Artificial Intelligence Will Change Sports Forever, Here’s How

Artificial Intelligence in sports is becoming the newest frontier for investment & innovation of novel technology

Key Takeaways

• The global artificial intelligence market in sports is projected to grow to $3.6 billion by 2027 at a CAGR of 32.8%
• AI in sports can help facilitate fan relationship management, news & content, media rights, merchandising, and team management processes like athlete training, nutrition, and game plans
• 2020 saw $1.4 billion in venture capital invested into companies in and around the field of sports AI

Many Atlanta Braves fans claimed Ron Kulpa is the worst MLB umpire after the ump’s poor performance during game two of the World Series a few weeks ago. This story sits in the middle of a wave of criticism that has called for umpires and other sports’ officiating crews to be replaced by computers over the past decade. Many leagues are starting to listen. Whether you are a staunch sports conservative and enjoy the human element of the game, a full robot umpire advocate, or somewhere in between, it’s time to recognize that a new era of Artificial Intelligence in sports has already begun. AI is used for media & fan experiences, management & operations of a sports team, in-game activity, and has the ability to revolutionize sports forever. Given such potential, AI technology in sports is expected to grow as an industry well into the next decade, becoming an avenue for investment, innovation, and revolution for the games we love most.

The rising use of data in sports is driving the staggering growth of the use of AI in this industry

Through 2027, the global artificial intelligence market in sports is expected to grow to $3.6 billion by 2027, posting a CAGR of 32.8% through the end of this period. Driving this growth is the rising use of data in sports and the extensive applications of AI to make sense of this ever expanding universe of information. On the business side, AI can help facilitate processes including, but not limited to, fan relationship management, news & content, media rights, merchandising, and even chatbots. Beyond general operations, AI has the ability to facilitate athletes’ training, nutrition, and game plans. This technology also has the ability to help teams manage their talent and scouting processes. The analytics market relating to team play & management is currently valued at $885 million and is expected to grow at a CAGR of 21.3% through 2021. One of the key uses throughout all these applications is AI’s ability to aid in large, data-based decision-making processes. In a 2019 PwC report, it was noted that “AI is impacting nearly every professional sport and is now also filtering through to grassroots participants.” Extensive applications and a growth of data in the industry have set the stage for a new era of sports.

Major investment and a number of innovative companies are driving the industry

The growing demand for AI in sports has already led to groundbreaking innovations in the field. Perhaps one of the more well-known innovators is NEX Team. This company developed a computer vision and AI-based app called HomeCourt that can help basketball players improve skills like shooting; the app can measure statistics like launch angle, timing, reaction time, and more, all in real-time. The company has already seen significant investment, just recently completing a $25 million series B investment round. In tennis, IBM’s Watson is already being used to watch matches and generate highlight clips that are the most “exciting” which can then be shared on social media. Cutting across most sports is Catapult, a sports performance analytics company that has created wearable technology which can be used to track a player’s performance throughout games & practices. The generated data can then be used with their computer applications to create meaningful findings that optimize performance for athletes. The company already provides its technology for 2,970 teams across 39 different sports.

It will be hard for 2021 to eclipse 2020’s $1.4 billion worth of investments in the field, but major headway is still being made. The first eight months of 2021 showed $786.8 million of venture capital through 103 announced rounds being raised in the field. Some of the most significant investment announcement have included Catapult’s aforementioned $25 million Series B funding, AI-enhanced strength training company, Tonal’s, $250 million Series E, and video & analytics company, Atrium Sports’s, $70 million round. There is significant capital available for sports AI companies with no sign of letting up anytime soon.

Recent drawbacks will be overcome by the need for sports teams to leverage this technology

There are some caveats to consider when looking at AI’s potential impact on sports. PwC cites that without proper deployment, or a proper team to build the necessary AI capabilities, the technology “will provide meagre benefits at best or, at worst, result in unexpected and undesired outcomes.” It’s this thought that feeds skeptics’ doubts around AI’s potential impact in sports, and why many expect to see its developments much further down the road. To skeptics, we might be a bit far from replacing Ron Kulpa with a computerized officiating software.

Additionally, in 2020, COVID-19 caused a 1.4% contraction in revenue in the sports analytics market, forcing many teams to make significant budget cuts and lay-offs. Despite these concerns, Ben Mackriell, VP of data, AI, and Pro Products at Stats Perform, says despite having had his own doubts about AI in sports, “there is a greater level of understanding in the market in general that AI is simply a mechanism that enables better experiences, with the core ingredient being data.” Many companies and pro-teams already have full staffs of data scientists and engineers that Mackriell thinks would be “unthinkable” not have in this day and age. AI is slowly becoming a necessity to be a successful team in sports, and in leagues where the slightest performance edge could mean victory, broader adoption of this technology is all but inevitable.

AI in sports is a relatively new phenomenon, but one that is here to stay. Sports organizations have already begun to realize the power of AI, and what it can do to really bring their organizations to the next level. This potential, combined with the increase in raw data produced by the modern sports age, has created a match made in heaven between AI and sports. We have consequently seen major investment in the field through the last 12 months, leading to enormous efforts that are driving the innovative technology that will act as the cornerstone of the industry for decades to come.

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