What Makes Pogba, Ronaldo, and Messi $100 Million Men   BY ADAM GROSSMAN, ANDREW JACOBS, AND PAT MOCHEL     

 
   
     
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
     
   
      Soccer’s summer transfer window begins this weekend as the wealthiest clubs in European soccer will likely spend millions on top talent from around the world in the transfer market. The question then becomes how much do you pay? According to Rory Smith’s recent article in   The New York Times      entitled “Soccer’s Confounding Calculation: What’s a Player Worth?” there does not appear to be a good answer. More specifically, “This is also what lends the transfer market its veneer of chaos, the sense that even experts are grasping in the dark: each club and each individual acting according to a value system only they know, and having a willingness to change it from case to case.”  So why are soccer players so hard to value? To start, it is really difficult to determine an individual player’s contribution to winning. Dubbed the beautiful game, soccer is 22 athletes weaving across the pitch, each having a unique effect on the flow of the game. Additionally, soccer has few quantifiable stats over a season, with even the most elite strikers having under 100 shots per year and elite defenders tallying few recordable stats. Contrast this to a data heavy sport like baseball, blessed with mountains of data, with starters amassing over 500 plate appearances a season with easily quantifiable outcomes.  Even with these difficulties, individual player performance metrics are being developed and refined. Expected goals is a way to quantify a team’s ability to create quality chances, a topic near to the heart of both managers and fans. Additionally, Audi’s Player Index (API) has been utilized in the MLS to quantify and evaluate nearly every action a player takes on the field. By allocating positive or negative points for 88 possible action items, like a key pass or a missed penalty, the API attempts to quantify a player’s contribution to the team. Expected Goals and API certainly both have their limitations, but they are only the first steps when evaluating on field success.  If these player performance metrics were perfect, however, that would still not provide a team with a player’s full value. The foundation of Smith’s exploration of this topic centers on the belief that finding players that will help a team win more games means that these players will also help a team generate more money. The problem is that this belief is not correct. More specifically, winning is not the only way that teams generate money from players.  If we think of soccer players as more traditional assets that companies hold on their balance sheet, then we are more likely to be able to quantify their value. In purely economic terms, assets are primarily considered valuable for the cash flow they can deliver to their organization. Soccer players are potentially valuable assets that can help teams generate revenue during a season and / or can be sold to other teams to bring in revenue in one-time transactions. The way we can quantify the impact of player’s on-field contribution to a team is by determining what impact winning has on generating revenue for the organization. In particular, how much more money does a team make in ticket, media, sponsorship, merchandise, concessions, and parking sales when it wins. Once this is determined then we can look at a player’s contribution to winning (i.e. what percentage of a team’s likelihood to win is attributed to a player) and determine his economic value.  Perhaps just as important as an individual player’s on field contribution, however, is his / her off-field impact. More specifically, fans want to see star players and star players do not necessarily mean players that solely help their teams win. Paul Pogba’s record breaking transfer fee to Manchester United is a good example of why off-field impact matters. Before Pogba stepped on the field for the Red Devils, Adidas was able to activate a social media campaign with substantial results. “At around midnight on 7th August, Adidas’ official Twitter account ‘accidentally” leaked a music video featuring Pogba, clad head to toe in Manchester United gear…The 48-second music video features Pogba dancing alongside Stormzy as he raps a verse from his song, ‘Nigo Duppy’. Instantly catchy and shareable, the video had been viewed six million times on Twitter by the end of the day. To put that in perspective, Pogba’s six million views in a day dwarfs the 318,000 views that Granit Xhaka’s Arsenal announcement video received, and dominates the 278,000 achieved by Chelsea’s account as they unveiled N’Golo Kante.” Pogba’s star power translated into immediate success for both United and Adidas.  Pogba also shows how player valuations are highly context dependent and can vary widely by team. For starters, a value of a win varies drastically by team, especially in a sport that financially rewards positive performance as much as European soccer. Two additional league wins for Arsenal FC in 2016/2017 would have resulted in a champions league spot and a nice paycheck of $14 million. Contrast that to fellow London club West Ham where two additional wins would have moved them from 11th to 9th which would lead to no monetary reward. In addition, a player’s ability to command attention will be different on different teams. For example, seven out of the  top-ten selling jerseys in MLS  came from European players in 2016 that had previously played for long stretches on the continent. While the star power of someone like David Villa has faded in La Liga in Spain, these type of players do have the ability to generate significant revenue for teams in the MLS that is not dependent on how much or how well they play in the MLS.    Block Six Analytics Revenue Above Replacement (RAR) is designed specifically to examine how a player’s on-field and off-field performance helps a team generate top-line revenue growth. We first determine how much of a team’s revenue is generated by on-field and off-field performance. We then determine an athlete’s contribution to winning and his / her overall ability to engage with fans, media, and sponsors in ways that generate revenue for a team. Therefore, RAR calculates the revenue a player would generate given a specific team at a specific time using a comprehensive, data-driven, and context dependent starting point in evaluating players. Taking this approach enables us answer the question about how much a player is worth.   
BY ADAM GROSSMAN, ANDREW JACOBS, AND PAT MOCHEL

