This is Buying Sandlot — the only newsletter that focuses solely on the business of youth sports.
Let’s get to it.
In the email today:
📉 Dick’s Takes A Licking
Dick’s Sporting Goods has had better days.
The retail giant’s share price plummeted 30% — a loss of close to $5B in market cap — yesterday after missing Wall Street’s Q2 expectations due to a sharp swoon at Foot Locker, which it bought for $2.4B last year.
[DSG had rallied a little over 4% today before we hit send.]
DSG’s comparable sales were up 4.9% QoQ and it maintained its full-year outlook for 2.5% to 4% growth. But Foot Locker was down 3.6% and its full-year outlook range is now flat to -2%.
DSG also lowered overall net sales outlook for the year by a $200M spread; it is now $21.9B to $22.2B.
Executive Chairman Ed Stack expressed confidence in DSG’s ability to turn FL around over the long haul, but acknowledged FL’s woes and attributed them to several factors:
Inventory build-up, "particularly within certain legacy footwear silhouettes and apparel franchises that simply aren't resonating the way they once did"
Aggressive promotional environment
Lackluster results from limited Q2 launches, retro products
Rebuild of European, Middle East, Asia business “more challenging than expected”
Consumers “even more cautious than expected due to the geopolitical environment”
“What we did with Foot Locker is absolutely the long-term right decision,” Stack said. “Although right now, I'm sure some of you are kind of scratching your head, but we absolutely believe long term was the right thing to do.”
As for GameChanger: DSG CEO Lauren Hobart mentioned the DSG-owned youth sports platform in her headline quote in the earnings release — the first time in two years she has done this. She then expanded on GC later in the call:
“Earlier, I mentioned that GameChanger has become an increasingly important asset for us, contributing strong financial performance and providing meaningful data and athlete engagement. GameChanger continues to deliver exceptional results. And with it, we have one of the most comprehensive youth sports ecosystems in the country. This gives us a powerful advantage as we continue to deepen our connection with athletes, families, coaches and teams. It also helps drive our broader business, including our Dick’s Media network, by allowing us to better understand and serve the youth sports community.” — Hobart
DSG did not release any new GC-specific numbers. But CFO Navdeep Gupta said GC and DMN "will start to become a bigger driver of the merch margin expansion."
So it’s time to play our favorite game— How many times was “GameChanger” mentioned on the call?
As always, counts are unofficial until dimples and hanging chads are fully inspected by an elite team of nerds:
Q2, 2024: 7
Q3, 2024: 11
Q4, 2024: 14
Q1, 2025: 24
Q2, 2025: 19
Q3, 2025: 5
Q4, 2025: 10
Q1, 2026: 5
Q2, 2026: 10
There was nothing really particularly new about GameChanger the product, but as you see, Dick’s execs leaned on it heavily to soften the Foot Locker blow.
GameChanger itself is a $150M SaaS business inside a company that will do $22B in sales and around $1.5B in operating profit this year. It’s a small piece of the business on its own. However, given the increased frequency and the manner in which it was mentioned, it may punch above its weight in terms of its ability to gather customer data and improve margins. How? I’m not an accountant, but I believe in some cases advertising revenue on Dick’s Media Network and GameChanger can effectively reduce inventory costs, thus improving margins in other parts of the business while not being attributed to GameChanger directly. This may be why you rarely see Dick’s update GameChanger revenue (once per year) but continually focus on it as a key part of the business.
This is one of the advantages of a youth sports platform living inside a strategic parent company— the direct revenue alone is great, but it can drive benefits beyond its walls. And, in this case, help tell a profit story in the face of BIG SHOE headwinds and Foot Locker’s significant struggles.
One thing that jumped out to me, Stack elevated GC in describing the overall business: “Dick’s, Foot Locker and GameChanger.” First time I recall seeing GameChanger included alongside the two major components of the business like that.
🏉 A continent’s largest tournament, streamed in full*
Tropical 7s, held annually in Tampa, bills itself as the largest youth rugby event in North America.
Every kick, phase, scrum and try at this year’s edition was streamed thanks to Blackmagic Design.
Youth sports production company Game On Live Studio uses BMD products in all its work, including its role broadcasting Tropical 7s — 250+ teams and 750+ matches across 15 fields (and 1.2 million square feet) over four days of frenetic action, streamed live in its entirety at a level not previously seen in the sport.
ATEM Mini Extreme ISO, Mini Pro ISO switchers for multi-camera streaming
ATEM Streaming Bridge converter
DaVinci Resolve, the world’s most popular post production solution
Everyone who watches youth sports — athletes, parents and grandparents, coaches, college recruiters — has come to expect streaming that looks and sounds professional.
Blackmagic Design can deliver just that for your club, event, facility of school. Our suite of affordable products are the same high quality as those used by professional sports teams and in Hollywood, delivering easy-to-learn multi-cam streaming that open new revenue streams.
For more information, visit Blackmagic Design.
*Sponsor
🚫 Reeplayer CEO On ‘End Pay To Play’ Initiative
This was spirited!
