Goldman Sachs is Wrong: Generative AI is Revolutionizing Sports

Goldman Sachs is Wrong: Generative AI is Revolutionizing Sports

Goldman Sachs published a report last month entitled "GenAI: Too Much Spend, Too Little Benefit?" casting doubt on generative AI’s ability to deliver significant financial returns. The investment bank and financial services company was critical of the emerging tech’s seeming inability to solve complex problems, and the power it will require to keep up with increasing hyperscaler demands (think: Google, Microsoft).

While those concerns appear to be valid, they miss the bigger picture.

Generative AI’s true genius is in its ability to democratize access to advanced technological capabilities. Even those with limited programming skills can effectively leverage these powerful computer systems to simplify or automate routine operational tasks, freeing up human resources for more complex or strategic ones.

In industries where human resources are often limited –like sports– that capability holds tremendous value.

To grasp Generative AI’s potential impact on sports businesses, one must first understand how it differs from traditional AI and machine learning.

Traditional AI and machine learning powered solutions analyze existing data to make predictions or decisions (see: NFL Next Gen Stats or San Francisco 49ers' Executive Huddle platform). Coaches, broadcasters, fans, and team personnel all use its outputs to better understand game context or improve the in-venue experience.

Generative AI, by contrast, can create new content based on patterns learned from existing data. Think of it like a creative assistant capable of producing original text, images, or code.

There are a multitude of ways for sports properties to use the emerging tech. Below are some of the common ones in practice today.

1. Content Creation at Scale

Rights owners are using Generative AI to create everything from player personality profiles to social media posts with unprecedented speed and personalization. While the results are not always 100% accurate or focused, the tech has proven efficient at reliably crafting messages that align with an organization's brand guidelines and tone and drive precise consumer actions (think: the purchase of game tickets).

As noted two weeks ago, several MLB baseball teams have found success using Persado's Motivation AI to assist with subject line creation for marketing emails and SMS messages.

2. Hyper-Personalized Fan Engagement

Generative AI can help drive fan interactions with a rights owner. It is capable of creating personalized chatbots that engage team supporters with trivia or tailored merchandise offerings, and simulate conversation as real people in their own voice (think: star players, coaches).

3. Sponsorship Optimization

Generative AI is proficient at analyzing sports sponsorship decks and suggesting improvements based on successful past proposals. One recent case-study showed a gap of nearly $300,000 between an emerging league’s asking price and the value of the assets included within the sponsorship package.

The tech is also being used by select rights owners to spark creative activation ideas and help make their offerings as attractive as possible.

4. Next-Gen Scouting and Recruitment

While traditional AI can be helpful in analyzing a player’s historical performance, Generative AI has the ability to combine an individual’s physical data with unstructured qualitative scouting-related data from sources around the globe (see: Scout Advisor) and turn it into a detailed report that predicts his or her development scenarios.

5. Predictive Game Strategy

While many teams, including the San Francisco 49ers and Philadelphia Eagles, use data and analytics to refine their offensive strategies, Generative AI can simulate countless game scenarios and create innovative play designs making it a powerful tool.

As we look ahead, the potential applications for this revolutionary tech in sports appear boundless. Look for rights owners to begin deploying advanced injury prevention programs (building on initiatives like the NFL’s ‘Digital Athlete’) and AI-generated highlight reels tailored to the individual fans’ preferences.

And for teams and leagues to leverage these powerful models to enhance their content management and media search capabilities. In fact, several major sports organizations are actively exploring agent-based workflows.

"If you're doing metadata tagging manually, you're never going to be able to discover everything,” NFL deputy CIO Aaron Amendolia said during a panel discussion at NAB 2024. “Looking at Generative AI, natural-language search, indexing with computer vision, our archives of media and content —including what's coming in and what has happened in the past— we can tap into so much more detail than with traditional tagging."

To illustrate his point, Amendolia used the following example.

"Patrick Mahomes, in the rain, with a Pepsi sign behind him, and a fan in face paint as well. You can't metadata-tag for all those contexts,” he said.

Sure, some investments in Generative AI may need right sizing (think: Nvidia chip orders). And the revenue growth expected from implementation may be more limited or take longer to realize than anticipated.

But that’s common with game-changing innovation. It does not mean the technology is without benefit or value. It took sports organizations years to figure out how to properly capitalize on social media platforms.

Those who invested early in Generative AI are starting to realize its transformative potential. The four MLB clubs using Persado have reported conversion rate increases between 7.5% and 15% on ticket sales; gains that equate to as much as $5.5M in revenue growth based on our estimates (which use average attendance and ticket price in the calculation).

Of course, adoption isn't just about boosting next quarter's numbers. It's about reimagining how the organization operates, engages fans, and creates value.

In the high-stakes world of professional sports, a slight edge on or off the field could be the difference between victory and defeat. Generative AI isn't just providing an edge—it's redefining what's possible.

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