What Makes Pogba, Ronaldo, and Messi $100 Million Men

Soccer’s summer transfer window begins this weekend as the world’s wealthiest clubs in European soccer will likely spend millions on top talent from around the world in the transfer market. The question then becomes how much do you pay?

      From the Hardwood to the Boardroom  By Adam Grossman     

 
   
     
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
     
   
      It is no secret that  many athletes  that earn millions playing professional sports end up going into bankruptcy soon after their athletic careers are over. One of the most common ways athletes lose their fortunes is through poor investment decisions. In fact, there is no shortage of articles  highlighting  the “worst investments pro athletes ever made” on a variety of deals. In particular, athletes have lost a significant amount of money making bets on technology or working with financial services companies.    This is one reason that the recent announcement of the  Players Technology Summit  co-hosted by Golden State Warriors Stephen Curry and Andre Iguodala along with Bloomberg Media is particularly interesting. Rather than running away from technology or investing in companies, athletes are running towards these opportunities. This technology summit will bring together NBA players for a networking event to “share secrets on how [NBA Players are] disrupting Silicon Valley.”  That the last phrase in the previous paragraph sounds like something you would hear from a venture capital (VC) fund, rather than an NBA player, is no accident. Many athletes have become much more savvy investors and function more like general partners at venture capital firms. Iguodala states that athletes can take advantage of their wealth and fame to be in a  position , "to learn from some of the best in the tech and venture capital business and put those learnings to work."  Proactively seeking out advice from industry leaders is a significant change in wealth management strategy. In exchange, investors from Silicon Valley gain valuable insights into the rapidly growing sports technology space. Image tracking, geo-location, and wearable technologies are some of the areas that are attracting significant VC dollars. Gaining insight from the athletes who use these technologies at the highest level will better enable these funds to identify promising companies for investment.     These interactions have been an impetus for athletes to start their own VC funds. More specifically, athletes can evaluate early-stage investments for potential growth and make investments in exchange for equity in those companies. In particular, athletes can leverage their own personal experience on and off the court to help find the companies that can “disrupt”, or fundamentally change, entire industries. In fact,  current and former NBA players  such as Carmelo Anthony, Kobe Bryant, Steve Nash, and Jamal Mashburn have started their own VC funds with industry veterans to invest their personal and outside capital.  It is not clear that NBA players are going to receive the outsized investment returns that VC funds strive to achieve by making bets on growth companies. However, the Players Technology Summit puts the players in a better position off the court to be successful in managing their personal wealth earned on the court. 
BY ADAM GROSSMAN

From the Hardwood to the Boardroom

It is no secret that many athletes that earn millions playing professional sports end up going into bankruptcy soon after their athletic careers are over. One of the most common ways athletes lose their fortunes is through poor investment decisions. In fact, there is no shortage of articles highlighting the “worst investments pro athletes ever made” on a variety of deals. This is one reason that the recent announcement of the Players Technology Summit co-hosted by Golden State Warriors Stephen Curry and Andre Iguodala along with Bloomberg Media is particularly interesting. Rather than running away from technology or investing in companies, athletes are running towards these opportunities. 

