corporation’s (INTC) global investment arm, Intel Capital; which has fund 1500+ companies, including VenueNext, Peloton Technologies and DocuSign (just went public, DOCU).

In late April, INTC reported Q1 ’18 earnings (+32% YoY to $.87/share) and revenue (+9% YoY to $16.07 billion) figures that beat analyst expectations; with the company’s data-centric businesses (AI, cloud, data centers and IoT, 2^nd largest segment of business) reporting the largest (+24% YoY to $5.2 billion, all-time high 49% of company revenue) and most rapid growth (+20% from trailing quarter). As CFO Bob Swan explained, “our Q1 results demonstrated continued momentum in our transformation from a PC-centric company to a data-centric company.” The company also raised FY18 revenue guidance by $2.5 billion to $67.5 billion. It’s worth pointing out that shares up are up 17.7% YTD ($54.34).

Fan Marino: Intel and the NBA have some familiarity with one another, as INTC currently serves as the league’s “exclusive provider of virtual reality content” (Intel True VR technology) and provides 360-degree video (for unique in-arena game views) to NBA broadcast partners around the world. Last month, the company also became one of the first two “Official Partners” of the NBA 2K League, agreeing to serve as the “Official Technology Provider” of the upstart esports league.

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Camping World to Rebrand NASCAR Truck Series Racing Series

NASCAR and Camping World have expanded their partnership (runs through ’22), extending official NASCAR partner status to Camping World subsidiaries Gander Outdoors, Overton’s and The House Outdoor Gear. The newly expanded agreement allows for a rebrand of NASCAR’s Camping World Truck Series, to be renamed as the NASCAR Gander Outdoors Truck Series for the 2019 season. Gander Outdoors won’t have to wait until next year to market to NASCAR fans though, the company is the title sponsor of 2 July races at Pocono (Cup Series on 7.29, Truck Series on 7.28) and has picked up rights (along with all Camping World brands) to activate at NASCAR retail locations (i.e. tracks) nationwide.

Howie Long-Short: Camping World (CWH) Chairman Marcus Lemmonis has been vocal about NASCAR’s impact on the company, saying “nearly a decade ago we felt strongly our entitlement sponsorship would dramatically increase Camping World’s customer base and it’s delivered”; so, it’s no surprise he would look to replicate the growth model with his May 2017 acquisition (formerly known as Gander Mountain).

Earlier this week, Camping World reported a “very strong” (Lemmonis’ words) Q1 ’18 with revenue up +20.4% YoY to $1.06 billion (including same store sales growth of +3.9% to $838 million) and adjusted net income growing +16.5% YoY to $36.9 million, figures depressed by an unusually cold start to the company’s peak selling season. The company said it still expects to generate a mid-single digit increase in ’18 same store sales and reiterated guidance for FY18 revenue ($4.8 billion – $5 billion), but that wasn’t enough for shareholders as the stock price fallen off a cliff (-18.28% to $22.57) since the company reported on Tuesday. Competitors Thor Industries (THO –9.11%) and Winnebago Industries (WGO –7.16%) have also experienced sharp declines this week, as the market now anticipates the cold weather to have an impact on their next earnings report.

Fan Marino: Spurs asst. coach Becky Hammond recently became the 1^st woman to interview for an NBA head coaching position. Hammond was among several Spurs coaches interviewed, so she’s not a lock to get the job; but, having a big money sponsor in her pocket won’t hurt her cause. Lemmonis recently went on record with his support of Hammond saying, “I would become a big $$ sponsor of the organization with Camping World and Gander Outdoors, if they hire her. As a Marquette University graduate this would be trailblazing.”

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