David Nugent is quick to point out that he’s not an engineer. In fact, he’s an English literature major. Not surprising, then, that Nugent is an author, but the subject matter of his new book — The Business of Technology in Sports (SBJ Publishing) — is borne not of book smarts but 23 years of real-world experience and acquired expertise. As co-founder of Next League (2022), Nugent has consulted with sports organizations regarding their practical and financially impactful application of technology to everything from ticket sales to venue egress. AB senior editor Paul Steinbach spoke to Nugent on the eve of his latest book’s April 14 release to learn how sports leaders are keeping pace with today’s rapid technological advancements.
Why did you help develop Next League?
As you probably well know, there are a lot of tech products in the sports industry. I had co-founded another business prior to this, a technology services company that focused also on the sports industry, and we’d sold that business to a company called Infront Sports & Media, a sports media rights and sponsorship business based exclusively in Europe and Asia. They acquired us to create a footprint in North America, but also to bring some tech shops to the table. And after working inside of that company as an executive for about five years, it became clear to me that they were trying to move us into the product space. There were a lot of very visible North American sports properties that needed help understanding the technology landscape without having somebody trying to sell them their thing — their product or their platform. We were being approached, after leaving this other business, by our old clients, saying, “Hey, we need help assessing the landscape. We need help looking at the types of technologies that will help us generate revenue for the business and acquire new fans. Can you steer us in the right direction?” And we can. The market kind of told us we should do it. Now, it is a different kind of a business, but in many ways it is this idea of an advisory business that’s less focused on selling you stuff than it is on helping you generate revenue for your business via technology.
Let’s talk for a second about the stuff. Give me a handful of examples of what kind of technology products we’re actually talking about in the sports world.
For the leagues and teams and federations and governing bodies and sports organizations like that, you’re talking about technology that, in our world, sort of falls into three different categories. It’s media tech and the ability to distribute media from a tech perspective — streaming video and live data and all those things that fans experience often when they’re not in the building. Inside of media tech, you have literally thousands of different types of platforms and companies that specialize in content delivery networks and content management systems and video systems and video delivery and mobile application development and on and on. All of those things live in that media bucket. Then, the second sort of pillar is marketing technology. How do they acquire new fans? That’s a little bit more focused on teams — selling tickets and putting butts in seats — but that is a super complex ecosystem, as well. You have lots of different CRM businesses, you have customer data platforms, you have all the things that help you acquire and segment and retain fans. So that’s sort of that marketing technology segment. And then on the sports operation side, whether it’s football operations or baseball operations or hockey operations or whatever, you have a whole slew of different technologies that are focused on player performance or injury prevention, game analysis and video analysis, and a lot of that is skewing into the AI space now. So, it is literally thousands of companies, and that ecosystem continues to grow.
How much has it changed since you’ve been paying close attention?
When I started in this business 30-plus years ago, the only thing anybody was really focused on from a tech standpoint was web and mobile. You have a website. What does it do? Can you possibly get some scores up there? Can you get schedules and standings up there? When the iPhone was released, and there was a smartphone boom from 2007 through 2013, then streaming came in. But it was a pretty simple world, because you were really talking about content distribution. Over the last 15 years or so, that has obviously changed tremendously. Billions of dollars in technology goes into venues now — the ability for fans to stay connected while they’re there, and the experiences that teams can provide via venues. That’s become more important than ever to a generation of people that you have to motivate to get out to a venue in a very different way. Like I have college-age kids, and the idea of the season ticket could go away, right? Can you get these people to show up in a venue on a regular basis? It’s a trickier proposition. So, it’s a super complex landscape, and we get hired to help sort through, “Well, what are our goals, what are the outcomes we seek, and what are the technologies that we should deploy in order to achieve those outcomes?” And then we help them assemble those technologies and operate them.
What informational void do you hope to fill with The Business of Sports Technology?