      From Education to Entertainment     

 
   
     
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
     
   
      By Andrew Jacobs  Erin Hills in Wisconsin is hosting golf’s U.S. Open Championship for the first time. The new venue, however, is only one change for one of the country’s oldest tournaments.  As part of its live coverage, FOX Sports will implement an array of technological tools to enhance their golf broadcast including augmented reality course overviews, drone flyovers, and shot tracing technology at all 18 tee boxes. Golf’s TopTracer technology and other similar technology offerings allow fans to see the exact flight pattern of the ball, as well as a golfer’s carry and apex of their swing. These new technologies will enable viewers to see data analytics on everything from drive apex to spin rate, throughout FOX’s 45 hours of coverage.  The US Open highlights a growing trend in the sports industry. Today, the numbers are not purely educational. Data  is  entertainment.  More specifically, television networks are using data because fans want to see the numbers to better enjoy watching sports. “The information is important and informative to heighten the viewing experience,” noted FOX senior vice president of graphic technology Zac Fields in an interview with  Geek Wire.  “We view it as a necessity much like the yellow line in football.”    “Strokes gained” is another good example of the analytics viewers will likely see during this weekend’s broadcast. First introduced by Mark Broadie of Columbia University, strokes gained compares a player’s performance in one aspect of the game, such as putting or driving, compared to the field average. Strokes gained has been used for several years by some of the game’s best but it has recently gained traction in the public discourse of fans and sports media. For example, fans can now tangibly see how Dustin Johnson’s long driving ability impacts his score as compared to other golfers’ in the field.  Across all sports, fans have shown an insatiable appetite for more and more stats and information about their favorite teams and players. MLB’s Statcast, a revolutionary tool utilized to analyze movements of both players and the baseball, has made nearly every aspect of the game quantifiable. First implemented into every stadium in 2015, Statcast data has been wholly available to fans for the first time this season and has been   met with great enthusiasm. Walk into a sports bar and you will hear chatter of Aaron Judge’s latest launch angle or Andrew McCutchen’s great outfield speed. Similar advanced metrics, like baseball’s Wins Above Replacement (WAR) or basketball’s offensive efficiency, have likewise been transformed from purely front office tools into media and fan base discussion points.    As fans appetite for data grows, opportunities exist for significant growth for technology, analytics, and media companies within the sports industry. First, opportunities exist for new and innovative ways to track movement and performance across all sports, not only for use by talent evaluators but also as entertainment for fans. Additionally, sports media companies looking to differentiate themselves in an increasingly crowded marketplace can leverage premium data and technologies to offer unique and valuable offerings for fans. For years, television networks have been worried that providing analytics would drive viewers away from game broadcasts. Now data is at the forefront of how networks want to engage fans with their favorite sports, teams, and players.
BY ADAM GROSSMAN AND ANDREW JACOBS

From Education to Entertainment

Erin Hills in Wisconsin is hosting golf’s U.S. Open Championship for the first time. The new venue, however, is only one change for one of the country’s oldest tournaments.  As part of its live coverage, FOX Sports will implement an array of technological tools to enhance their golf broadcast including augmented reality course overviews, drone flyovers, and shot tracing technology at all 18 tee boxes.

       The Mind Matters In Warriors Success      

 
   
