NFL Draft Turns Players’ Dreams Into Clear Financial Realities     

 
   
     
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
     
   
      By Adam Grossman and Ross Chumsky  For virtually every player not named Myles Garrett, tomorrow’s NFL Draft will be filled with uncertainty.  It is not clear what number draft pick he will be or which team will select him.  There is one thing, however, that these future NFL players do have virtual certainty about – they will know exactly how much they will be getting paid once they are drafted.  The document that governs relations between the NFL, teams, and players, as well as sets the basic ground rules for NFL business and conduct, the NFL Collective Bargaining Agreement (CBA). The 2011 CBA radically altered the way rookie contracts are both structured and negotiated.    The new rookie salary cap effectively created a set wage structure for all rookies entering the league, each draft position with a specific slotted salary based on a league-wide rookie compensation pool that is largely non-negotiable. Another significant change was rookie contract length, which with the institution of the 2011 CBA was capped at four years, with a fifth-year team option for first round picks, versus contacts that could span as long as six seasons under previous iterations of the CBA.     Since each draft position has a predetermined salary value, salary cap considerations in draft trades are diminished since there is no risk of inflated and unreasonable contract demands from top picks.  With fewer monetary limitations, teams are able to more freely move around within the draft order to position themselves to be able to select the player they want without fear that they will be taking on a likely high salary or using significant cap space with a player who has yet to play a single down at the NFL-level.  A prime example of the impact of the rookie salary cap on rookie compensation can be observed by comparing two contracts: Sam Bradford’s 2010 contract and Cam Newton’s 2011 contract.  Drafted just one year apart, Bradford and Newton were both number one overall picks, however both their first-year and overall compensation differed greatly.  According to Jason Fitzgerald and Vijay Natarajan, authors of  Crunching the Numbers: An Inside Look At The Salary Cap And Negotiating Player Contracts , Sam Bradford originally signed a 6-year, $78 million contract, with $51 million in guarantees and the potential for the deal to escalate to $86 million with the inclusion of Likely to Be Earned Incentives (LTBE) in the deal, while just one year later Cam Newton signed a 4-year, $22,025,498 fully guaranteed deal (i.e. guaranteed for skill, injury, and cap), with the opportunity to earn a fifth-year team option with a salary substantially larger than in the first four seasons of the contract. The difference between the overall compensation and general contract structure between Bradford and Newton’s deals clearly illustrates the change in rookie compensation that the 2011 CBA implemented.  Paying millions to first-year players meant that teams had to set aside huge amounts of salary cap space to accommodate these deals.  This effectively limited the amount of money and salary cap space available for teams to sign veteran free agents. Creating more predictability for teams of the salaries of their newly drafted players resulted in cap space becoming available for free agent veteran players.  With simplified rookie contract negotiations, teams are better able to avoid lengthy holdouts that stretch into the summer and possibly even training camp.  Rookies signing their deals soon after the draft means rookies arrive at team facilities earlier in the offseason and they can begin learning their teams’ playbooks sooner. More offseason practice time for rookies is one major reason why more and more rookies are making immediate impacts for their new NFL franchises at a lower cost than before the new CBA was put into place.  These factors make early round picks an extremely valuable asset that are difficult to acquire. The more early picks a team has, the more likely a team will be able to draft a young player that can have an immediate impact on its roster.  Through a series of trades and personnel decisions over multiple seasons, the Cleveland Browns have amassed an additional pick in the second round in 2016, extra first and second round picks in 2017, and two additional second round picks in 2018.  That means for the three-year period between 2016 and 2018, the Browns have amassed fifteen picks that fall within the top 100 selections. This has put the Browns in a position to maximize their probability of adding impactful talent to its roster over the next few seasons.  The Chicago Bears have been and will continue to build through the draft as well.  Young players such as Kyle Long, Leonard Floyd, and Jordan Howard have become integral parts of the team’s future plans for success. In addition, the injuries to 2015 first round pick Kevin White have been less detrimental to the team than in past years because of his relatively low salary cap number.  By no means is the current version of the NFL’s CBA perfect.  For example, players may feel they are being undercompensated as compared to the previous CBA, in which teams still were required to make significant investments in players that had yet to play a snap of professional football. However, for the players drafted on Thursday and throughout the entire weekend, they will have little doubt about how much they can expect to be paid when their names are called to be drafted.   Adam Grossman is the CEO and Founder of the sports sponsorship technology and analytics firm Block Six Analytics (B6A). In addition, he is a lecturer for Northwestern University’s Masters of Sports Administration where he teaches classes focused on develop and communicate strategic insights through data.     Ross Chumsky is a Senior Partnership Analyst at B6A.
BY ADAM GROSSMAN AND ROSS CHUMSKY

NFL Draft Brings Turns Players’ Dreams Into Clear Financial Realities

For virtually every player not named Myles Garrett, tomorrow’s NFL Draft will be filled with uncertainty.  It is not clear what number draft pick he will be or which team will select him.  There is one thing, however, that these future NFL players do have virtual certainty about – they will know exactly how much they will be getting paid once they are drafted.