Reeplayer founder and CEO Orhan Basak Ajredinovski joined the podcast to discuss his company’s new “End Pay To Play” campaign.
How it works: The AI-powered camera maker partners a brand sponsor with a youth sports team; the sponsorship gives the brand exclusive marketing on the team’s live streams, and Reeplayer sends 40% of its profits to the team.
We have been skeptical of the messaging and asked specifically about the math on this. The answer is nuanced and yielded a thoughtful discussion on what streaming sponsorship can and can’t do.
You need to listen/watch in full to get the full breadth of the wide-ranging conversation. But some highlights:
Sponsorship packages start at $5K; about $2.7K of that goes toward covering a team’s camera and live streaming package
Sponsors would continue to cover streaming (about $1.2K) in future years
Ajredinovski said Reeplayer is currently sending $1K to $3K to teams
Reeplayer plans to tell families how much their team got to ensure funds are deployed properly
Ajredinovski said Reeplayer has six brands on board with the initiative, including the Exer Urgent Care chain; he did not specify the number of cameras sponsored
Ajredinovski also said Reeplayer has had talks with Bank of America
Onto the takes!
I am going to rehash something I asked on the podcast a few months ago:
What is an acceptable cost for youth sports?
I realize this is a bit of a nebulous question. But I think it is one we have to answer for action to be taken and progress to be made. Because making it free for all is a) not a realistic goal and b) would likely have a negative impact on outcomes and quality.
We’re comparing apples and kumquats here, but society has kind of agreed it wants gas to be $3 a gallon and things get really painful when you hit $4.
There are obviously many more variables at play with youth sports. But the goal should be to reach a sweet spot that facilitates maximum participation in the wide middle and has the ability to assist the low end while acknowledging the top end will always exist and does not hinder everyone else.
Also: Ajredinovski talked about how sponsors can see actual proof their investment is working from a business perspective, as opposed to when they would slap their brand on a jersey front or an outfield sign and hope for the best. And he’s absolutely right — to a point.
I come at this from a journalism perspective. Newspapers spent decades providing coverage of what was believed to be of importance, interest and relevance to the audience. And then the internet took off, actual metrics emerged and it completely overhauled editorial decisions and news judgment.
But sometimes the correction goes too far. Just because the “Real Housewives” recaps get 10x the web traffic of a report about the state legislature does not mean you abandon the latter. There are just some things that transcend the conventional wisdom and should continue as is.
I wonder if the “traditional” approach to youth sports sponsorship will prove to be just that, especially at the local level.
Joe’s Pizza can pay $5K to have its ads on the Smallville Smashers 8U live streams and maybe sell $6K in pies while the team gets cut a $1K check. Or they can hand $5K directly to the team and get their name on the jersey because it is important to the community, regardless of the ROI.
⚽️ LeagueApps Teams With MLS Club
The youth sports management platform announced a strategic partnership with the New York Red Bulls (who practice and play in New Jersey).
LeagueApps is now the official registration partner for Red Bulls Youth Programs, which will migrate its operations over.
Streamlined camp management
Integrated health, compliance tools
Automated family communications
Player evaluation functionality
RBYP says it serves over 50K athletes and families annually with both community programming and the Red Bulls Academy pipeline.
🎥 TeamSnap Completes XbotGo Integration
The live streaming partnership between the management platform and the AI camera maker is now up and running for all TeamSnap ONE subscribers.
TeamSnap CEO Peter Frintzilas and XbotGo founder and CEO David Tan sat down with Buying Sandlot back in April when the partnership was announced.
Users will need to buy XbotGo’s Falcon camera (priced at $799) to use the live streaming function. Organizations are eligible for bulk purchase discounts.
A TeamSnap+ subscription is needed to access replays and custom highlights.
🗣️ Sprocket Sports Uses AI To Help Parents
A busy day for the platforms!
Sprocket has added the “Ask Coach John” chatbot to its mobile app. The tool “gives real-time advice to the parents of young athletes regarding common issues such as playing time, sideline behavior, player progress, handling disappointment and more."
The chatbot pulls directly from youth sports thought leader John O’Sullivan’s books, blog posts and podcast commentary.
Quick Take: Digital tools to help parents — both in supporting their children and not behaving like idiots — look like a popular new industry trend.
📝 Youth Sports News + Notes
Otto Sport AI has rebranded its SportsWrench volleyball tournament management platform as Otto Event. Non-volleyball sports can use the ticketing function.
Rep. Kevin Kiley (I-CA) told USA Today his House Education subcommittee could hold a hearing about betting on the Little League World Series. He acknowledged the activity is confined to illegal offshore entities, but said it is “deeply troubling.”
LeBron James will partner with the PGA Tour on a two-day golf event in Akron, Ohio, next summer that will feature amateur players competing alongside professionals. It will also have a mentorship program for kids associated with his charitable foundation.
A group of doctors is calling on the Big 12 to pause its much-discussed sponsorship deal with Monster Energy. The physicians have expressed concern given energy drinks can be a health risk for kids.
🔗 Youth Sports Links
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Good game.