     
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
     
   
      By Adam Grossman  Last night’s victory over the Cleveland Cavaliers provided the Golden State Warriors its second title in three years and capped off one of the most dominant three-year runs by any team in NBA history. One of the reasons this historic stretch is so remarkable is that the Warriors lineup is relatively ordinary from a physical perspective. Of the team’s vaunted “Lineup of Death,” a group known for dominating the competition for long stretches at a time, only Kevin Durant has physical skills that would be considered extraordinary in the NBA. In fact, this lineup is one of the smallest units in stature that played a significant number of minutes throughout the season. For instance, Stephen Curry and Draymond Green were specifically not taken earlier in their respective NBA drafts because many teams believed their physical limitations would prohibit them from becoming star players.     Rather than relying on physical ability, the Warriors have built their team around a motion based offense that hinges on players consistently making the decision that will maximize the team’s expected points for that particular possession. More specifically, the team’s players are asked to survey the court and make decisions quickly to generate open shots. It is the team’s mental strength, particularly focused on cognitive executive function, that enables the team to gain a competitive advantage. In fact, Curry has credited his  “brain training”  as one of the key factors of his on-court success.  Intelligence and decision-making testing have been a component of player evaluation for years. The most well-known example of this occurs prior to the NFL Draft when players take the Wonderlic Test. One of the more surprising findings is that Peyton Manning had a lower score than his brother Eli on the Wonderlic. One of the shortcomings of the Wonderlic, and other intelligence test such as IQ tests, is that they are testing a dependent variable. Essentially these tests measure if people have high levels of intelligence but not why and how they have these high levels of intelligence.  This is not the fault of the tests themselves. Until very recently, humans had very little understanding of how the brain works on a physiological level. At a basic level, the brain has cells called neurons that produce neurotransmitters that are sent across pathways to other neurons throughout the brain to stimulate activity. The stronger the pathways are, the more likely someone will learn a concept. The human mind does not need lines of code to work. It continually adapts as it learns by processing and adapting to new information on its own. Instead of cooking by following a recipe, the brain acts like a master chef that can make changes to a dish by tasting the dish as he / she cooks a meal.    This makes the rise of machine learning in technology particularly interesting. In the past, computer programmers would have to write thousands of lines of code telling a computer exactly what to do and how to execute a particular.  If a line of code contained even the smallest of errors, then the machine would not be able to complete its task. By using neural networks, engineers are enabling machines to be more like master chefs rather than cooks that follow recipes.  However, that is essentially the limit of understanding of how the brain works. In  Possessing Genius: The Bizarre Odyssey of Einstein's Brain   many scientist examined Albert Einstein’s brain posthumously and had tremendous difficulty finding any structural differences between the famous scientist’s mind and the normal person’s mind. Similarly, it is very difficult to understand how a machine learning platform makes changes to its neural network to achieve a task of identifying a logo during games. Essentially, the only way to impact the internal neural network is to change the external training stimuli and data sets. We do not really know how and why a machine makes the adjustments in its internal nodes to more accurately classify objects or identify faces.  New scientific advances may finally shed more light on how the brain and intelligence work. Recently, researchers have found a mutation in a gene in mice that controls communication between neurons in the brain. This mutation makes these mice  “savants of the rodent world”  and gives them superior intellectual ability. Other  scientists  have found 40 genes linked to intelligence showing that some of “your smarts are in your DNA”. We are closer than ever to finding out what physiological elements can lead to intelligence. From a sports perspective, these insights can eventually help teams better determine which players have the cognitive skills to perform at the highest mental levels during games. Rather than being an anomaly, teams could identify and assemble players with cognitive gifts, similar to how the 2016-17 Warriors did.  Human beings have been able to leverage our brain power to achieve extraordinary accomplishments even if we do not exactly how the mind works. Imagine what we could achieve we actually knew how intelligence worked on a genetic or cellular level. Drafting and signing players for the next NBA champion would just be the start.
BY ADAM GROSSMAN

The Mind Matters In Warriors Success

Last night’s victory over the Cleveland Cavaliers provided the Golden State Warriors its second title in three years and capped off one of the most dominant three-year runs by any team in NBA history. One of the reasons this historic stretch is so remarkable is that the Warriors lineup is relatively ordinary from a physical perspective. Of the team’s vaunted “Lineup of Death,” a group known for dominating the competition for long stretches at a time, only Kevin Durant has physical skills that would be considered extraordinary in the NBA.

       From Fast To Sustainable Growth Via Sports      

 
   