 

       It is Personal Because It is Analytics      

 
   
     
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
     
   
      By Adam Grossman  The captain of a basketball team took a look at the game video and saw his squad getting dominated on the boards. He also saw his backup point guard turn over the ball too frequently for his team to win games consistently. The team decided to both add a new frontcourt player to help with the glass and to reduce the point guard’s minutes.  This situation occurs commonly in the NBA when teams review video to diagnose their weaknesses and make personnel moves based on what they see in the video. What makes this situation unique is that it did not happen in the NBA. This captain leads a squad called the X-Men, a team in the Equinox Basketball League in New York. Captain Keith Howard was able to evaluate his squad quickly because of the footage he received courtesy of a service called Krossover the day after a game occurred.    What is Krossover? According to a recent profile in   The New Yorker   ,  “Krossover compiles game film and breaks the video down to a seemingly infinite variety of plays and data points. The service only requires a tripod, a camera, and a videographer—often a coach—to film each game and upload the footage; by the next morning, the videos, which are dissected and tagged by analysts contracted by Krossover, are ready to be viewed.”  Is it a bit much to watch game film of your rec league basketball team on a daily basis? Maybe. However, anyone that has played pickup or rec league basketball knows that determining who should play and not play is really difficult. In particular, telling your friend or teammate he / she is hurting the team is not a pleasant conversation to have at the gym. Krossover virtually eliminates the issue because the video and stats can show how a player is performing and potentially hurting his / her team. It’s not personal, it’s analytics.  There is, however, a personal coda to this story that stretches beyond courts in Equinox gyms throughout the country. One thing sports teams and leagues are afraid of with analytics is that many fans will not embrace data. The conventional wisdom is that while some fans love analytics, most fans want to watch the players compete and not be inundated with numbers. That is why many sports leagues and broadcasters are hesitant to use analytics during games.  This example with Krossover shows that this may no longer be the case. In fact, this article shows that Equinox invested $50,000 in Krossover in several locations around the country to help ensure its athletes get their data.  Equinox gym members are not representative of all sports fans around the country (  The New Yorker   says, “The games have the feel of a Rucker League for the one per cent” ) . If rec league basketball players are starting to look at their own video breakdowns and stats then it is not a stretch to think that they would want similar data for their favorite NBA or college players. After year-over-year ratings for the NBA decreased in  2016-17 , using data and analytics to increase viewership is a conversation the industry should be having. 
BY ADAM GROSSMAN

It is Personal Because It is Analytics

The captain of a basketball team took a look at the game video and saw his squad getting dominated on the boards. He also saw his backup point guard turn over the ball too frequently for his team to win games consistently. The team decided to both add a new frontcourt player to help with the glass and to reduce the point guard’s minutes.

      Modernizing Tradition at The Masters     

 
   
     
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
     
   
      By Adam Grossman   “A tradition unlike any other” is now  literally  the trademark phrase of the Masters golf tournament teeing off this weekend in Augusta, Georgia. Fans from around the world enjoy seeing staples like Amen Corner, the azaleas that bloom around the greens, and the green jacket presentation at Butler Cabin during the unofficial start of spring at the Masters.  Despite being steeped in tradition, the Masters is actually one of the leaders in sports technology. Its relationship with IBM has created innovative ideas that have changed how fans consume content during the tournament. As my co-authors and I discussed in  The Sports Strategist: Developing Leaders for a High Performance Industry , IBM enabled the Masters to become one of the first events to have 360-degree views of each hole, a historical video timeline, and up-to-date leaderboard information directly on the tournament’s website starting in 2013.  This year’s tournament is no different. IBM’s Watson platform will be used at the Masters to solve one of the most difficult challenges for covering any golf event on television. In this year’s event, there will be 94 players competing to become the Masters champion. How will CBS (or any television network) know which holes to broadcast and where highlights may emerge during the thousands of potential hours of tournament television coverage? In the past, networks had to review this footage manually or rely on a cameraman to hopefully capture the right shot.  IBM Watson, however, can solve this problem using artificial intelligence (AI) and machine learning.  More specifically , “For the first time at a sporting event, IBM is harnessing Watson’s ability to see, hear, and learn to identify great shots based on crowd noise, player gestures, and other indicators. IBM Watson will create its own highlight reels.” The Masters and IBM have put into place a solution that could help all PGA Tournaments by leveraging its corporate partnership to use new technology to improve its “traditional” product.  The Masters and IBM’s relationship brings up a larger point about AI. In the past, we have talked about teaching machines how to see, hear, learn, and read through Block Six Analytics’ (B6A’s) Media Analysis Platform (MAP) and Social Sentiment Analysis Platform (SSAP). Both IBM and B6A are focusing on using AI to complete tasks that are both repetitive and for which machines can do a better job than humans. With MAP, for example, B6A is using machine learning to automatically identify logos or objects on screen during a broadcast to determine the value for a corporate partner. IBM is using Watson to identify, aggregate, and produce highlights in an automated fashion. Both companies are using machines to maximize the work people are doing in and around sporting events. That is likely the role that AI will play in the sports industry for the foreseeable future.
BY ADAM GROSSMAN

Modernizing Tradition at The Masters

“A tradition unlike any other” is now literally the trademark phrase of the Masters golf tournament teeing off this weekend in Augusta, Georgia. Fans from around the world enjoy seeing staples like Amen Corner, the azaleas that bloom around the greens, and the green jacket presentation at Butler Cabin during the unofficial start of spring at the Masters.

