Investing in Football Tech

Yes, it’s that time of year again.

The days are getting shorter, the kids are back in school, the summer clothes are going back into storage, and football season has begun.

While baseball is America’s national pastime, let’s face it… nothing inspires sheer frenzy like the old gridiron.

Sleepy towns in the heartland shut down for high school games, college kids paint their bodies head to toe in their school colors to support their teams, and National Football League fans shell out as much as $200 per ticket to watch a regular season game.

Football creates some serious devotion.

I’ve never understood it myself. I’ve never been a team sports kind of guy, and the action in football is so sporadic that I’ve never found it compelling enough to carry interest from one game to the next.

The game is interesting to me for different reasons.

One of those reasons is that football willingly adopts new technology.

Earlier this month, we wrote about the way the Internet of Things has made its way into the NFL, with Zebra Technologies (NASDAQ: ZBRA) providing RFID tracking to the league.

We’ve also written about the interest in impact sensors to prevent concussions, new wearables for training, and even the use of drones instead of blimps for television broadcasts.

Football and technology are deeply entwined.

That technology goes from the sky over the stadium all the way to the ground under the players’ feet.

It might not be the first thing you think of when you think “tech,” but the Astroturf used in major stadiums is getting an overhaul.

The University of Utah’s Rice-Eccles Stadium is in the process of ripping out its $700,000 Astroturf field and replacing it with a new temperature-regulated artificial turf from FieldTurf called “CoolPlay.”

It’s not some crazy air-conditioned field, and it’s not some one-off deal for the lake effect Salt Lake City weather. The same system has already been installed at Ohio State, University of Maryland, Notre Dame, in the Seattle Seahawks’ CenturyLink Field, and in the New England Patriots’ Gillette Stadium.

The Astroturf is similar to existent multi-layer turf provided by FieldTurf, but it uses a layer of cork infill on top of the usual crumb rubber layer. The light color of the cork absorbs less sunlight and keeps the temperature of the field lower during the day.

The company promises a surface 35 degrees cooler than traditional turf that costs significantly less than water-cooled fields.

It’s really a simple tweak, and if it makes you re-evaluate your definition of “technology,” good. That’s why I brought it up today.

Astroturf was invented in 1964 by a subsidiary of the Monsanto Corporation known as Chemstrand. The product, then known as “Chemgrass,” was brought to Houston’s indoor baseball field, the Astrodome, when the dome was painted to reduce glare and the natural grass inside died.

The innovative and, most importantly, sturdy product saw rapid adoption by major league sports teams. Within three years, it spawned competitors from 3M (“Tartan-turf”) and a company known as American Filtrate (“Poly-turf”). 

The plastic fiber grass was heralded as a brilliant technology ideal for the new age of the “instant replay.”

The surface, though problematic, especially in its generation of heat, turned up the intensity in football.

In 1972, New Scientist magazine said, “Because the surface is so true, players can ram into each other even faster and more furiously than on orthodox grass.”

The different feel of Astroturf caused teams to experiment with new footwear. Teams that had traditionally worn metal-spiked football shoes switched over to rubber-cleated shoes similar to the shoes worn by soccer players.

Now, some 50 years later, we don’t even think of Astroturf as a piece of technology, yet it made the game more intense and innovative.

But I’m not a sports writer. I’m here to talk about investing.

The good news is that FieldTurf provides a couple of investment inroads. The company responsible for the new Astroturf is French flooring company Tarkett, which is listed on the Paris Stock Exchange under the symbol TKTT. The company is one of the world’s largest makers of flooring products, behind Mohawk Industries Inc. and Shaw Industries Group.

On the domestic side, private equity firm Kohlberg Kravis Roberts & Co. LP (NYSE: KKR) owns approximately 18% of Tarkett, giving it a small share of what could be thought of as FieldTurf. From 2007 to 2013, KKR owned approximately half of Tarkett but divested itself of $623 million worth of shares, which it turned back over to the family that managed the company since the early 1940s.

KKR specializes in leveraged buyouts in a number of industries, but its portfolio lately skews toward chemicals, energy, and tech.

Its most recent investments include digital ticketing platforms Trainline and Ticket Monster, Pioneer DJ Corporation, CRM software company ClickTale, greenhouse company Sundrop Farms, and Swiss online classifieds company Scout24.

KKR has been in the news recently after IMC Financial Markets inexplicably opened the stock at $10, nearly half the previous evening’s closing value on August 24. In a brief five seconds that morning, over 475,000 shares of KKR blew across the market for a fraction of its value — as low as $8.

By the evening, the stock closed at just $0.08 below the previous day. Something was fishy, and KKR is now looking to drop IMC as the SEC investigates.

Since that event in late August, the price of KKR has taken a sharp decline. It’s the first large drop in price since the firm went public five years ago.

Good Investing,

Tim Conneally

 @TimConneally on Twitter

For the last seven years, Tim Conneally has covered the world of mobile and wireless technology, enterprise software, network hardware, and next generation consumer technology. Tim has previously written for long-running software news outlet Betanews and for financial media powerhouse Forbes.