     
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
     
   
      By Adam Grossman  Frisco, Texas was the  second  fastest growing city in the United States in 2016. Over the past 20 years, the city has  grown  from 5,000 people in 1987 to over 163,000 in 2016. The rapid growth is in part due to large sports venue investments made via public / private partnerships the city has made with the Dallas Cowboys, Dallas Stars, FC Dallas and the Frisco RoughRiders (minor league baseball team) that make up the city’s  $5 billion mile .  However, Frisco appears to be shifting to a different type of investment when it comes to sports. Last week, Stadia Ventures brought its most recent cohort from its accelerator programs to explore the opportunities available for sports startups in Frisco. Hosted by LaunchPad City, which works with startups and has been in talks to bring a branch of Stadia Ventures to town, new companies from across the country were able to build relationships with leading sports executives throughout Frisco.  Building innovation hubs is not novel practice for cities or states looking to attract new businesses and top talent. San Francisco, Boston, New York City, and Chicago are among the many cities that have made significant investments in building the infrastructure for startups to thrive. In addition, many cities, states, and countries have made similar public / private investments in building facilities that Frisco has, often achieving less success, as we note in our book   The Sports Strategist: Developing leaders for a High-Performance Industry.    What is particularly interesting about this approach is that Frisco is making an investment in ways that will continue differentiate the city from other municipalities. Rather than focusing on just innovation, Frisco can narrow its focus to become the sports entrepreneurship capital. Given that sports is a  $57+ billion  year industry, there are a number of young companies entering the space and looking for homes for their businesses. It is one reason that Blue Star Sports, a leading provider of sports management software and payment solutions, which is in part financed by the Cowboys, has acquired  12+ companies  and has already moved some of them to Frisco.  In addition, Frisco can better monetize its own sports investments. One of the criticisms of public / private ventures involving sports is that they do not provide a significant enough ROI to the public. In particular, they do not directly provide new job growth politicians and citizens expected when the investments are made. Frisco may not have these problems to this extent or at all. Having a sports innovation hub means that teams in area have access to the exact type of innovative startups that will facilitate their own growth nearby. The startups have access to new clients that can provide the foundation for their growth, which will ultimately enable them to hire more people from the Frisco area. This ecosystem likely provides the best opportunity for the city to maximize its ROI from sports investments.  Frisco still has a long way to go to become the center of sports entrepreneurship. Hosting Stadia Ventures as the first step to building on its sports public / private partnerships puts Frisco in a good position to continue to be one of America’s fastest growing cities.        
BY ADAM GROSSMAN

From Fast To Sustainable Growth Via Sports

Frisco, Texas was the second fastest growing city in the United States in 2016. Over the past 20 years, the city has grown from 5,000 people in 1987 to over 163,000 in 2016. The rapid growth is in part due to large sports venue investments made via public / private partnerships the city has made with the Dallas Cowboys, Dallas Stars, FC Dallas and the Frisco RoughRiders (minor league baseball team) that make up the city’s $5 billion mile.

       Does Fame Turn Into Fortune?      

 
   
     
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
     
   
      By Adam Grossman  ESPN has  released  its World Fame 100 ratings to answer the question: “Who are the most famous athletes on the planet?” Through a formula developed largely by ESPN’s Director of Analytics Ben Alamar, the World Fame 100 examines endorsements, social media following, and Google search results to create a 1 to 100 rankings for players. Cristiano Ronaldo and LeBron James were the “winners” securing the first and second spots on the list, respectively.  B6A has examined a similar question using our Revenue Above Replacement (RAR) product offering. Rather than asking who the most famous athletes in sports are, however, we ask who is the most valuable player within each sport (i.e. looking at MLB players as compared to other MLB players rather than looking at MLB players versus NBA players).  On the surface, this could appear to be to a distinction without a difference.  More specifically, being famous often translates to being highly valued and being well compensated for that value. In fact, our Revenue Above Replacement model does factor in social media audience and endorsements into our calculation of off-field value in a comparable way to how the World Fame 100 utilizes it in its formula.  This, however, is the end of the similarities between the two approaches. In particular, the World Fame 100 fails to account for any type of “On-Field” value. More specifically, “Salary is not used as a factor because of differences among sports. For example, players in a league with a salary cap would be at an unfair disadvantage when measured against players in uncapped league.” There are several issues with this assertion. First, even leagues without salary caps have ways of restricting salary. For example, UEFA has introduced  Financial Fair Play  rules to make sure that teams cannot spend money on players’ salaries without being able to “prove they have paid the bills” (i.e. teams cannot consistently lose money even if owners are willing to pay for these losses). Alamar and ESPN could also introduce controls that are typically included in other studies that account for differences in payroll. For example, Alamar could compare athletes who earn similar salaries or make adjustments based on how a player's salary compares to that of the average player in the sport.  Second, if you are not using salary then how would this formula account for the fame generated by a player’s “On-Field” performance? In particular, what a player does on the field is what makes him famous in the first place. Salary could actually be a good indicator of performance. Generally, higher paid players are typically (but certainly not always) higher performing players. Using salary as a proxy performance metric and then doing some comparison to social media, endorsements, and search history would serve to enhance the model. What makes this omission particularly perplexing is that the list specifically does not include retired athletes, which should serveto further enhance the value of on-field performance. Therefore, it appears Alamar and ESPN acknowledge that the on-field considerations are important without examining this as a factor in the analysis.    B6A’s RAR model examines how a player’s on-field and off-field performance generates top-line revenue growth for his / her team / league. One of the reasons we developed our RAR model is that we did not think that players were being fairly compensated for their off-field “fame”. More specifically, players’ drive value to teams through their ability to engage with fans, media, and sponsors. Highly visible athletes and star power often does ultimately lead to revenue generation for teams. However, we recognize that on-field performance needs to be properly evaluated and that it impacts off-field performance, particularly when it comes to social media and endorsements. That is why our RAR model does examine a player’s ability and salary in relation to their off-field performance.  While we appreciate ESPN’s objective in compiling this list, we do not agree that it effectively answers the question of who is the most famous athlete.  It is interesting and important to create a framework to evaluate star power across different sports. This is particularly important when it comes to endorsements and corporate partnerships with athletes. While fame can lead to fortune, however, it is critical to understand why fame is created in the first place. By failing to look more in-depth at on-field performance, however, ESPN does not provide the best answer to its own question.
BY ADAM GROSSMAN