It’s a great question. Being in this business for as long as I have, and seeing that technology has become increasingly more important, I’ve just noticed patterns to success and failure that exist regardless of what the technology is and independent of the pillars I mentioned. I have lived in tech for 30 plus years, and what has become painfully obvious to me is that when tech fails, nine times out of 10 it doesn’t fail because the technology that was designed doesn’t work. It fails because of humans. It fails because you hired the wrong people or the wrong people chose a Phillips-head screwdriver when they needed a hammer, or vice versa. They picked the wrong thing. I started noticing, probably 10 or 15 years ago, people just really bad-mouthing certain tech platforms. “I’ll never work with XYZ company again. They suck.” And when you peel that onion back, what you realize is we just did it wrong. It’s the deployment of that technology that is much more important than the underlying tech itself. The tech is zeros and ones, right? It is designed to do a certain thing. And if you choose the right technology and deploy it properly, and then maintain it — feed and water it, you need to take care of it — those patterns continue to exist regardless of what the tech is. And I still to this day see the same mistakes being made. People put square pegs in round holes for a variety of different reasons. That’s the reason I wrote it, because I just keep seeing the same things over and over again, and I don’t think any of this will change, regardless of the way that technology evolves for the next 20 or 30 years.
Ideally, what does it take to sidestep such miscalculations?
One of the things I talk about in the book is there are certain core competencies that need to exist in order for a technology organization or even a technology project to go well. You have to have the right counsel. Whether internal or external, you have to have people who understand the business problem that’s trying to be solved and the types of technologies that could be used to solve that problem. You can bring people in from the outside to do that, or it’s important, maybe, that you have that aptitude in house. You have to have the right kind of governance internally. Who’s going to be responsible for this? And in sports, you’re always operating against a deadline that’s not going to move. They’re not going to move the NBA All-Star Game or The Masters or whatever, so you have to have governance set up internally that will allow for those things to take place under the right schedule. You have to make the right choices, and then you have to execute. And if any of those things fails, it’s not going to work. If you do have all the right people and make all the right choices, but you don’t have the right process for the development, deployment and operation of technology, it’s just not going to work. I see these things. There are patterns. They persist. The wrong decisions get made on a very regular basis.
Have you witnessed that the skill sets of sports executives have changed in recent years to keep pace with constantly changing technological challenges and opportunities? College athletics directors are as likely today to be business executives as they are the former football coach. Am I right?
Well, I think there’s not enough of that yet. But, yes, that should be the trend, if it’s not. And, yes, inside of pro sports organizations, especially, you see much more sophisticated executives in terms of their exposure to tech and how tech can help them run their businesses. In fact, on some levels, you see more maturity in many sports teams than you even do at leagues, because they’re trying to squeeze every last dollar. It’s hard to run a P&L for a pro team, unless you’re an NFL owner, and then you just print checks based on the media rights. For everybody else, these are very difficult businesses to run. And, yes, over the last three to five years, you’re seeing much more sophisticated executives in many organizations, but not all. Most of these companies are in the business of entertainment and events. A lot of that has to come from media. Some of it has to come from getting butts and seats and attracting new fans. And that’s tech. Today, the best ways to do those things are by leveraging technology, so you need internal aptitudes that maybe didn’t exist five or more years ago.
What recent technological breakthrough can you point to that you think has been monetized to the max within the sports world?
I’m going to sound like a consultant here, but the reality is, it depends. If you’re a major men’s sports league, let’s say the majority of your revenue is coming from media rights. Although you care about the teams in your league, you’re less concerned with attendance than a team would be, right? What you’re really concerned with is how many eyeballs you have on screens and how many additional channels of content can get created and monetized, which is a different problem than segmenting a customer data platform in ways that ensure that you’re selling more tickets. They’re both important, but they require very different types of technologies. Without stating the obvious, Generative AI — artificial intelligence in general — is a gamechanger for everyone. It is empowering every organization to do things with less resources significantly faster, especially when it comes to things like ticket sales, the ability to find and acquire an audience quickly. It is going to significantly shift the landscape, and already has. There are companies like WSC sports that have been auto-clipping highlights using AI for probably close to 10 years. Those types of technologies are the things that will continue to change the business. And then just think about things like facial recognition and AI-driven security and the ability to dynamically route fans around a building so that there are shorter lines. All of these things are new tech developments that have some flavor of AI behind them. Again, that seems like probably the least interesting and most obvious answer, but that’s just the truth. I mean, AI is going to change the way everybody does everything that they do today. What that means is really different depending on the kind of sports organization that we’re talking about.
Can you think of case study where someone just, like you said, you used a Phillips-head screwdriver to drive a nail?
