Innovation in sportstech is accelerating at an extraordinary pace.
Whether it relates to wearable performance tracking, safety equipment and monitoring, AI-driven analytics to immersive fan engagement platforms and smart venue infrastructure, new technologies are transforming every aspect of sport. However, innovation alone does not guarantee commercial success. For sportstech businesses, the real challenge lies in monetising that technology, commercialising it effectively and achieving international scale.
This is where licensing for sportstech plays a critical role. Often the most valuable market for sportstech is not at the elite level but instead translating that technology into the consumer or grassroots market. In order to achieve this, your sportstech business may need to scale its operations rapidly, or more preferably, seek to licence the technology to allow faster growth and market adoption.
A well-structured licensing strategy enables innovators to convert intellectual property into revenue, expand into global markets efficiently and build scalable, high-value businesses without incurring the operational burden typically associated with growth.
Licensing for sportstech as a monetisation strategy
At the heart of every sportstech innovation is intellectual property (IP). Whether this is a valuable brand, patented hardware, proprietary software, data models, algorithms or platforms, this IP is a hugely valuable commercial asset. Licensing allows businesses to grant third parties the right to use this IP in exchange for financial return, whilst retaining ownership and long-term control.
Licensing creates multiple monetisation opportunities. Rather than relying solely on direct product or service sales, sportstech companies can generate revenue through upfront licence fees, recurring subscription payments, royalties linked to usage or revenue-sharing arrangements. This approach enables businesses to monetise the same underlying technology across multiple customers, sectors, and territories.
For example, a single performance analytics platform may be licensed to multiple professional teams, governing bodies, broadcasters and sports media companies simultaneously, each under different commercial terms. This diversified revenue model strengthens financial resilience and enhances business valuation.
More importantly, licensing for sportstech shifts the focus from selling products to commercialising IP through appropriate partners who have a vested interest in its success. Investors and strategic partners increasingly recognise the value of IP-led business models, particularly those capable of generating recurring revenue with limited operational cost.
Licensing enables efficient commercialisation
Entering new markets often requires manufacturing capability, regulatory compliance, sales infrastructure, distribution networks and ongoing customer support. This can make the commercialisation process for sportstech innovators complex and resource intensive. For early-stage businesses, building the required infrastructure can be prohibitively expensive and operationally demanding.
Licensing provides an alternative route. By licensing technology to established industry participants like sports equipment manufacturers, leagues, clubs, broadcasters or technology providers, sportstech innovators can leverage those partners’ existing commercial channels and market access.
In this model, the licensee often assumes sole responsibility for regulatory approval (if required) manufacturing, marketing and distribution, while the licensor retains ownership of the technology and benefits financially from its use. This significantly reduces the operational burden on the innovator and accelerates the route to market.
Licensing can also enhance credibility. The sports sector is relationship-driven which means adoption often depends on trust and reputation. Partnering with established organisations through licensing arrangements can facilitate faster uptake and wider acceptance of new technologies.
Supporting international expansion and technology uptake
Sporting activity by its nature is inherently global, but international expansion of a business can present legal, commercial and operational challenges. Different jurisdictions often impose varying regulatory requirements, particularly in areas such as data protection, athlete welfare and gambling regulation. Cultural and commercial differences can also influence adoption.
In addition, it is not uncommon for different sports to have further regulations imposed by their respective governing bodies which can impact on the adoption of technology at the elite level of the game, or laws which prevent the use of certain types of technology in the sport in question. By way of example, the definition of a cricket bat and how it should be constructed was remarkably specific for years. Without direct expertise and support from licensees who are familiar with the specific sport and regulations (whether territorially or across specific sporting activities), innovators may find they are unable to easily access the relevant market.
Licensing helps enable sportstech businesses to scale internationally while managing these risks. Territory-specific or even sport-specific licences allow innovators to partner with organisations that understand the relevant markets and regulatory environments. This reduces barriers to entry and, again, accelerates technology adoption.
Rather than expanding sequentially and building local operations in each jurisdiction, innovators can grant licences across multiple territories or sectors simultaneously. This can allow technology to achieve global reach far more quickly than would otherwise be possible.
Crucially, licensing arrangements can be structured to preserve strategic flexibility. Businesses can grant rights for specific territories, sectors, or applications while retaining opportunities for future growth in others.
Why is licensing for sportstech often the best business model?
For many sportstech innovators, licensing is not simply one commercial option among many. It can be the most effective and scalable business model, particularly in the early stages of growth.
Capital efficiency is key to the success of any business during its early stages. Licensing can reduce the need for significant upfront investment in manufacturing, logistics and sales infrastructure. This can enable businesses to scale without placing additional pressure on operational financial resources.
Risk management is equally important. Direct commercialisation exposes businesses to operational and regulatory risks, particularly in complex international markets. Licensing allows these risks to be shared with or transferred to partners better positioned to manage them, in exchange for a beneficial commercial arrangement for the licensee.
Licensing also enables businesses to prioritise innovation by reducing the amount it is required to focus on large scale operational matters. Maintaining technological leadership is critical in the rapidly evolving sportstech sector, particularly in the software, analytics and AI space, which are constantly evolving with new challengers reaching the market regularly. By relying on partners for commercial deployment, innovators can concentrate on research, development and enhancement of their core technology.
From an investor perspective, licensing for sportstech can be highly attractive. IP-driven businesses with recurring licensing revenue shows diversification away from product or services sales alone. Licensing agreements with leading sports organisations or global brands can significantly enhance credibility and enterprise value.
The importance of a proactive licensing strategy
However, realising the full benefits of licensing requires careful planning and robust IP protection.
Sportstech innovators must ensure thatthey identify exactly what innovations they have generated and secure the relevant IP rights at the earliest possible stage. Clear ownership and protection of IP are essential foundations for a successful licensing strategy.
Equally important is the structure of the licensing agreement itself. Well-drafted agreements define the scope of rights granted (including exclusivity and its limits), financial terms, operational obligations on the parties and territorial limitations. They also ensure the innovator retains appropriate control over their technology.
Licensing should, naturally, be aligned with long-term business objectives. When implemented effectively, licensing for sportstech can create a platform for sustained growth, global reach, and long-term value creation.
Licensing: a strategic foundation for growth
The sportstech sector continues to present a significant commercial opportunity. However, realising this opportunity requires more than technological excellence. Businesses must adopt commercial models that enable efficient monetisation, scalable deployment and international expansion.
Licensing for sportstech provides a well-established pathway to achieving these goals. By enabling innovators to monetise their IP through third parties, access global markets, and scale efficiently while managing risk, licensing can assist in transforming promising technology into commercially successful, internationally adopted solutions.
For sportstech innovators seeking to build sustainable, high-growth businesses, licensing is not simply a legal term. It is a strategic tool that can not only underpin but also deliver long-term commercial success.
Dave Holt is a partner in Potter Clarkson’s dedicated sportstech team. Dave is also a recognised expert in creating highly effective licensing strategies for technology-driven businesses. If you’d like to discuss how you can use a licensing model to best commercial effect, please get in touch.
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