      Seeing How Payments Turn Into Dollars     

 
   
     
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
     
   
      By Adam Grossman  Could your glasses pay for themselves? In a manner of speaking, the World Surf League (WSL) and Visa would say yes. As part of the credit card company’s  new official partnership  with WSL’s Quiksilver and Roxy Pro Gold Coast (the first stop on the WSL Championship Tour), Visa is piloting payment-enabled sun glasses that “feature contactless payment capability and [eliminate] the need to carry cash or cards on the beach.”  This partnership is beneficial to both the WSL and Visa in several ways. First, it does potentially solve a problem that any beach goer (this author included) has faced when going to the beach. It can be difficult to carry around a wallet in a bathing suit without worrying about it getting it wet and / or possibly damaging one’s credit card(s). Eliminating much of the need for a wallet with something most people need on the beach anyway (sunglasses) elegantly solves this problem.  Second, this partnership does generate positive brand awareness and brand perception for both WSL and Visa. For the WSL, increasing brand awareness in an incredibly crowded sports marketplace is critical. This differentiated partnership demonstrates to companies and fans the unique ways the WSL activates its corporate partnerships. As an increasing number of younger consumers test out novel payment methods (think Venmo or Bitcoin), the use of more traditional credit cards could decline in the future. Visa partnering with the WSL and using novel technology should attract significant interest from the sport’s core demographic to the company.  What is arguably the most interesting part about this partnership, however, is how it effectively leverages new technology to drive new revenue for a corporate partner. It is clear that the growth of sports technology has been massive, particularly over the last five years. What is less clear is how to monetize technology, particularly when it comes to wearables. Technology-enabled glasses have been a focus for companies both inside and outside of the sports industry. Google Glass became an infamous flop for the search engine giant while Snap Inc. has made a bet that its potential new glasses will entice advertisers using its unique filters.  The WSL and Visa, however, have a sure thing when it comes to their glasses partnership and revenue generation. The WSL has provided a way for Visa to either attract new, younger customers or retain customers it already has. Visa makes money by charging a processing payment fee to merchants every time someone uses its products. Glasses make it as easy as possible for someone, particularly younger demographics, to make a payment. A customer just needs to have his / her glasses on when purchasing products. This also creates a switching cost for customers to move to a new payment provider. Why switch to a MasterCard, Venmo, Paypal, or Bitcoin if Visa makes my life easier, particularly when I am at the beach and / or on vacation?  In   The Sports Strategist: Developing Leaders for a High Performance Industry  , my co-authors discuss how the best possible corporate partnerships deliver value for both the buyer and seller. The WSL and Visa show how new technology can generate new dollars for both sides of a partnership.  See more content like this at  Blog Six  by  Block Six Analytics .
BY ADAM GROSSMAN

Seeing How Payments Turn Into Dollars

Could your glasses pay for themselves? In a manner of speaking, the World Surf League (WSL) and Visa would say yes. As part of the credit card company’s new official partnership with WSL’s Quiksilver and Roxy Pro Gold Coast (the first stop on the WSL Championship Tour), Visa is piloting payment-enabled sun glasses that “feature contactless payment capability  and [eliminate] the need to carry cash or cards on the beach.”

      Quantity and Quality for the NFL     

 
   
     
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
     
   
      By Adam Grossman  The fact that the National Football League (NFL) generated $1.25 billion in sponsorship revenue this year is both impressive and surprising. The NFL’s revenue was 4.3% higher during the 2016 season than it was during the 2015 season even though the year-over-year regular season television ratings  dropped  by 9%, while the playoff ratings fell by 6%. How is it possible that the NFL generated more money from sponsorships when it seemingly has less interest from fans (at least from television broadcasts)?  The first reason was the NFL was still able to generate many of the highest rated single telecasts for all television programming (not just sports). In 2016 alone, five of the year’s  top 10 telecasts  featured NFL games or content. So while NFL ratings may have been down by the league’s high standards, the NFL was still able to attract very large audiences.  As I wrote about in the book   Sports Business Analytics: Using Data to Increase Revenue and Improve Operational Efficiency  , there are typically six channels in which sports sponsorship are activated. These are: in-venue, traditional media (television, radio, newspaper), digital media, social media, event marketing, and intellectual property (naming rights deals, jersey rights deals, logos). The NFL in particular has made a big push into digital streaming and social media as demonstrated by its  partnership with Twitter  this past season to stream live games on the platform. Evaluating the level of fan interest / engagement with a league by only examining a single channel misses the larger picture and does not make sense in this context.  However, the larger point here is that discussion about sponsorship revenue and sponsorship value should not only rely merely on quantity of impressions generated. While the size of the audience is still important, corporate sponsors are increasingly looking at the quality of the sports fans demographics. In particular, corporate partners are looking for how a league can help them generate more money and achieve their overall brand / marketing goals. Not only does the average football fan make $66,300 in annual revenue, but also the NFL attracts the greatest percentage of female fans of any major professional American sports league according to SBRnet.  Relying solely on the number of impressions on television is not the best measure of a league’s overall fan engagement. Taking a cross-channel and qualitative approach to evaluating corporate partnerships shows why the NFL was able to increase its overall revenue in 2016 despite decreased television viewership.
BY ADAM GROSSMAN

Quantity and Quality for the NFL

The fact that the National Football League (NFL) generated $1.25 billion in sponsorship revenue this year is both impressive and surprising. The NFL’s revenue was 4.3% higher during the 2016 season than it was during the 2015 season even though the year-over-year regular season television ratings dropped by 9%, while the playoff ratings by 6%.

      From Commissioner To Investor     

 
   
