🎧🍌 How Overtime Grew to 85 Million Fans with Dan Porter (Co-founder and CEO, Overtime)

The business behind sports, how to raise money for a crazy idea, betting on technological change, how Overtime launched three sports leagues, and why founders must obsess over their product

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Dan Porter is the Co-founder and CEO of Overtime, a sports network for the next generation of fans. OT reaches 85 million fans per month and runs a basketball league (Overtime Elite, OTE), a flag football league (OT7), and is launching a boxing league (OTX) the week this episode airs.

Dan started Overtime with his co-founder Zack Weiner in 2016, and has since raised over $215 million. OT is supported by investors like the late ex-NBA Commissioner David Stern, Jeff Bezos, Drake, Carmelo Anthony, Trae Young, over 25 other NBA players, Spark Capital, Redpoint, a16z, Greycroft, Afore Capital, and Banana Capital. [Myself (Turner Novak) and Banana Capital are investors in Overtime].

Find Dan on Twitter and LinkedIn.

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In this episode, we discuss:

• The business of sports

• Why people love sports

• The founding story of Overtime

• How to raise money for a crazy idea

• Overtime’s very first product

• How to bet on technological change

• The changing professional sports landscape

• How to launch a sports league

• Why founders must obsess over their product

👉 Find on Apple and Spotify

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Thanks to Zac and Xavier at Supermix for the help with production and distribution!

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Transcript

Find transcripts of all prior episodes here.

Turner Novak: Dan, thanks for having me in the office today.

Dan Porter: Thanks for coming.

Turner Novak: This is the Overtime studio.

You're sort of in the intersection of sports, media, culture. We can take this in whatever direction you want to go and then we'll get into Overtime.  But can you talk through the market you guys are working in and everything that's going on right now?

Dan Porter: When investors look at sports as an investment or an asset class, there's two ways to look at it. Number one is that owning a sports team or a sports league is a scarcity business.

There's a finite amount and the price of a sports team goes up based on the fact that there are just not that many to buy. Steve Ballmer^[1] will pay $2 billion and now $2 billion is the floor, and then someone else will pay $4 billion.

And they have their own rationale, but it's not the same rationale an expert stock picker might use to decide at what price they're going to buy a stock.

[1] Steve Ballmer served as the CEO of Microsoft from 2000 to 2014. He previously tried to purchase the Oklahoma City Thunder and the Sacramento Kings but both deals fell through. In 2014, he purchased the Los Angeles Clippers and he is considered to be one of the best basketball team owners for his contributions to the franchise.

Turner Novak: But they do kind of produce cashflow.

Dan Porter: They do. And sometimes the buyers are not agnostic to price, but the delta in price is somewhat immaterial to them.

And then they have other value, the real estate around it, the brand, all of these other things like that. But there's no doubt that we've gone from a state where you have stocks and bonds to, you have sports teams, you have real estate, you have watches, you have all kinds of asset classes, and there's a part of sports that that is an asset class.

And then there's a part where, obviously we're in a period of massive amount of distribution. You've got streaming, you've got network, you've got cable, you've got social platforms. And there's a belief that premium content is what they need, and that's where many people have made bets across film, television, all kinds of things like that.

And there's an aspect of sports which is live. And so it has a different kind of content resonance. And if you can produce a live event that people care about from an advertising and from a subscription and from a viewership model, that's incredibly valuable.

And you could almost use the metaphor of music, like music has gone from, “I make all my money by selling CDs” to, “I sell some CDs, but I make all my money by the concert.” Like to see Taylor Swift live, that's a billion dollar business. Maybe more so than the recorded music.

So you have sports as an asset class, you have sports as essentially content and culture driver. And I think for us you have sports as a vehicle to own a market or a demographic. And for us, that was young people who are engaged in sports and culture who are hard to reach.

We used to be able to reach them – and everyone – by just advertising on television. But, if they're not watching live sports on television, how do you reach them? And if they are watching sports, you can assume other things about them. They might be interested in this drink, or these sneakers, or this car, or anything else like that.

And so you have an audience aggregation play and asset class play and a content and culture play from a pure investment thesis. If you talk to people who start private equity and other funds and you say, “Why do you buy teams and leagues?” That's what they would tell you.

Turner Novak: We're at this weird point where fewer members of the younger generation are watching sports on TV. But then, when you go look at the top categories that people actually do watch on TV, it's pretty much all sports.

(American Football made up 87 of the top 100 most-watched US TV broadcasts of 2022. Source.)

Dan Porter: Yeah. The denominator shrunk, right? Less people are watching live television. But sports and essentially breaking news are the only drivers. And by the way, those are the two things that streaming services don't really do. And so the amount of premium television, or series, or other things that you're going to watch on television, has gone down.

But your live news or your live sports, the NFL, the NBA, or anything else like that, has gone up. And that's because there's an assumption that if I have a show and you don't have my streaming service, you might not watch it. You'll find something else to watch. Now, if that show is Game of Thrones, you're going to find a way to watch it.

Now if that is the favorite sports team that I have loved ever since I grew up, I'm going to find a way to watch that. And so it's this difference between essentially a commodity product: “Well, I was going to watch this reality show, but I don't have that service. But I'll watch another one that's kind of the same.” Versus something that is non-commodified: “Oh my God, I've been a Yankees fan all my life. I will do anything I can” – I personally am not a Yankees fan, but – “to watch the Yankees.’ And that's the value and the power of sports.

And so our challenge is, I have to make people care about our sports and our teams, but they've only been around for 12 to 24 months. I live in New York City. I say, “Why are you a Knicks fan?” “Well, my dad was a Knicks fan.” Well, I don't have 50 years of fandom to do that, so I have to use social media and everything else to accelerate that. 

And people say, “How do you know when you're successful?” I say, “Well, when the City Reapers” ­– who's one of our teams – “plays the Cold Hearts in the final, and the Cold Hearts lose, somebody somewhere in the middle of the country cries because their favorite team lost.” And then, you know.

Turner Novak: Have you seen those meme videos where someone had a viral tweet that goes, “I don't understand why men like sports.” Have you seen that?

Dan Porter: Yeah.

Turner Novak: It’s the tweet, and then there's the video. There's usually a 3-minute, 5-minute video, and it's just followed by 10 scenes of the biggest plays that have happened in sports, whether it's football, baseball, hockey, and it's storytelling for a lot of people.

Dan Porter: I think there's a couple reasons why men and women like sports too. Number one is, at this point today, sports is about culture. 

When people say sports – I could be doing music, I could be doing whatever. We come to work and I say, “Oh, have you seen The Bear season two?” Or whatever. Or I say, “Oh, did you see that tennis match where he almost upset so-and-so?” So it's just part of culture and that conversation.

I think the second thing is sports, like music, is very tied to identity. I've lived in New York for 30 to 35 years, but I grew up in Philadelphia. I'm a big Philadelphia Eagles fan. That is part of my identity. That is my bond with my high school friends.

And I think the third thing is, if you're reading a book, you can go to the end of the book and you can see what happened. Or, you're watching a movie, you can fast forward. Sports is one of the few things where you just don't know how it's going to end up.

And as a psychological exercise when you're engaged in it, you're just like, “Anything could happen at any moment.” And there's something about psychology and human nature that when you tie in, “Oh, and I really care because I like this player, I'm from this city.” And, by the way, this is culture because everyone's watching the Super Bowl. People who don't care about the Super Bowl watch the Super Bowl because you have to come in and talk about it.

When you put all those three things together, to me it makes a lot of sense.

Turner Novak: We haven't really talked much about what Overtime is – what is it today?