Interview With Leigh Steinberg And Sports Tradex Founder Ben Lipson On New Virtual Trading Technology
Sports Agent Blog contributor Amanda Grant was in New Orleans, Louisiana during Super Bowl week, attending many events and parties on behalf of this website. One of the parties that she attended was the Sports Tradex Launch Party. Hosting the event was Leigh Steinberg and founder of Sports Tradex Ben Lipson who were gracious enough to make themselves available to be interviewed by Grant.
Amanda Grant: Thank you for taking time out of your busy schedule to talk to me about Sports Tradex and the event that is going on tonight. Would you briefly tell me about Sports Tradex and how you came about with the idea?
Ben Lipson: Sure. First, I’m meeting Leigh for the first time tonight also, so I want to thank him for everything he’s done and for being our host. I can’t think of a better person to be at our launch party to help us get exposure.
Sports Tradex is a fantasy sports stock exchange for predicting team and player performance. Users compete in a virtual account or a virtual stock market for cash prizes by predicting things like who will have most fantasy points in the Super Bowl. We also have some real world events like the whole course of the playoffs every team might be a stock and ultimately the team, in this example the team that wins the Super Bowl will be worth $100 a share and everyone else ultimately worth $0. Until the outcome is known, the trading occurs all between users on the site 24/7 including during games, which is a really exciting, new level of engagement for the fan.
Amanda Grant: Leigh, what attracted you to Sports Tradex above all other Fantasy Sport companies?
Leigh Steinberg: Well my 23 year client and close friend Warren Moon is involved in this event tonight, so I took a look at the technology and it looks very promising. I think we all have an interest in expanding the perimeters of fan involvement. Years and years ago I came up with the idea to put athletes up on the internet, and this was in the days when you still had to access AOL to get on the internet. We created a little company that had athletes doing weekly diaries and talking about their charitable foundations. It had an E-commerce application. It was obviously years ahead of its time. My partner Jeff Moorad and I ended up selling our shares to venture capitalists, but I’ve always seen that the real battle in sports isn’t labor vs. management. The battle for something like football is against baseball, basketball, home box office, Walt Disney World and every other form of sports. Discretionary entertainment spending. So really, the job has always been to try to find insular revenue flows that can take advantage of the multiple platforms that exist now. I’m always interested in expanding that horizon.
That concept of being involved in a game while the game is still going on and the ability to trade and go back and forth is an intriguing part of Sports Tradex. But fans have always wanted a way to feel like they were vested in the process, and so I think it’s one of a number of intriguing, new technologies that takes advantage of the multiple platforms. The fact that this world has shifted from the world that I grew up in where we read a newspaper and we watched a few television stations, to this incredible new media.
This has backing from some friends of mine in Newport Beach, so when they asked me to host (and we were not throwing our normal 5,000 person Super Bowl Gala), I thought it was great and I think to the extent young people like Benjamin are thinking outside the square, thinking outside the box, that’s exciting.
Amanda Grant: Right, and especially with the Sports Fantasy industry being a $1.5 billion industry, where do you see Sports Tradex excelling where others may fall short in the fan experience?
Ben Lipson: I think I obviously agree with Leigh’s comment there about the multiple platforms and we see from doing some marketing research that about 55% of fans report watching the TV, which is the first screen and then also operating with a second screen whether it’s an IPad or mobile device. I think that some of the traditional fantasy sports sites or companies fall short on capitalizing on that second screen experience, because they’re very static season-long, watching the stats come in and slow to move to a more engaging, more active fan experience. Were also interested not just in season-long events but day long events, one day events like the Super Bowl or short-term, middle term events like a playoff. I think that’s an area of the fantasy industry that’s still relatively small compared to traditional season-long events, but very much a high growth area.
Amanda Grant: What is your ideal demographic?
Ben Lipson: The idea is to create a marketplace for predicting the performance of anything in sports and I think it can expand to a very wide array of sports and types of contests and games. I think the goal would be to feed stats into the site to give people enough information to choose their own strategy and have flexibility. That’s where the in-game activity aspect appeals to the fan. It’s sort of for any level of fan involvement, we want to range the whole spectrum from someone who is just a very casual fan to someone who is going to be a very, very active player.
Leigh Steinberg: I think probably the point of demarcation is that this offers immediacy of watching a screen and events unfolding and being able to adjust one’s position to changing circumstances. So the ability to, as the game goes on, to be engaged in trades, be engaged in dynamics to help people have a better chance of success as opposed to a fantasy league where people make their picks at the beginning of the season and have the ability to tinker around with them, but once the game begins, that is a passive experience. This can be an active experience, and I think that merging technologies like this all serves to pull the sports experience for a fan from a passive watching standpoint to a more active involvement. I’ve seen technologies where, while a game is going on, they’ll run fantasy statistics down one side and there’s texting going on back and forth. I think the whole thrust is to move fans more and more to bet and speculate. They love to top someone else in the predictive concept and I think it captures it. I think we’ll be able to see more and more permutations of it, but I think Benjamin and Sports Tradex have a very intriguing platform that can accommodate a variety of events that are occurring in varying stages of time.