     
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
     
   
      By Adam Grossman  David Stern has moved from commissioner to investor. The former NBA commissioner is no longer focused on growing the business of basketball, but rather looking at the growth that sports technology can have on the entire industry. His latest investment is in a company called  Overtime , “a smartphone app that allows for users to record, edit and share short-form sports video content,” which recently completed a $2.5 million seed round announced on Wednesday.  Stern is joining a growing number of sports owners, executives, and current and former players in making investments in everything from virtual reality and mobile apps to  eSports and software as a service (SaaS) platforms. This revolution comes at a time when the number of sports-based accelerators looking to help new companies build new technology products or service offerings are increasing. In the past three years alone the Los Angeles Dodgers, Philadelphia 76ers, Minnesota Vikings, and Dallas Cowboys have all created accelerators to make strategic investments in new, growing companies.  What has caused the rise in these types of investments? It is difficult to think of an industry more affected by technology than sports. This includes (but is certainly not limited to) the live digital streaming of games to different devices, the growth of social media to reach fans, the impact of mobile ticketing apps, the use of virtual reality to help players train and improve performance, the implementation of cameras around venues to track player movements, the rise of wearable technologies, and so much more. Success in nearly any position in the sports industry requires staying aware of technological developments and seeing how they directly impact a team, league, event, player, or agency.  This makes these former executives such as Stern ideal investors in rapidly-growing companies for three main reasons: first, these industry experts have been at the forefront of this sports technology wave. They often understand the customer types new companies are trying to target because they either were the customer themselves or have been interacting with fans, media, sponsors, and employees on a daily basis. Therefore, these investors can be critical in product development and can aid in making enhancements that improve the product in a timely manner. Second, these executives have often interacted with people that can become future employees of these growing organizations. Identifying top talent is crucial to the growth of young companies and is often difficult to complete. Third, the network that these executives have developed introduces these young companies to customers that most growing companies would never have access to otherwise.        Sports is often a zero-sum game because there is usually a clear winner and a loser. Investment in sports by industry leaders, however, is a win-win proposition. Young companies benefit from the industry expertise that investors provide, which can immediately impact these growing organizations.   Adam is the CEO and Founder of the sports sponsorship technology and analytics firm Block Six Analytics (B6A,) whose clients include Pepsi, Gatorade, Cleveland Browns, Philadelphia 76ers, and Comcast SportsNet. In addition, he is a lecturer for Northwestern University’s Masters of Sports Administration where he teaches classes focused on developing and communicating strategic insights through data. He has written for Forbes, The Washington Post, The Chicago Tribune, and Comcast SportsNet Chicago and has been featured as industry expert on CNN, Marketplace, SB Nation Radio, and ThePostGame.
BY ADAM GROSSMAN

From Commissioner To Investor

David Stern has moved from commissioner to investor. The former NBA commissioner is no longer focused on growing the business of basketball, but rather looking at the growth that sports technology can have on the entire industry.

        
  
 
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   Transparency Is The New Game In Town      

 
   
     
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
     
   
      By Adam Grossman  The Super Bowl is not just the most important game of each NFL season; it is typically considered the championship for advertising with the culmination of campaigns that have been months in the making. The fact that companies will pay at least  $5 million  for 30-second television advertising spots shows just how important the Super Bowl is to advertisers.  The most important advertising news this week, however, may have little to do with the Super Bowl. Marc Pritchard, Procter and Gamble’s (P&G) Chief Marketing Officer, this week authored a scathing critique of the advertising industry, which has arguably overshadowing any news of any upcoming Super Bowl commercials. As  CNBC  explains:  Procter & Gamble, one of the world's highest-spending advertisers, has called on the media buying and selling industry to become transparent in the face of ‘crappy advertising accompanied by even crappier viewing experiences.’ P&G has given agencies a year to get to ‘a transparent, clean and productive media supply chain,’ or risk losing its business, according to Pritchard.…’Better advertising and media transparency are closely related. Why? Because better advertising requires time and money, yet we're all wasting way too much time and money on a media supply chain with poor standards adoption, too many players grading their own homework, too many hidden touches, and too many holes to allow criminals to rip us off.’  Even if Pritchard’s comments reflected only P&G’s perspective then this would still be significant since the company spends $2.8 billion per year on advertising. However, Pritchard articulates something that has long been a problem for advertising buyers; it is very difficult for even the largest companies in the world to secure ROI metrics that are transparent, easily understood, and that fit their business.  Block Six Analytics’ (B6A) solutions are specifically designed to address these issues for both buyers and sellers of advertising and sponsorships. In particular, our Corporate Asset Valuation Model is completely transparent. A company can see exactly how a relationship with a seller impacts its specific business from both a brand and revenue perspective using best practice valuation approaches. This model is consistently updated throughout a campaign or year in our proprietary Partnership Scoreboard software as a service (SaaS) platform so that buyers and sellers can see the value of their advertising and sponsorship at any time.  Pritchard’s comments demonstrate that advertisers no longer think that having these types of clear metrics are just “nice to have.” Instead, companies like P&G are going to require that sellers and agencies clearly demonstrate and communicate the value that is being delivered by advertising before making a purchasing decision. The companies and agencies that cannot provide this information risk losing significant advertising revenue.
BY ADAM GROSSMAN

Transparency Is The New Game In Town

The Super Bowl is not just the most important game of each NFL season; it is typically considered the championship for advertising with the culmination of campaigns that have been months in the making. The fact that companies will pay at least $5 million for 30-second television advertising spots shows just how important the Super Bowl is to advertisers.

      CEO Adam Grossman Discusses Opportunities and Trends Headed into 2017 in  the Sponsorship Space      

 
   
     
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
     
   
      By Adam Grossman  Question: How has sponsorship changed the past few years and what are some trends to look out for headed into 2017?  How do you teach a computer to see? This idea still may seem far-fetched to many in the sports industry. Computer Vision, however, is a field of machine learning that already exists, where programmers can train computers to recognize images, logos, and people in videos or images. Teaching a computer to “see” enables the machine to collect more data more quickly and more accurately than ever before to determine when, where, and how long a sports sponsor’s logo was on screen during a broadcast. Computer Vision is a good example of the biggest change that has and will continue to impact sports sponsorship. New technology allows sports sponsorship buyers and sellers to collect more data than ever before. This has caused buyers to want to use that data to enhance their decision-making process. More specifically, sponsors now expect that big data can generate big insights and maximize the benefits of their relationship with a team, league, event, or athlete across different channels, based on the sponsor company’s strategic goals. The proliferation of new technology to create and collect data will necessitate that sports properties quickly and effectively analyze data and highlight value created by a sponsorship. Communicating using a language based on data will be at the heart of conversations around sports sponsorship in 2017.  Read more from industry experts on sponsorship trends via  The Sponsorship Space  and check out  Block Six Analytics  for ways that sports properties, brands, and agencies can take advantage of these trends.
BY ADAM GROSSMAN / ORIGINALLY POSTED ON THE SPONSORSHIP SPACE

CEO Adam Grossman Discusses Opportunities and Trends Headed into 2017 in the Sponsorship Space

How do you teach a computer to see? This idea still may seem far-fetched to many in the sports industry. Computer Vision, however, is a field of machine learning that already exists where programmers can train computers to recognize images, logos, and people in videos or images.

