For Stats LLC, which installed its SportVu player-tracking technology in all NBA arenas this season, "the real money is in TV," which is why the company is "salivating over the opportunity to sell the new data to networks," according to Danny Ecker of CRAIN'S CHICAGO BUSINESS. Stats CEO Gary Walrath said, "The technology has the potential to alter every other business we're in." ESPN, Fox, CBS and Comcast "often pay seven figures annually to license data" from Stats that the networks "don't have the bandwidth to track themselves." To make "big bucks with SportVU will require inserting these 'next generation' statistics into mainstream fans' conversations, keeping Stats' league and team clients happy with the way it sells the data, and fending off the competition." Walrath said, "The challenge is, how do you make something that's going to drive additional traffic to a site like Yahoo Sports so that they can monetize it." He estimates that about 70% of the company's $60M in annual revenue "comes from licensing standard statistics and providing analysis for more than 200 leagues worldwide." But revenue from SportVU and a related product is the company's "fastest-growing business, doubling each of the past two years and on pace to do so again" in '14.
SEPARATING WHEAT FROM CHAFF: Ecker noted the broadcast nets are "watching carefully" as the NBA, journalists and fans "figure out what's most valuable to understanding the game." Those nets "may end up buying the data from Stats for their broadcasts or live online game-casts -- but only if there's an appetite for such information and it's easy for fans to digest." Even if the nets and brands "want to buy the data, Stats must tread carefully to avoid offending league and team partners." Walrath said that the NFL "wasn't enamored" when Stats licensed data to non-league sponsor New York Life Insurance Co. in '10 to build the "New York Life Protection Index," which measured offensive line play around the league. Walrath: "We know we have to look out for (league partner) interests as well, but how we get that right without self-censoring is the key." Ecker noted another sign that SportVU data "could bolster the company's bottom line: Its owners may soon put the company up for sale." A source said that private-equity firms have "kicked the tires on what could be" a $200M purchase. Walrath confirmed Stats, which is a joint venture of News Corp. and the AP, is "exploring possibilities" (CHICAGOBUSINESS.com, 1/18).
