Analytics can be useful in evaluating athletes’ on-field performance, but just as marketers struggle to find appropriate metrics for ROI and brand evaluations, executives on every side of sports are challenged to formulate definitive metrics. While MIT hosted a conference last week focused on the analytics that are a hallmark of its Sloan School of Management, sports industry veterans repeatedly reminded devotees of “Moneyball” and statistical acolytes like Bill James (a conference speaker) that most sports decisions have gut instinct at their core.
Since the appeal — and profitability — of sports is based on the ability to capture emotion, that seemed appropriate, even at one of the country’s foremost institutions of engineering and technology.
“We’re in the ‘happy’ business,” said New Jersey Sports And Exposition Authority President Dennis Robinson. “That’s what we sell.”
Celtics owner Wyc Grousbeck (left), with Red
Sox owner John Henry, sees data as part of the
answer, “a nice tool in sports.”
But that’s not quantifiable, even by someone with multiple MIT degrees. Consequently, “you’ve got to mix analytics with your own insight,” said Boston Celtics managing partner and CEO Wyc Grousbeck, the keynote speaker. “Data can be a nice tool in sports, but it is no substitute for your own analysis.”
Nowhere is that more apparent than on the sales side of the business.
“There aren’t enough impressions for the Thrashers in Atlanta for me to build a strong case of value through raw numbers, so we sell sponsors on building with the team,” said Lou DePaoli, executive vice president and CMO of the Atlanta Hawks, Thrashers and the Philips Arena.
Even with a renowned franchise, it is more magic than microchips.
“People ask me what a sign on the Green Monster is worth, but I don’t need to know that,” insisted Sam Kennedy, Boston Red Sox senior vice president of sales and marketing. “I have to know what someone will pay for that sign. You need to have data, because it is part of the sale now, but there’s no way I can justify our rates purely with math or impressions. I have to show them how they can create a halo for their brand.”
Selling the Red Sox halo effect is about more
than math, says club senior VP Sam Kennedy.
Even when it comes to player-personnel decisions, instinct is still often the final arbiter. It’s often forgotten that in the 1998 NFL draft, college quarterbacks Ryan Leaf and Peyton Manning were considered a toss-up for the top two selections. Statistically, they both had the goods, but ask the San Diego Chargers how Leaf worked out as their franchise QB. “If I had picked Leaf, I probably would have been serving you lunch today,” said Indianapolis Colts President Bill Polian, with a laugh. “Your bell cow has to be a character player.”
Of course, that’s not something that shows up on a spreadsheet. “Not everything can be quantified,” said former Detroit Pistons coach Rick Carlisle, now an ESPN analyst and president of the NBA Coaches Association. “They haven’t found a machine that can measure the size of a player’s heart.”
Not that numbers don’t have their place. For example, the Hawks, perennial NBA doormats, have improved on the court, but even more so in their overall marketing approach. Four years ago, the team was the biggest spender among NBA franchises on mass media advertising and near the bottom in attendance and wins. Now the majority of marketing dollars are spent on direct and digital campaigns. “Our [attendance] numbers are up and I know stuff about my customers I never knew before,” DePaoli said. “Certainly, there’s a connection there.”
RECESSION RAP: As is the case at every industry gathering these days, the “R” word — recession — was discussed, including the impact, duration and who it would mostly affect. While there was no consensus whether this country was in an “official” recession, there are those in sports seeing its effect, especially on a local level.
“The recession is brutal,” said Kennedy, during a brand and revenue management panel. “We’re world champions and we’re going to struggle to hit our [sales] numbers because of the pull back in [marketing and advertising] spending.”
Bernie Mullin, former NBA senior vice president of team marketing and business operations, now a consultant after four years as president and CEO of the Atlanta Spirit, said the most immediate impact he has seen is a sharp reduction in single-game ticket sales for many clubs. “Seasons and partials are still holding strong, but I don’t see single-game [ticket] sales coming back soon,” he said.
Jon Hickey, Mullen Advertising senior vice president of sports and entertainment marketing, said clients are cutting spending and seeking shorter commitments with sports properties.
“There’s a cautiousness when it comes to new deals, there are more shorter deals or less rights over the same term in renewals and more interest in ‘out’ clauses,” said Hickey, whose sports clients include LendingTree, Mass Mutual and Wachovia. “Every client is trying to find some way to minimize risk right now.”
SAME TIME, SAME CHANNEL: The NFL Network and cable operators continued their distribution debate at the conference. NFL Network COO Kim Williams said the league’s insistence on being carried on digital basic, instead of less-popular sports tiers, gets down to a question of value. “NFL content has a pretty rich track record of growing other businesses, whether that is with Fox or DirecTV,” she said.
But since the eight regular-season NFL Network games are available over-the-air in the local markets of the competing teams, cable operators — which operate locally — don’t see as much value in the games. “We’re interested in exclusive programming and that local [broadcast] availability is going to continue to hurt the NFL [Network’s] distribution efforts,” said Bill Bridgen, Comcast SportsNet New England executive vice president and general manager.
Comcast now carries the NFL Network on its sports and entertainment tier.
MORE GREEN: While the Boston Celtics have slowed somewhat from the season start that tied an NBA record at 29-3, Grousbeck still flashed a wide grin when asked how much of a lift the Celtics’ on-court renaissance has given the team off the hardwood. “We’re up across the board,” he said. “Tickets, sponsorship, merchandise, and whatever else we have to sell.” Grousbeck said the team has sold a presenting sponsorship for an expected playoff run, but would not reveal who bought it, saying the deal was not finalized.
Terry Lefton can be reached at tlefton@sportsbusinessjournal.com.