I don’t want to name names, but when things don’t work, they usually don’t work because of a lack of planning or system reliability engineering. In other words, are we practically thinking about where things might break? By the way, this isn’t just in sports. This is in tech in general. How do I possibly anticipate the things that are going to cause problems? Despite the maturity of the tech, we experience things like that when it comes to just the ability — this is in the book, by the way — to stream live highlights to fans. This particular client wanted to collect email addresses. “Hey, if you want to watch these live highlights, give us your email and we’ll let you through for nothing.” Well, there were three or four tech vendors behind this who were throttling the API calls that would allow that entry, so when it got to a certain point, it stopped working. The group that had built the stack and previously been told that there was no throttling. So, there’s a perfect example of humans in the way of the technology. As soon as the throttling was changed or released, everybody was through, and all of it worked, but there was a miscommunication in the process. There’s just too many dependencies inside of these systems. Something’s going to break. What are you going to do about it? Do you have a plan for when something goes wrong during a live event? You know these sports organizations, media organizations make all of their money during that three-hour live window. What are you going to do when something doesn’t work? You have a plan for how you do root-cause analysis and how you get past whatever that issue is? Expect that it won’t work, because something is going to break. The reality is that there’s going to be issues with super complicated technologies.
You quote several sources in the book, which reads more like reportage than would a textbook.
I worked with an editor. I tried to do it in my voice, so that it is much more like a conversation around technology than it is a textbook. Nobody wants to read a textbook. The reality is, it is a book about technology. I’m not sure my 20-year-old daughter is going to want to read, and it’s about sports. But, yeah, we wanted to make it as accessible as possible, and written from the business perspective. It’s not about how does technology works, although we have to touch on that, obviously. It’s much more about how you leverage technology to make money or to grow your fan base. That’s why it’s called The Business of Sports Technology instead of just sports technology.
You devote a chapter to Venue and Events. Is this where technology really has a chance to touch an organization’s audience the most and where successes or misfires become public and most obvious?
It’s the most personal interface that you have. If you’re on a mobile app streaming a game at home, that’s not a super-personal experience. I don’t mean that the mobile app can’t be personalized. I mean that you’re not directly touching the fan the way you are in a building.
And there are a ton of opportunities to create really amazing experiences via technology. Katee LaPoff, who is the CTO at Oak View Group, was interviewed for the book and provide some really great examples of the way their business thinks about this. They manage — build and manage — hundreds of venues around the world. It’s a much more personal experience when it comes to the way you can provide something unique to a fan when you’re in a building than it is when you’re outside the building. Obviously, many more millions of people experience sports when they’re not in the building than do when they are in the building. But Katee provides a lot of really good examples of the way Oak View thinks about building from the ground up, or modifying a building, and then the way you manage that building once it’s up.
When you’re at a sports venue yourself, is there one type of technology that you find enhances your experience more than any other?
For me, personally, it’s the idea of “just walk in, just walk out” for merch, food and bev and ticketing. It recognizes you. It understands who you are visually based on optics. That creates significantly better experiences. Ingress and egress are at the heart of the beginning and the end of the experience, and those can be really painful in a lot of venues. So, both of those things certainly come to mind. I don’t know that the just-walk-out technology from a food and bev or merchandise perspective has been mastered yet. It doesn’t feel so far to me, at least, that that kind of experience is maximized, but that will wind up being very interesting. That reduces friction, whether it’s the friction of getting into the building or friction finding a restroom that doesn’t have a line that’s 20 minutes long. I try to go to as many sports events as I can, and it’s those things that just make your life easier and the experience more enjoyable.
These represent the removal of barriers to actually getting people off the couch and into a venue.
That’s right. I happen to live in New York, and sometimes the barrier is just, “What am I going to go through to get to the venue?” We have mass transit, which helps, but these are not problems that venues or sports owners can solve. They are often closely tied to the city, and obviously the city cares about Yankee Stadium and Citi Field and Madison Square Garden, but the reality is that motivating to get to an event itself is often a big part of the challenge for these sports organizations.
Is it tricky to write a book about technology, particularly given the rate of innovation and especially with AI? Are there obsolescence concerns regarding what you’ve just written?