Does Fame Turn Into Fortune?

ESPN has released its World Fame 100 ratings to answer the question: “Who are the most famous athletes on the planet?” Through a formula developed largely by ESPN’s Director of Analytics Ben Alamar, the World Fame 100 examines endorsements, social media following, and Google search results to create a 1 to 100 rankings for players. Cristiano Ronaldo and LeBron James were the “winners” securing the first and second spots on the list, respectively.

       Using Numbers As The Language of Sports Sponsorship      

 
   
     
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
     
   
      By Adam Grossman  In a recent  conversation  with  RadioLab  co-hots Robert Krulwich, astrophysicist Neil Degrasse Tyson discussed how he broke down many challenging concepts in his new book   Astrophysics for People in a Hurry  . While understanding dark matter, quantum gravity, and electromagnetism may not happen “in a hurry” for most people, Tyson shares a critical insight that is potentially more digestible. He states how humans did not evolve to comprehend much of how the world works particularly on the macroscopic scale of the galaxy or the microscopic scale of subatomic particles. Humans evolved to comprehend things they can observe with their five senses. More bluntly, much of human history has been focused on survival rather than  worrying  about the cosmos.    Tyson explains that math is the language that allows us to explore and understand, which is the reason we use mathematical theories and models is to explain reality. By using the universal language of mathematics, scientists from across the globe can and do share insights that lead to discoveries about the fundamentals of nature. We can than test empirically whether theories we develop actually do “model” or explain reality using data generated from experiments.  Without math and the open sharing of ideas, humans would have a much more challenging time understanding how the world really works.  What does this have to do with sports sponsorship? It is not that sports sponsorship is as complex astrophysics (thankfully). However, the complexity of sports sponsorship is growing at a rapid rate. In particular, new technologies are developing so quickly that it is difficult for sports industry professionals to keep track. This includes developments in virtual reality, augmented reality, geo-fencing, iBeacon technology, and new social platforms, among many others. At the same time, more traditional elements such as in-arena signage, television commercials, digital banner ads, intellectual property rights, and events remain crucial parts of most integrated marketing packages.  The concepts of applying math, facilitating dialogue through transparency, and tracking allowed Tyson to better describe and more effectively facilitate understanding of astrophysics and can be applied to the sports industry. In particular, developing models to predict the outcomes of sports sponsorship spend should be an integral part of a partnership analysis. The best way to build these models is to share exactly how sponsorships are measured and evaluated between buyers and sellers of corporate partnerships. This enables both sides to have shared language using data and formulate insights to create better, more comprehensive models. By having a digital platform that can track results throughout the course of season, buyers and sellers of sports sponsorship can measure whether predicted outcomes reflect the actual results. More importantly, adjustments can then be made to the sponsorship to ensure that the most value is being generated in a relationship.  In an increasingly complex sports sponsorship environment, data driven decision making can help industry professionals understand the value of their partnerships in a hurry. Applying principles of rocket science and astrophysics to the data science of sports should help make that happen.
BY ADAM GROSSMAN

Using Numbers As The Language of Sports Sponsorship

In a recent conversation with RadioLab co-hots Robert Krulwich, astrophysicist Neil Degrasse Tyson discussed how he broke down many challenging concepts in his new book Astrophysics for People in a Hurry. While understanding dark matter, quantum gravity, and electromagnetism may not happen “in a hurry” for most people, Tyson shares a critical insight that is potentially more digestible.