        
  
 
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         Artificial Intelligence Drives Real Insights in Sports     

 
   
     
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
     
   
      By Adam Grossman and Alberto Rios  How do you teach a computer to see? For a large part of the twentieth century, leading scientists and mathematicians thought this was impossible. In the late 1980s, however, the first computer neural network was created that programmers could train to recognize images, logos, and people in videos or images. Today, consumer grade graphics processing units (GPU) have become powerful enough to enable computers to deliver near real-time results. Teaching a computer to “see” enables the machine to collect more data more quickly and more accurately than ever before to answer when, where, and how long a sports sponsor’s logo was on screen during a game broadcast or press conference.  Within the last 30 years, the concept of machine learning has transformed from being a near-impossible task to now being an integral part of the sports industry’s future. A good example of the use of machine learning on the field is PitchF/X in baseball.  PitchF/X  “tracks the position, speed, and  break  of a ball, outcomes like hits, strikes, foul balls, and so on, and uses a  machine learning algorithm  to categorize the pitch type (e.g.: four-seam fastball, changeup, curveball, slider)”. PitchF/X removes the need for humans to watch videos and document every at-bat. Instead, teams can collect information about both hitters and pitchers more quickly and more accurately than ever before. This information then can be provided to hitters as insights on what pitch is more likely to be thrown by a player during a certain pitch count. In addition, this information can be provided to pitchers on what pitches a hitter will be more likely to swing at during an at-bat.  How exactly does a computer learn to see? At our company, Block Six Analytics (B6A), we have developed a neural network for object identification using computer vision software we call our Media Analysis Platform (MAP). One can think of a neural network as the brain of a computer. The human brain learns through repetitive practice to acquire knowledge and by storing said knowledge in neurons, or brain cells. Each neuron collects a tiny bit of information and combines it via neural pathways in the brain to create an output. For example, students can learn algebra or how to speak in Spanish by practicing tasks repeatedly. Each neuron in the brain learns a bit of information about the subject and the combines so that one becomes fluent in algebra or Spanish. Our neural network takes a similar approach to learning how to identify a specific object. We teach our system by showing it hundreds pictures of that object and it “practices” on how to classify that object based on features such as shape and color. Each practice session enables our neural network to learn how to become better at object recognition until it masters the concept.  Machine learning enables everyone in the sports industry to collect and analyze more data than ever before. The challenge is how to communicate the insights using this data to improve decision-making on important strategic challenges. In the Pitch F/X example, baseball players have fractions of seconds to determine whether to swing or not swing at a pitch. Giving players all of the data that PitchF/X provides may slow down their decision-making processes and make them worse hitters. As Travis Sawchik described in his book   Big Data Baseball: Math, Miracles, and the End of a 20-Year Losing Streak  , the Pittsburgh Pirates’ data analysts spent hours talking with coaches and players talking about machine learning. In addition, their data analytics team created spray charts, heat maps, and other data visualizations tools that made as easy as possible for players and coaches to understand the data.  Artificial intelligence is easier to leverage than ever before and creates real insights that impacts strategic decision-making. Big data analysis, however, requires a communication strategy to translate machine learning into actionable intelligence that can be used by everyone in a sports organization. 
BY ADAM GROSSMAN AND ALBERTO RIOS

Artificial Intelligence Drives Real Insights in Sports

How do you teach a computer to see? For a large part of the twentieth century, leading scientists and mathematicians thought this was impossible. In late 1980s, however, the first neural network was created that programmers could train computers to recognize images, logos, and people in videos or images.

      Check Out CEO Adam Grossman's Newly Published Book Chapter     

 
   
     
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
     
   
      CEO Adam Grossman has published a new book chapter detailing the inner workings of sports sponsorships in the book  Sport Business Analytics: Using Data to Increase Revenue and Improve Operational Efficiency .  For more information about Adam's new book chapter (Chapter 10), check out  CRC Press  or  Amazon .
PRESS RELEASE

Check Out CEO Adam Grossman's Newly Published Book Chapter

CEO Adam Grossman has published a new book chapter detailing the inner workings of sports sponsorships in the book Sport Business Analytics: Using Data to Increase Revenue and Improve Operational Efficiency.  For more information about Adam's new book chapter (Chapter 10), check out CRC Press or Amazon.

