As the capacity to provide mobile and digital offerings to consumers who are tech savvy and always on the go, it is becoming increasingly common to find retail chains making acquisitions of tech companies that are remotely related. In the most recent acquisition, Dick’s Sporting Goods acquired GameChanger Media, the company responsible for the app with the same name that keeps score of all types of sports.
As competition intensifies on a global level, companies are looking for ways to remain relevant and competitive. It is the hopes of Dicks that this acquisition will help them build up a the formidability of its youth offerings.
To the average person, a sporting goods retailer with 675 locations spread over the United States, may not seem like the ideal candidate to acquire a tech-based company. However, the fact that the entire global economy is being heavily impacted by this massive technology boom, means that technology is showing up in the weirdest places.
To understand this, it will be important to be aware of a major shift in how technology is introduced to the consumer. Ten years ago when a new piece of technology was introduced, it was normally done through a company’s IT department, with the average consumer having limited access to it; however, as the cost of developing technology is decreasing, and the willingness of the consumer to spend the money to have first crack at it, technology no longer travels down a funnel and through a filter. It moves from the manufacturer to the consumer.
The fact that the consumer is becoming increasingly influenced by their access to digital technology has created a demand for customer experience that is facilitated by the most advanced technology. The businesses that are able to provide the best experience, in the most efficient and efficacious manner, will experience the highest level of success.
Dick’s Sporting Goods has a youth offering called Dick’s Team Sports that is focused specifically onappealing to youth athletic programs. This new offering is the result of the recent acquisitions of Affinity Sports and Sombrero.
According to GameChanger, they have already infiltrated the youth market, with more than 165,000 amateur softball and baseball teams using their application to track individual stats of players. Having this type of capacity means that these young athletes can have friends and family members follow their progress through any given season. It is also an easy way for fathers to produce the evidence that supports their bragging rights.
GameChanger CEO, Ted Sullivan, has iterated that creating this type of capacity on such a large scale is much more difficult than it sounds. According to Sullivan, it is much easier to track one game with 10,000 followers than it is to track 10,000 games with few followers for each one. The fact that this dynamic is so complicated actually adds great value to the acquisition, placing Dick’s in the driver’s seat.
Sullivan also iterated that the company is actually solving some of the most difficult problems in the area of sports broadcasting.
The financial terms of the acquisition have not yet been released to the public. Some of the money players for GameChanger include Greg Sands of Costanoa, John Stanton of Trilogy Equity Partners, Jos White of Message Labs and Dan Levine of Tenfore Holdings.
For now, GameChanger will continue operating out of its headquarters in Manhattan, and Ted Sullivan will continue to function as the company’s CEO. With the added resources associated with the acquisition at their disposal, the company will have the capacity to expand to provide stats for more sports. Currently, the company supports basketball, softball and baseball. There should be an expansion in the area of platforms as well. As of right now, the GameChanger app is iOS-only.
It is the belief of the executives at Dick’s that the unique experience that is offered by GameChanger will help to sure up the Dick’s Team Sport HQ offering. The goal is to offer an unparalleled technological advantage to youth who are participating in team sports and the team that they play for.
The key to this acquisition being considered successful will hinge on GameChanger’s ability to optimize the use of the increased resources they will have access to. It is not likely that the company’s current positioning in the market will enough to provide Dick’s with what it needs to remain relevant and competitive over the long-term. Companies are consistently evolving to meet the needs and demands of their customer base, and there will be a number of sporting good retailers and online behemoths on their heels.
It will be necessary for GameChanger to support American football and soccer, both of which are extremely popular in the U.S.
On the other hand, this acquisition will provide Dick’s with an almost immediate boost I capabilities to serve their existing softball, basketball and baseball customer — having the capacity to provide coaches with in-game information, better tools for tracking stats and overall performance, and a way to stoke the excitement of the fans. This immediate boost can provide immediate positioning for the sporting goods retailer, but there will have to be new advancements in what they will be able to offer through this new digital capacity.
GameChanger definitely has the potential to have an immense impact on amateur sports, not only in the United States, but abroad. Sports is a universal language that is understood in every country around the world, and technological integration is the most demanded capacity regardless of age. This move could prove to be quite beneficial for Dick’s over the long-term.
What is not certain at this point in time is whether Dick’s plans on consuming GameChanger into its own operations at some point, or if the company will continue to operate as an independent entity. It is not certain what the advantages would be if Dick’s consumed GameChanger.
The part of the benefit of the acquisition is a foregone conclusion, while the backend benefits still have a question mark attached to them. While it is easy to assume two very successful companies should make one great company, it is important not to lose sight of the importance of chemistry.