       How Collaboration Leads To Innovation      

 
   
     
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
     
   
      By Adam Grossman  Last week, FC Barcelona signed a “ collaboration agreement ” with Georgetown University to “explore possible avenues of cooperation within the framework of the Barça Innovation Hub.” Barcelona’s decision to explore this partnership provides an interesting new dynamic to a sports industry focused on innovation.  More specifically, teams in the United States including the Los Angeles Dodgers, Philadelphia 76ers, Dallas Cowboys, and Minnesota Vikings have established sports accelerators to spur innovation from startup companies. Barcelona, however, is one of the first teams to establish an innovation presence outside of its homemarket. In addition, the team decided to focus on an academic rather than commercial relationship to establish this presence.  The strategy behind establishing an innovation presence is clear. Barcelona has specifically been looking to grow its fan base and revenues in the United States. The team already has an  office  in New York City, has received approval for an expansion team in the National Women’s Soccer League for the 2018 season, and has developed six soccer academies in the U.S. Its new relationship with Georgetown will also further increase the visibility of its International Champions Cup match versus Manchester United in July in Washington D.C., where Georgetown is located.  The collaboration through Georgetown and its master's in Sports Industry Management program is potentially more interesting. Students in Masters of Sports Administration (MSA) programs are becoming increasingly interested in entrepreneurship. In particular, innovation in technology, including machine learning, artificial intelligence, virtual / augmented reality, wearable devices, and analytics provide many exciting opportunities for new companies. This is one reason I developed the “Entrepreneurship In Sports” class for  Northwestern University ; American University has a similar course.  At the same time, starting a company has significant risk. Some of the challenges include finding clients, developing products, securing financing, and hiring talent (among the many challenges). For many students in MSA programs, these hurdles make pursuing a new venture extremely difficult. Even the prospect of entering an accelerator program, where young companies exchange equity in exchange for financial capital and mentorship, does not always mitigate the opportunity cost of finding a more stable job. This means that teams could miss out on the benefits from the new products and services developed by emerging companies.  Barcelona’s relationship with Georgetown reduces this risk because it enables students to develop new ventures through its innovation while still in school. Because most MSA programs operate in a school of professional / continuing studies, students can keep their current jobs while pursuing new ventures. Students then have access to Barça Innovation Hub resources to help deal with the challenges of starting a company and potentially can turn one of the biggest sports organization into one of its first clients. In turn, the club is able  to  “innovate, generate, attract, manage and share knowledge.”  More specifically, Barcelona can incubate new ventures started by future industry leaders at a top MSA program and make investments in the most promising companies without having to commit financial capital.  Win-win is an overused cliché, particularly when applying it to a relationship in the sports industry. The collaboration between Barcelona and Georgetown, however, does perfectly represent a relationship in which both sides should generate significant value.
BY ADAM GROSSMAN

How Collaboration Leads To Innovation

Last week, FC Barcelona signed a “collaboration agreement” with Georgetown University to “explore possible avenues of cooperation within the framework of the Barça Innovation Hub.” Barcelona’s decision to explore this partnership provides an interesting new dynamic to a sports industry focused on innovation.

      Making the Most of Media Rights     

 
   