        
  
 
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     Meetings Should Not Only Happen In The Winter      

 
   
     
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
     
   
      By Adam Grossman  Major League Baseball (MLB) Winter Meetings are currently taking place and will last through December 8th in National Harbor, Maryland. MLB news will be focused on player transactions, including star pitcher Chris Sale being traded from the White Sox to the Red Sox. Numerous big free agent signings and player trades should occur throughout the course of the week.  MLB is not alone in having these types of gatherings; all major professional sports leagues having a similar meeting. However, the focus is on team operations. What is less typical, however, is for leagues to host events for the business operations side of the business. More specifically, teams within a league often do not meet in person to discuss and share best practices.  As my co-authors and I discuss in our book   The Sports Strategist: Developing Leaders For a High-Performance Industry  , we think this could be a mistake. Sports organizations are in a unique competitive position in two particular ways. First, sports organizations in a professional league have at least one or more teams in direct competition within the same league. Second, teams within a league usually have some form of revenue sharing on items ranging from ticket sales, media rights deals, sponsorships, and merchandise.  Yet, teams within a league still do face stiff competition. This includes competition from other domestic professional and college sports leagues, the rise of new sports such as drone racing and eSports, and the influx of international sports leagues trying to secure a larger American audience such as the English Premiere League.  What this means is that teams within a league should be focusing on sharing best practices as much as possible. This would enable business leaders to explore best practices in an open, collaborative environment that would facilitate the growth of each team and the league as a whole. For example, big data is a challenge faced by many sports teams. Team are receiving so much data from ticket sales, digital media, merchandise, concession, and mobile platforms than ever before. The question exists of how to turn all of this unstructured data into meaningful insights that drive results. Relatively few teams, one notable example being the  Cleveland Browns , have created a data warehouse. In addition, many teams do not have time or resources to determine what is the best way to construct a data warehouse. Determining what the best way is to aggregate, analyze, and communicate data, and sharing those successful practices, would make it easier for each team to build a data warehouse.  This not to say that leagues are not taking steps to encourage collaboration. The NBA and NFL each have an annual technology summit for league members to attend. The NBA has created  TMBO  as a group “responsible for developing, compiling, analyzing, and sharing among teams.” As a way to drive franchise profitability, the MLB created MLB Advanced Media (MLBAM) to centralize development and share insights across the league. In addition, leagues frequently have conference calls to discuss best practices.   
  
 
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     While often fierce competitors on the field, teams within the same league function more like partners off the field. Growing these partnerships by placing more emphasis on meetings (whether in-person or virtually), collaboration, and dialogue between teams in the same league should help everyone generate more money.
BY ADAM GROSSMAN

Meetings Should Not Only Happen In The Winter

Major League Baseball (MLB) Winter Meetings are currently taking place and will last through December 8th in National Harbor, Maryland. MLB news will be focused on player transactions, including star pitcher Chris Sale being traded from the White Sox to the Red Sox. Numerous big free agent signings and player trades should occur throughout the course of the week.

      DirecTV's NFL Relationship Creates Winning Formula For Sports Partnerships     

 
   
     
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
     
   
        
  
 
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    By Adam Grossman  One of the most commented-on stories this year in sports business is that NFL year-over-year ratings have declined during the 2016 season. Some have wondered if this a long-term problem or a short-term issue caused by one-time events, including the 2016 presidential election the and the Chicago Cubs run to a World Series championship.  While there are likely long-term challenges facing the NFL’s broadcast success, DirecTV’s success indicates that this could be more of a short-term problem. As Mike Snider of  U.S. Today  explains, “DirecTV added 323,000 net new subscribers in the July-September period, according to research firm the Leichtman Group. That brings its subscriber numbers to 20.8 million, the firm estimates. Overall, the pay-TV industry lost more than 255,500 subscribers during the quarter.”  The success of DirecTV in this adding subscribers leads to two important potential insights. The first is that having relationships with major sports leagues can be an extremely valuable asset. Arguably the biggest differentiator between DirectTV and other pay-TV providers (think other cable or satellite companies) is the NFL Sunday Ticket package. DirecTV provides a unique service offering that enables fans to stream out-of-market games through different channels including television sets, computers, Apple TV, Amazon Fire, Xbox One and Samsung smart TVs. Having the NLF Sunday Ticket has given DirecTV a competitive advantage that appears to be driving subscriber growth.  In our book   The Sports Strategist: Developing Leaders for a High-Performance Industry  , my co-authors and I show that sponsors are looking for direct ways to monetize their partnerships with sports organizations. DirecTV is an example of how partners work with sports organizations to achieve this goal. One could argue that DirecTV’s, which was purchased this year by AT&T for $48.5 billion, value comes almost entirely from the NLF Sunday Ticket because of the competitive differentiation is provides from other pay-TV providers. While not every partnership will be able to provide this level of result, successful sports organizations will be the ones that able to clearly deliver direct business benefits to their sponsors.   The second insight is that sports content is valuable in particular when it can be accessed across multiple different devices. Over the past five years, the fees for sports media rights deals have increased substantially for many large sports organizations. Critics have argued that sports content is actually  not that valuable  and these deals will not drive tangible results. In particular, these deals will become increasing difficult to profit from as more people move away from traditional television.  DirectTV’s deal with the NFL shows that this is likely not the case. There is still a significant demand for sports content, especially when it can be consumed through different channels. DirecTV has worked hard to make NLF Sunday Ticket available on multiple different platforms. Combining a comprehensive channel strategy with unique sports content has played a significant role in expanding DirecTV’s subscriber base.  This is not to say that all sports content will keep increasing in value or that criticism of media rights deals is without merit. ESPN and FS1 have lost millions  subscribers  over the past few years even with several new media right deals being signed. In addition, rights fees for some smaller sports properties have  declined in 2016  because they have not achieved their subscriber / revenue goals. These are not small problems and will need to be addressed in the future.    However, it is clear that premium sports content can deliver premium results. This is the reason that companies such as Amazon, Netflix, Twitter, and Yahoo have or are exploring  media rights deals  with large sports organizations. As John Ourand of Sports Business Journal  states , “Live sports rights still are critically important to television networks. Live sports is the most advertiser-friendly genre on television. The programming is DVR-proof, meaning that viewers can’t fast-forward through the commercials.”   
  
