- Whoop deal aims to make players ‘healthier and wealthier’
- Challenge to commercialise personal data with fantasy sports sector among the targets
- Legal issues surrounding the use and availability of the data
Several wearable technology brands have attempted to break into sports in recent years, but Whoop’s foray into the world of professional American football represents a landmark for the sector.
In April the company, which is based in Boston, Massachusetts, announced a deal with the National Football League Players’ Association (NFLPA). Whoop was unveiled as the ‘officially-licensed recovery wearable of the NFLPA, although the commercial value and length of the agreement were not disclosed.
The deal was significant in more ways than one. The agreement was the first one sealed by the OneTeam Collective, which was established by the NFLPA in December to explore product ideas and business ventures in a number of areas. The deal also represented the first time that a players’ association in professional sports had linked up with a wearable technology provider.
Broadly speaking, wearable technology partnerships are not uncommon in sport. The US major leagues have flirting with the sector for some time. For example, last year Major League Baseball approved two devices for use.
However, the explicit intentions of the partnership set the Whoop-NFLPA tie-up aside from other such deals that have been agreed to date.
PICTURE: The Whoop Strap 2.0 (Business Wire)
The partnership extends beyond health and fitness for the player and brand association for the company.
Neither the financial specifics of the deal nor the length have been disclosed, but under the agreement, NFL players will design custom licensed bands for the Whoop Strap 2.0, which will collect individual data for “personal use and commercial sale.” The Whoop Strap 2.0 retails for $500 and currently works with the Apple iPhone, with Android compatibility coming soon.
Each band, which is worn on the wrist or forearm, automatically measures and analyses an athlete’s strain, recovery and sleep. When linked up with the Whoop mobile or online application, the band provides data, analysis and recommendations that help athletes to tailor their training and improve their sleep – all with the aim of maximising their performance.
Crucially, though, the players will own and control their individual data, with the opportunity to become “healthier and wealthier,” according to Whoop founder and chief executive Will Ahmed.
“As an innovative, forward-thinking organisation, the NFLPA understands the impact technology could have on the game of football. With that, they found the value in Whoop to further enhance player safety and health,” Ahmed tells SportBusiness International.
“Beyond simply collecting and controlling data, there is a real opportunity here to commercialise player data, with many potential buyers including the media and broadcasters.
“Commercialising the data will better inform broadcasters, engage fans and improve public knowledge on health data. This partnership also gives players the opportunity to generate revenue based on their individual data. The more personal the data becomes, the more lucrative commercialising it becomes.”
So, who would splash out on such personal data? As Ahmed suggests, broadcasters of sports – and particularly US major league sports – have a hunger for data that never seems to be truly satisfied. In February of this year, another wearable technology firm, Catapult, provided similar analytics during live coverage of Australia’s National Basketball League as part of a three-year deal.
However, Lee Igel, an associate professor in the Tisch Institute at New York University, is more cautious about the potential for such data to be of significant interest to media companies.
“The big question is how well and how often anyone figures out how to monetise the data,” Igel tells SportBusiness International. “But no doubt that there will be a healthy market for all sorts of products, services, and programmes based on the personal data of athletes in the NFL and all other professional sports leagues. And it won't be long before that starts to trickle down to younger levels of sport.
“This sort of data would seem to be so granular that it wouldn't be of interest to most fans and broadcasters – and certainly for those who tend toward tradition and simply focusing on the game at hand.
“But factoring in the interest in fantasy sports, betting, and big data and analytics begins to create a different picture. Go figure; there are enough people out there who want to know things such as an athlete's sweat production rate.”
PICTURE: The NFL will not allow the devices to be used during games yet (Getty Images)
Fantasy sports would appear to be the big opportunity from a commercial perspective. However, the fantasy sports sector itself is in a state of flux, from a regulatory perspective at least.
In November the daily fantasy sports sector’s two main US operators, DraftKings and FanDuel, announced a merger that is expected to close later this year. Many believe the merger was driven by necessity in an industry that is facing a regulatory squeeze.
After years of exponential growth, eight states passed laws in relation to the sector in 2016 as the debate continued to rumble about whether the activity straddles or oversteps the line with sports betting, which is illegal in all forms in the vast majority of US states.
Moreover, as wearable technology is inevitably welcomed more widely into the world of professional sport over the coming years, lawyers and attorneys will be primed to offer their input in what are sure to be complicated negotiations.
For example, in the NBA basketball league’s new collective bargaining agreement with the players’ union, from July 2017 to the end of the 2023-24 season, there is a dedicated section for wearables.
A joint advisory committee, comprising three NBA representatives and three union representatives, will review wearable devices for players, with a number of devices already on the ‘approved’ list. The committee can also refer to experts in engineering, data science, and cyber security to evaluate the devices.
The collective bargaining agreement also addresses a concern about the use of such personal data – that it could be used against the interests of the players in contract talks.
“The data may not be considered, used, discussed or referenced for any other purpose such as in negotiations regarding a future player contract or other player contract transaction (e.g., a trade or waiver) involving the player,” the CBA states.