Without question. I mean, some of it’s obsolete already — not necessarily the theory stuff. The philosophy I described earlier, the mistakes that get made, the importance of process in the deployment of technology — that stuff is, for the most part, evergreen. But if you start talking about specific technologies, for example, book doesn’t have enough about AI in it. I started writing it two years ago, so it’s definitely got AI in it, but the subject matter we covered, it was probably a year ago, and that content is changing every month. So anytime you’re going to print anything, it’s really hard with tech to consider the fact that it could feel obsolete. I definitely tried to focus more on philosophy than tech itself, but I’m sure some people will pick up the book and be like, “I can’t believe he is this term. That was, that was old six months ago.” Well, when I wrote it, it was 12 months ago.
Did you use AI when writing the book?
No. It’s funny. I think a lot of people are going to assume I did, because I think a lot of people write that way. When I started, it was less helpful, quite frankly, than it is now.
What do you say to someone in sports who’s overwhelmed – if not terrified — by AI?
We have to maximize what humans are good at and machines are bad at. AI exists right this minute. In two weeks, it will be better, what folks have to focus on is, “Well, what are the things that AI is actually not good at, and what it’s not good at is interfacing with other humans. It is on the screen. You can ask it a question, it will respond to you in natural language, and it’ll seem like you’re talking to a person. But people don’t want to talk to screens. Well, most people. Most people want to talk to other people. So, what are the things that we’re good at that are focused on contextualizing human interaction and our personal communication. Kids who grew up with cell phones are really bad at interpersonal communication, and that’s going to be the stuff that actually matters the most, because it’s going to be the last thing that a computer can simulate to a point where you won’t know the difference. What I’ve been telling my high school-aged daughter is, “What are the things that will take the longest for a computer to replace?” Well, if you’re a business person, and you’re going to make a decision about buying something, and it’s going to cost a million dollars, we’re probably not just going to put a credit card into a machine. You’re going to want to talk to a person about that. For the big life decisions, we want to look someone in the eye. I think we just need to focus on what are the things that are uniquely human. The intelligence part? We’re already behind. The machines are smarter than us already. But the judgment part, the interpersonal part, the nuance part, the subtlety part, that stuff is the stuff that’s going to take a long time for machines to get there, and we have to focus on that stuff.
Any advice you can give to sports organizations when it comes to emphasizing their human touch?
Look, the only thing sports organizations care about is humans, right? Humans are their customers. So, they can leverage technology in order to acquire more customers, put more butts in seats, generate more revenue — all those things. It’s about the relationship that you create, and you can leverage technology to do that. But at the end of the day, there’s no more social activity than sports. That’s the reason a lot of these Oculus and Apple [virtual reality] devices have not taken off yet. People don’t want to sit in a room staring at a wall to watch a game. They want to physically be with each other. And whatever sports organizations can do to make that experience bette, those are the things they have to focus on. The world is changing in real time.
What will sports operation and consumption look like 10 years from now?
On the operational side, a lot more will be automated. There will be moderation of the automation that needs to exist. Microsoft’s tool is called copilot — the idea that you’re sitting alongside artificial intelligence and making sure that it’s working. That will go to the world of autopilot, where the technology will just run. It’s almost like autonomous-driving cars. Many people are afraid to get into one, but the reality is people are horrible drivers. And the data is there. These machines are like 99.9% safer than a human driver, because humans are just bad at that activity. So, operationally, machines are going to take over a lot of what I would call mundane or rote activity. On the consumption side, the next generation of fans — I have them in my house — they don’t consume content the same way, so often the behavior follows the tech. New tech becomes available, and it changes the way people experience that technology. And often it’s the behavior of the people that requires that we develop new technology. The next generation of fans — this is a short-attention-span group. The idea that you’re going to get them to sit down and watch 80, 82 NBA or NHL games in their entirety is just not a realistic way to think about the problem. They’re going to consume it in chunks, so we have to enable those experiences. Can’t Ignore it. You can’t just try to force them to watch a whole game. You have to give them the content in a different way, and I don’t think there’s any avoiding that. I mean, there is a world maybe in which all these devices go away, and the next generation of young people realize that this is ruining their lives and they want to have a more pastoral experience, and sit at a baseball game and eat a hot dog and drink a beer and talk to each other for three and a half hours. I don’t see that future coming. I think the experience part of this is going to radically have to change, and it’s sad in some ways, but we’ll see. We’ll see where that brings us. But some of this is already happening.
