A Pivotal Shift in the Youth Soccer Registration Landscape
Almost reminiscent of Apple Inc. paying $1 billion to Intel, what will be the next generation of youth sports registration technology? After the $45 Million acquisition of his competitors, Alex Alt, CEO of Stack Sports envisions a new pathway for technology to impact youth soccer.
In America, millions of youth soccer players register every year, and the registration process flows from player to the club and then to the state associations.
The youth soccer landscaped was rocked when a new Stack Sports acquisition was announced on August 22, 2019. While acquiring competitors is nothing new for big businesses, in the youth sports world, when one fierce competitor buys a legacy leader whose clients it had been ravaging — it is big news.
When the announcement of Stack Sports extending its cloud-based portfolio offering and growing its customer base by buying Dick’s Sporting Goods technology registration platforms of Affinity Sports and Blue Sombrero came out early Thursday morning, phones starting ringing around the country. This was a pivotal acquisition of direct competitors.
The big question with the fall season’s registration imminent or already underway was, “How will this impact my organization and our players?”
Stack Sports Acquisition for $45 Million Recap:
Stack Sports is the largest and fastest-growing global provider of sports technology and is a partner of U.S. Soccer, tasked with creating the U.S. Soccer National Data Center (NDC) and U.S. Soccer Connect, an integrated online sports management tool created to support the day-to-day operations of U.S. Soccer Member Organizations.
Combining Stack Sports with Affinity Sports and Blue Sombrero under one organization strengthens Stack Sports’ position in the sports software industry, creating the largest customer-base in the sports tech market. With a reported $1 billion of payments managed, Stack Sports’ combination of the technology solutions will now serve more than 25,000 sports organizations.
This is a clearly a notable technology acquisition.
The goal is to combine the efforts and grow a best-in-class technology solutions for the sports industry. Affinity Sports provides specialized software management technology to various youth sports National Governing Bodies and is a partner of US Youth Soccer, the largest youth sports organization in the word. Blue Sombrero is a provider of websites, registration, and league management tools for youth sports organizations and its customers also include prominent organizations.
Even U.S. Soccer’s Pablo Garcia, Director of Special Projects has welcomed this approach. “Stack Sports acquisition of Affinity Sports and Blue Sombrero has a positive impact on what we are looking to accomplish at U.S. Soccer,” said Garcia. “Bringing together some of the best technology offerings in the industry reduces friction within the soccer ecosystem by simplifying participation pathways for our members and accelerates our efforts to unlock the underlying data within the game.”
Far from a “killer acquisition” designed to eliminate competing solutions — Stack’s game changing acquisition is meant to help accelerate a singular solution after years of the youth soccer market being trapped in a battle for customers.
SoccerToday Interview with
Alex Alt, CEO of Stack Sports
Diane Scavuzzo Interviews Alex Alt, CEO of Stack Sports
Diane Scavuzzo: Congratulations on the acquisition of Affinity Sports and Blue Sombrero. Stacks Sports has acquired 27 companies prior to this announcement — I would love to understand your strategy in the market …
Alex Alt: Our strategy is to be the preeminent provider of software to the sports ecosystem, and particularly in the youth sports ecosystem. Now, we have a substantially larger aggregate footprint than the competition.
The marketplace, as I suspect you’re well aware, is highly fragmented. What we’ve discovered is we’ve acquired these different businesses, and that there’s a tremendous amount of friction in the marketplace because of the disparity of technology providers, and systems that don’t talk to each other.
This acquisition is a huge step towards reducing the friction in the marketplace, and it’s friction for administrators, for parents, for coaches. The more sports organizations, club leagues, and teams that we can have using a single software platform, such as the one that Stack provides, the better it is for the industry.
Diane Scavuzzo: Stack already has a large share of the market. And, Affinity had, I believe, a slightly smaller share of the market compared to Stack. You gobbled up your main competition …
Alex Alt: Yes.
Diane Scavuzzo: As these two platforms are direct competitiors, are you favoring one platform over another? Is it the intention to merge the platforms?
Alex Alt: It is our intent overtime to consolidate our customer base onto a single best in-class platform that would include the best of what our two distinct platforms offer today.
We’re having discussions with every single customer across the all the ecosystems. Whether you’re a customer of Stack, Affinity, or Blue Sombrero, you will ultimately benefit from this transaction.
In the future, instead of two competing companies effectively investing in highly similar products, we’re going to invest everything into one single platform, and combined, we are investing more in technology and client care than anyone else can probably begin to match.
Together, we think we can innovate faster.
Customers have a tremendous amount to look forward to, and again, our early discussions with the customers have gone extremely well.