Amanda Grant: With the platform in real-time and engaging fans, where do you see the Sports and Entertainment Business within the next three to five years?
Leigh Steinberg: Well, I’ve written for Smithsonian Magazine and for SportsBusiness Journal on the future of sports and it – I think the continuing evolution will be towards fan involvement, whether it’s sitting in a stadium and being integrated into the calls of the game, whether it’s giving the fans a chance to call actual plays, whether it’s giving fans a chance to do their own review of an official’s call on the field. I think that seat will no longer, at an event itself, be a passive place, but a more active place. I went so far (and perhaps this is a little too much science fiction) to imagine someone sitting at home, wired in a way that will let them simulate the blow occurring on the field, getting an actual visceral experience where they can interact that way. In the same way we’ve seen the fragmentation of the whole concept of the internet with various niches that are being carved out. Something like this gives fans the opportunity again to be more involved and otherwise combines the play of the stock market with the trading of players or team or franchises. I think we will continue to see this trend in all sorts of ways. The limits are only what the limits of creativity are. The more we engage fans, the healthier sport will be. Think about the fact that, if you take football, there are 10 home games and 70,000 fans as a part of San Francisco, which is the fifth largest market. That means some tiny minority actually get to come see the sport played live. Now how about everyone else?
I think it dove tails with the development of the smart television system that will enable more and more capacity, and with the ubiquitous nature of the cell phone. Today, I saw people check into flights with their cell phones. People are able to pay their bills and use the phone in ways that are again used to be conceptualized as sort of science fiction.
Amanda Grant: Do you think that with the added fan activity and interaction there will be more pressure for franchises to compete with the at-home experience?
Ben Lipson: No, because the teams and leagues are sophisticated enough to have their own social media outlook. The leagues are moving rapidly in every way to maximize their brands. One of the reasons I always encourage teams to leave 10,000 seats aside in the stadium that are distributed under different circumstances, given to lower-income school kids, is that at least your building for the future of the sport. That generation grows up so computer savvy. There are three-year old children that can operate a tablet better than I can. This is so much a part of the way they view the world, the way that they experience the world. This kind of new company – new technology – captures the next generation of sports fans and pulls them into the experience.
This country right now is in the middle of an NFL craze that is of unparalleled proportions. In the first week of the NFL season, the top 90 Nielsen rated shows were topped by 5 NFL nighttime football games. That included the pregame show, Football in America, and it happened again a couple of weeks ago. So that means 90 entertainment options, NCIS, Dancing with the Stars and every other form. We’ve never seen one small entertainment, much less a sports league, be that dominant. It just never happened, and right after that, college football, so this technology lends itself to both of those games and it can go much further. It can go much further, as they go on to NASCAR and every other team league and all the rest of them.
Amanda Grant: Where do you see Sports Tradex in this growth of Fantasy Sports Industry or interactive fan experiences?
Ben Lipson: I think we’re one of many types of technology offering that increased fan experience. We hope to capitalize on the lure of making predictions and challenging your friends and watching sports. Plus, of course, winning cash prizes which are incentives for everyone to play. I think that we’ll be hopefully part of a group of companies and technologies that is the future of that kind of fan involvement.
For fantasy sports, I certainly think it’s going that direction for the large sports and entertainment world, as well, but our technology can be tailored to any length of event, any type of event it can be customized so it’s just the people in stadium watching that particular game or people in one sports bar. Perhaps you could have something just for Buffalo Wild Wings that’s just for the people within there. It’s very customizable, very flexable and very involved. I think that is hopefully part of the future.
There is a mad race to see which technology will garner enough attention. Technology like this doesn’t need to involve 100% of the fan. If they are able to get a small percentage, they can be very, very successful. I think this is part of that ongoing creative drive of entrepreneurship. One thing is for sure – as we sit our economy sits in a battle with global economies to see who will succeed. As we have been startled to see – many of the products we’ve traditionally dominated in the world don’t sell anymore. This area, technology, entertainment – we can still dominate – because this Tradex or any of these new platforms can be played internationally, so that the whole world, the desire for integration of sports and fun and immediacy of being in a contest competing with other people day trading, speculating is irresistible universally.
Amanda Grant: I don’t want to take up too much more of your time, but I have one last question. Understanding that Sports Tradex deals a lot with predictions and odds, who do you think is going to win on Sunday? Sports Tradex has the 49ers listed at 65% over the Ravens. Do you think the 49ers will pull it out?
Ben Lipson: As a fan. I hope so. Yeah.
Leigh Steinberg: Why don’t you explain where that 65% comes from.
Ben Lipson: It comes from users recognizing that the value of a team is tied to whether or not they win the Super Bowl. The value is set by Sports Tradex at a hundred Sports Tradex dollars in the competition marketplace. So for the 49ers to be trading at $65 can be translated as a 65% chance of winning.
We all know how that turned out.