 
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     While media rights deals create a clear business case for media partners, it is only one asset that sports organizations have to generate incremental growth. Sports organizations should (and  often do ) look for more opportunity using its intellectual property to create a win-win relationships for the team and its sponsors. 
BY ADAM GROSSMAN / ORIGINALLY POSTED ON FORBES

DirecTV's NFL Relationship Creates Winning Formula For Sports Partnerships

One of the most commented-on stories this year in sports business is that NFL year-over-year ratings have declined during the 2016 season. Some have wondered if this a long-term problem or a short-term issue caused by one-time events, including the 2016 presidential election the and the Chicago Cubs run to a World Series championship.

      Polling People Is Problematic     

 
   
     
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
     
   
      By Adam Grossman  “Pollsters are turrible.” Most people today are sharing Charles Barkley’s stance on analytics given the results of the Presidential elections. More specifically, people are asking how experts in predicative analytics and mathematical modeling could have been so wrong about the outcome of the election. This seems to be a big problem with big data.  The first counter to this conventional wisdom is that Hillary Clinton will actually receive around 1.5 million more votes than Donald Trump. Prior to the election, the national polls had Clinton leading Trump by about 3%. In actuality, Clinton finished with about a 1.5% advantage over Trump in the popular vote. While the polls were not completely accurate, they did “accurately” predict the person that would receive the most votes. The counter is that person who wins the majority of votes in the Electoral College actually wins the Presidential election. Trump clearly received of majority of votes there.  However, the “blame” is primarily being placed on the wrong people. It is not necessarily data scientists or data journalists whom are to blame. How could people like Nate Silver correctly predict the outcome of every single state in previous elections if their methods were completely wrong?  The problem comes not from data analysis but from data collection. More specifically, polling firms likely encountered tow problems that are very common with surveys. First, it can be very difficult to find a truly representative sample of a population. Second, people do not always act in the ways that say they are going to on a survey.  The first problem for political polling is that modern technology actually makes it more difficult to get a truly representative sample of voters. Pollsters have a very hard time contacting people using mobile phones. This means that millennials and younger voters are often more difficult to target. Also, it is more expensive to conduct polls in multiple languages which could mean that people where English is not their first language could be under-sampled by polling firms. Online polls are used but often have difficulty preventing people voting multiple times or creating fake accounts to vote for their preferred candidate.  This explanation, however, could seem to suggest a Clinton victory as these demographics were more frequently her voters. The second problem could be the larger reason for the outcome of election. Response bias is termed used when people tells a pollster or purveyor of a survey what they want to hear instead of what they actually believe or will do. The best practice in data collection is to aggregate and analyze data on real actions and behaviors. More specifically, relying on what people say creates a higher likelihood of sampling error.  In politics, there is almost no way to definitely measure actual behavior prior to an election. People do not actually vote for anyone until the election. Even primary voting is not always a good predictor of what will happen in a general election because people are only voting for people in one political party. Even if there was some form of actual vote before an election, voting is done with secret ballots. While all votes should be counted, one should not be able to tie an individual voter to an individual vote. This enables people to vote for whomever they would like without any real or perceived threat of retribution for their actions.  That is not necessarily the case with polling before the election. In particular, a pollster will know whom he / she is contacting and will often speak directly to voters. Coming into this election, voter response bias would likely have favored Clinton. Trump’s policy positions on race, gender, and religion would were often considered to be offensive even to the people that may have ended up voting for him. Therefore, publicly stating a person would vote for Trump would be more difficult than actually voting for him on election. This would mean that what people were telling pollsters was not an accurate reflection of what they actually did on election day, and there is no way to know for sure what percentage of voters used some form of response bias.  One of the many lessons from this campaign season is that survey data can often be unreliable. Yet, senior leaders at many different companies often make decisions and predictions based on survey or focus group data rather than focusing on actual behavior. This introduces the problem of response bias into the strategic decision making processes in ways that can create unexpected outcomes like Trump becoming the President-Elect. Therefore, this election actually is a feature rather than bug when it comes to big data. New technologies do enable us to capture actual behavior more frequently and more accurately than ever before. In fact, the growth of “The Internet of Things” (IOT) is based on the ability for appliances, wearables, and machines to collect actual data. The election should not necessarily sway your point-of-view on analytics or big data. Make sure you have all of the information first before making that decision.    
BY ADAM GROSSMAN

Polling People Is Problematic

“Pollsters are turrible.” Most people today are sharing Charles Barkley’s stance on analytics given the results of the Presidential elections. More specifically, people are asking how experts in predicative analytics and mathematical modeling could have been so wrong about the outcome of the election. This seems to be a big problem with big data. 

        
  
 
  
    
  
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   How Campaigns Are Connected to Sports      

 
   