If a team violates the clause, a grievance arbitrator will have the authority to impose a fine of up to $250,000. However, some legal observers have claimed that the clause has left a loophole in protecting players by failing to mention rookies.
PICTURE: Dustin Pedroia of the Boston Red Sox (Getty Images)
Regardless of the legal arguments on the point, such suggestions outline the nature of the legal challenges that lie ahead when incorporating wearable technology into professional sport.
“The clauses about this sort of data usage are likely to end up as a common addition to player and collective bargaining contracts,” Igel says.
“Hashing out deals around individual data gets at protecting players' financial wellbeing in the short-run. Leagues and player unions would do well to begin understanding from healthcare professionals about what is working and what isn't with things such as managing electronic medical records.”
Professor Michael LeRoy of the School of Labor & Employment Relations & College of Law at the University of Illinois, sees other implications from a legal standpoint.
“Under federal labour law, unions may waive rights of individuals to file discrimination lawsuits,” he tells SportBusiness International. “Unions don't ask for this right – employers use their bargaining power to acquire these waivers, such as offering bonus compensation for these waivers.
“Leagues have leverage over players in every league except baseball, where a crippling strike by players in 1994 still puts fear in the hearts of owners. This pressure dynamic could emerge in future sports negotiations.
“The challenge for leagues and unions is to strike a sensible balance that allows bio data to protect players without putting these data over and ahead of performance metrics.”
Some observers are also concerned about privacy and whether even more personal data could be derived from such partnerships in the future – against the wishes of the players. However, Ahmed insists that such fears are misplaced.
“Whoop has 27 levels of privacy settings, which allows users to choose the settings that they see are best suited for them,” Ahmed says. “Wearing the strap is completely optional – players choose if they want to wear the strap and whether they want to share and licence their data.”
However, Igel does see a danger of deals such as this opening up a Pandora’s Box of data that could provide an insight into aspects of a person’s life that they might not want to disclose.
“We have enough real-life examples of people getting a hold of private information that belongs to an individual or organisation and using it for influence or coercion,” he says. “One issue is who has access to the data, because access gets into who can control its distribution. Let your mind run from there about what might be done – good and evil – with athletes' private data.”
Igel adds that data alone cannot provide a “full picture” and added: “Numbers need context. That is the trouble with the rush to analytics of late – too much numbers, not enough context.”
As an example, a lack of adequate sleep the night before a big game could – on paper at least – be held against a player who is perhaps suspected of partying. However, could he or she have been ill, or even simply suffering from a bout of pre-match nerves?
PICTURE: NFL training (Getty Images)
Whoop’s deal with the NFLPA, though, looks certain to open the floodgates for similar agreements between wearable technology companies and sports leagues, clubs and players.
“I think other professional sports leagues are starting to understand the impact data can have on players’ health and performance,” Ahmed says. “We see that with Major League Baseball’s recent approval of Whoop for in-game use, and also with NBA players who have been choosing to use the Whoop strap both on and off the court. This technology empowers players to better understand their bodies to not only optimise their performance, but to live a healthier lifestyle.”
In early 2016 analysts at CCS Insight projected that the wearable technology sector will continue to expand impressively, with 411 million smart wearable devices worth a total of $34bn set to be sold in 2020. Expectations have been tempered slightly over the past 12 months, with CCS analyst Ben Wood admitting in March of this year that many wearables had “stalled in the marketplace.”
Analysts have broadly cited a number of reasons for the slowdown, including clutter in a highly competitive market and doubts over engagement – whether the consumer will be able to learn anything new from the devices after using them for a while.
Ahmed acknowledges that the challenge to keep enhancing Whoop’s offering and keeping consumers engaged is a priority for the company.
“Whoop will continue to respond to the demand from all levels of competitive athletics, both locally and abroad, and potentially beyond athletics into other areas in which the need for performance optimisation is crucial for success,” he adds. “We are always working to improve our platform and offer features to enhance our clients' experience.”
PICTURE: The New England Patriots' Tom Brady (Getty Images)
EXTRA: NFLPA’s OneTeam Collective
The Whoop agreement was the first one sealed by the OneTeam Collective, which was established by the NFLPA in December 2016 with the support of six founding partners – the Harvard Innovation Lab, Intel, Kleiner Perkins Caufield & Byers, LeadDog Marketing Group, Madrona Venture Group and the Sports Innovation Lab.
The OneTeam Collective is a so-called ‘business accelerator’ initiative that offers rights to sports-related intellectual property, with partner companies benefiting from access to more than 2,000 NFL players. When it was established, the NFLPA said that the initiative was set up to explore product ideas and business ventures related to fan engagement, data analytics, performance and training, mobile fitness, sports nutrition, consumer products, gaming, new media, virtual and augmented reality and fantasy sports, as well as wearable technology.
EXTRA: Whoop benefits
Whoop claims that after four months, athletes who use the company’s technology:
– Dedicate an additional 41 minutes’ sleep per night
– Consume alcohol before bed 79 per cent less often
– Increase heart rate variability by eight milliseconds
– Reduce resting heart rate by 4.4 beats per minute
– Report injuries 60 per cent less often