Diane Scavuzzo: What has been the biggest challenge rolling out the current Stack platform?
Alex Alt: I would say that the challenge, in many cases, has to do with the unique need and wants of the various organizations that operate in the space.
There’s a fine balance between creating software that’s highly innovative for the market, and has great usability, and creating bells and whistles that are specific to how one sports organization or association does business.
Deploying software based on unique workflows has been a challenge for the industry as a whole, because if you develop one feature that’s only used by one customer, that same resource could’ve been used to develop a new feature that could be used by all.
The market today is at an unbelievable crossroads.
We’ve enhanced our technology — as has Affinity and Blue Sombrero —to a point where the software is increasingly feature rich so that administrators, as well as parents and athletes will have a better experience.
Diane Scavuzzo: This is the most significant technology acquisition in the youth sports market. $45 million — Is that the most you’ve paid for a company?
Alex Alt: Yes, this is certainly the largest acquisition we’ve ever made, and I would also characterize it as the most strategic.
In terms of aggregate investment in software, combined from both Stack, Affinity, and Blue Sombrero overtime is certainly well north of $100 million.
Diane Scavuzzo: When do you think you will have the solution ready for the market? Do you think in 12 months you’ll have the combined singular platform that will work?
Alex Alt: Sooner, much sooner. I’ve got a timeline and it’s going to be much sooner than 12 months.
Our owners have also made a significant investment into the combined entity to fund incremental innovation and technology developments in the very near term.
The aggregate amount of funds that were put into this business yesterday included the purchase price of Affinity and Blue Sombrero, but also included a significant additional sum that we’ll be deploying into our technology assets to effectively integrate the businesses.
To do it right takes money, and we didn’t want to be operating in an environment where we didn’t have funds to lean in heavy on investment of the combined entity.
Diane Scavuzzo: How is the acquisition going?
Alex Alt: We welcomed the Affinity and Blue Sombrero teams to Stack Sports and the collaboration between the teams is like nothing I’ve ever seen in a transaction like this. The Affinity and Blue Sombrero teams are going to play an absolutely mission critical role in the future of these combined businesses, and we’re fired up to have them be a part of the Stack organization.
Diane Scavuzzo: Blue Sombrero and Affinity were never merged together as a singular platform. Are you looking to keep them unique and separate? Or is the plan to integrate them?
Alex Alt: The goal is move towards a singular platform and, we think there’s an amazing opportunity to integrate CaptainU with our team sports registration platform.
Diane Scavuzzo: From your ‘CEO’ perspective, what does the future look like?
Alex Alt: A single, best in-class technology solution that is the clear industry leader. Our goal is three fold.
- Increase participation in the sport,
- Simplify the administration process,
- Develop athletes.
In today’s world, we think technology is one of, if not, the most important lever to accomplish those three objectives.
From the time that this company was founded, clearly up until today, and you know this because you know all the players in the industry, there’s a significant amount of friction in the technology landscape. We’re looking to reduce that friction.
There are billions and billions of dollars that are spent even just domestically on youth sports, and that number is a multiple of itself if you include the world.
We think there is a significant opportunity to create a better experience for sport organization, leagues, clubs, teams, and athletes.
And, at the same time, operate a business that’s a profitable business, that is, basically, that makes money based on the value that we provide to the industry, to our customers, and to the ecosystem more broadly.
Diane Scavuzzo: So, one major followup question, U.S. Soccer would like to know how many youth soccer players there are in America. In fact, we would all like to know this number. When do you think there may be an actual figure?
Alex Alt: U.S. Soccer Federation is a significant strategic partner to Stack and vice versa. Today, we are further with the U.S. Soccer Federation than we’ve ever been on having a complete look and understanding of the domestic soccer ecosystem and the players in that ecosystem across the entire industry.
As U.S. Soccer Federation’s partner building their National Data Center, we are aggregating data from across the entire ecosystem to help them get that unified view.
I can tell you with 100% certainty, that within the assets we control, we’re heavily focused on realtime data exchange with the U.S. Soccer Federation. We believe that’s a unique advantage for customers at the association, club, team, and league level who are using Stack’s products to manage their soccer programs.
Diane Scavuzzo: Fabulous. You have been absolutely wonderful. I appreciate all of your time. Is there anything else that you would like to make sure our readers know?
Alex Alt: No, I don’t think so. You’re super dialed into the industry here. I just had to tell you, your questions are wildly insightful, and I appreciate the thoughtfulness of the questions.
Diane Scavuzzo: Thank you, that is very kind of you. Thank you again for your time.