     
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
     
   
         By Adam Grossman  LeBron James, Tom Brady, and Bill Belichick have become famous supporters of different candidates in today’s Presidential election. However, this is not the only way to connect sports and politics. Election Day is often considered the game day of politics. More specifically, it is the one day during a political cycle where there is almost always a clear winner and clear loser (with the 2000 Presidential race being a notable exception). The scoreboard is the vote total where whomever receives the most wins.  But how do candidates try to score the most points with voters? Similar to sports, political campaigns are increasingly integrating data and analytics into their overall strategy. More specifically, collecting information on voters enables campaigns to more effectively use their economic, political, and human capital resources.  How does this work in practice? Just as in sports, a candidate only needs to have the highest number of votes as compared to his / her opponent(s) to secure victory. A winning candidate/campaign has:   ·   Ensured that as many supporters of the candidate as possible vote on election day.   ·   Ensured that marginal voters will choose their candidate over their opponent(s). A marginal voter is someone who considers voting for multiple candidates during an election but is influenced to select one.   ·      Ensured that the campaign has not wasted resources on voters that are never going to vote for its candidate.   ·   Ensured that the opponents’ voters do not vote on election day.  The Presidential race between Hillary Clinton and Donald Trump has seen candidates use data analytics tactics in order to implement strategies to achieve these goals. In particular, data has been used by both campaigns to determine how to effectively target supporters, reach undecided voters, and convince voters for the other candidates to stay home.  A great example of how campaigns have used data in the past is in the book  Victory Labs , by Sasha Issenberg. Then Senator Barack Obama’s campaign found that if supporters signed a non-binding pledge to vote, they were significantly more likely to actually vote during an election. To clarify, in no way did signing a pledge mean that a voter had to vote at all and certainly not for Obama. Yet, Obama’s campaign discovered that taking a small, public step towards making a commitment to vote became a critical factor in actually getting people to vote.        Sports teams can use data to drive similar results for their organizations to solve a critical challenge facing the industry – increasing event attendance. More specifically, many sports including professional and college football have seen  consistent year-over-year declines in attendance . One of the ways to combat this issue is to leverage big data. Sports teams can now collect information including, when a fan enters the venue, what concessions they purchase, how frequently they access WiFi, and how often they interact with a team’s social media account. This treasure trove of information should provide insights on what can be done to increase attendance.  The main challenge is that teams often work for different vendors for each part of the game day experience. Usually, a team will have different provider for tickets, concessions, merchandise, and digital media.  The Cleveland Browns  are an example of a team that turned this challenge into an opportunity. More specifically the team constructed a data warehouse that could aggregate the information from different sources into a single place to be analyzed. Then, the team created custom campaigns for different demographics based on the insights it gained about its customers across the entire fan experience. This included a campaign to ensure that devoted season ticket holders were more likely to come and come early to games. It also created a specific campaign for marginal fans that could be persuaded to attend games with the right outreach. In addition, the Browns could determine which fans were unlikely to respond to even the best marketing to buy a ticket for a game. Finally, it was possible to use information to start limiting purchases from fans of the opponents’ team using geographic (often zip code information from a credit card) or demographic data. Implementing a data warehouse has increased revenue significantly for the Browns and put the team in the best position to succeed in the future regardless of how the team performs on the court.  It is rare that Democrats and Republicans can agree on anything during an election. However, both parties are leveraging data to enhance the likelihood of success in races throughout the country on Election Day. Sports teams can apply this same approach to help ensure that fans show up to support their teams on game day. 
BY ADAM GROSSMAN

How Campaigns Are Connected to Sports

LeBron James, Tom Brady, and Bill Belichick have become famous supporters of different candidates in today’s Presidential election. However, this is not the only way to connect sports and politics. Election Day is often considered the game day of politics.

        
  
 
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  Do New Venues = New Sponsorship Dollars?     

 
   
     
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
     
   
      By Adam Grossman  If you build it then they will come, but how long will the stay? The first regular season game at the Golden One Center was the culmination of the city of Sacramento and ownership’s efforts to ensure that the Kings would be in the best possible position to achieve success on and off the court. The Kings are part of a group including the Milwaukee Bucks, Minnesota Vikings, Minnesota United, Atlanta Falcons, and Atlanta Braves that have recently opened or will soon be opening a new venue.  While there are many reasons to be build a new venue, one key element is generating new corporate partnership opportunities. Naming rights deals are the most common with the Vikings and Falcons having already secured lucrative deals for their new venues. However, new venues also provide opportunities for teams to create new sponsorship activations inside the venue including new / improved dynamic signage, location-based advertising campaigns using geo-fencing or beacon technology, and larger / more corporate hospitality suites. A new venue seems like a slam dunk for teams looking to maximize sponsorship revenue.  Sports properties often use the opening of new venues to also increase the price points of sponsorship opportunities. Not only do new venues mean a higher number of activations but they should also generate a higher number of impressions with fans and media. In particular, per game attendance should increase as fans will want to come to a game at a new venue to a compare the new experience to the old one. The paid and earned media surrounding a new venue opening means that teams can maximize the exposure provided to corporate partners.  However, teams need to be careful to not rely on new venues to generate new sponsorship dollars over the long-term. More specifically, the initial increases in impressions can decrease over time as the newness of the venue wears off for fans and the media. This then could lead to decreases in attendance and earned media and lower the number of impressions generated by new venue sponsorship activations.  Even if the increases in impressions are maintained over time, corporate partners are not solely looking at the quantity of impressions as the benchmark for success in their relationships with team. They are also looking to make sure that all impressions help drive new business and help achieve their brand goals. More specifically, partners want to make sure that impressions are going to the right people, in the right place, and at the right time.  In addition, corporate partners are not looking solely at the in-venue portion of corporate partnerships. Sponsorships are often sold as integrated packages where venue activations need to evaluated alongside media, social, event, intellectual property, and hospitality channels. The most successful sports properties will be the ones who can communicate the value of new venue activations while also clearly articulating the return on investment in these other channels at the same time.   New venues can help buyers and sellers of sports sponsorship to increase revenue. However, sports properties should not solely rely on short-term impression boosts for new venue corporate partnership agreements. Instead, sports properties must communicate to partners how a new venue will generate a high quantity of high quality impressions over time. 
BY ADAM GROSSMAN

Do New Venues = New Sponsorship Dollars?

If you build it then they will come, but how long will the stay? The first regular season game at the Golden One Center was the culmination of the city of Sacramento and ownership’s efforts to ensure that the Kings would be in the best possible position to achieve success on and off the court.