     
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
     
   
      By Ross Chumsky and Adam Grossman  Over-the-top distribution of sports content has dominated industry news over the past few weeks.  Amazon’s new NFL deal to stream Thursday Night Football,  Twitter’s new agreements  to stream live content from various leagues, and  ESPN ’s decision to lay off approximately 100 employees all have arguably been focused on the changing consumption patterns of sports fans.  The reason that distribution channels, rather than the sports content itself, have taken center stage is that most sports leagues already have long-term media rights deals in place in traditional channels.  For example, the NFL, NBA, and NHL all have television deals that extend into the 2020s.  There is one significant exception to this situation.  Last summer, the sports media agency, WME-IMG, purchased the UFC and its parent company Zuffa, LLC. for approximately $4 billion, the largest ever figure for the sale of a major sports franchise, by a significant margin (about $2 billion).  Much of the impetus for WME-IMGs massive investment stemmed from their expectation that they will be able to broaden the scope the UFCs media rights, both domestically and abroad.  With media rights fees skyrocketing throughout the sports world, WME-IMG is looking for the UFC to be the latest sports franchise to capitalize on this trend.  The UFC current media rights deal, signed in 2011 and expiring in 2018, has Fox Sports paying the UFC an annual average of $115 million. Since the deal was signed, the UFC has grown significantly in popularity.  In addition, the UFC “[is] appealing to media companies looking to grow their audience with the UFC’s fans, who are coveted by all networks because of their youth and passion.”  Prior to the UFC-Fox Sports deal’s 2018 expiration, Fox has an exclusive window, beginning in late 2017, for negotiation of a new deal.  In its next media rights deal, WME-IMG  reportedly  intends to set the price point at $450 million per year for ten years. While the $450 million per year figure would represent a 219% overall increase in annual media rights fees, it is below MLB’s current media rights deals with ESPN ($700 million annually) and Turner Sports/Fox ($850 million annually combined).  With more and more people eschewing traditional television in favor of digital streaming services such as Netflix and Hulu, media companies are searching for unique content to attract viewership and buck this trend. Live sports content continues to draw large viewership numbers facilitated the recent increase in sports media rights fees. WME-IMG is in a prime spot to negotiate a higher fee price because media rights for other major sports leagues being under contract and unavailable for the foreseeable future. Couple the increase in sports media rights fees of late with the UFCs building popularity, and the result is enviable negotiation leverage for WME-IMG. 
BY ROSS CHUMSKY AND ADAM GROSSMAN

Making the Most of Media Rights

Over-the-top distribution of sports content has dominated industry news over the past few weeks.  Amazon’s new NFL deal to stream Thursday Night Football, Twitter’s new agreements to stream live content from various leagues, and ESPN’s decision to lay off approximately 100 employees all have arguably been focused on the changing consumption patterns of sports fans.

       Tweaking Twitter Creates New Channel for Sports Content      

 
   
     
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
     
   
      By Adam Grossman  Twitter  recently announced  new or expanded content distribution deals with the NFL, WNBA, MLB, PGA Tour, and The Players Tribune. This includes having live games, highlights, pre / post game analysis, and Ask Me Anythings (AMAs) with athletes.  The deal with Twitter has been generating significant interest in the sports industry for two reasons. First, these deals continue to demonstrate the increasing importance of over-the-top (OTT) platforms in sports. Rather than focus solely on working with broadcast networks and / or cable / satellite providers, sports rights holders are placing increasing emphasis on distributing content through digital channels such as Twitter that go directly to consumers. Yet, these same leagues still generate the majority or at least a significant portion of their overall revenue through media rights deals with more traditional channels. The fact that these leagues are signing deals with Twitter given these dynamics demonstrates the changes that could be coming for sports content distribution in the near future.  Second, it is clear that Twitter is making a big bet on sports. The success of its original deal with the NFL (where it was able to stream 10 Thursday night games on the platform) has shown Twitter that having live sports content resonates with its users. In particular, younger demographics who spend significant amounts of time on the site tend to engage with Twitter during NFL games. Having content that can target younger, more lucrative demographics means that Twitter has more opportunities to grow its revenue at a time when the company has been struggling to monetize its audience.  Twitter’s investment in sports shows how sports sits at the intersection of two of the most important trends impacting media and entertainment. Finding unique content and using OTT platforms is something that the largest media companies in the world are encountering as some of their biggest strategic challenges.  The solution to this problem continues to be sports. Facebook, Amazon, Twitter, and more have continued to make significant investments in acquiring sports content for their platforms. This shows that, even as distribution channels continue to change, sports content will likely remain one of the most valuable assets companies can have.  
BY ADAM GROSSMAN

Tweaking Twitter Creates New Channel for Sports Content

Twitter recently announced new or expanded content distribution deals with the NFL, WNBA, MLB, PGA Tour, and The Players Tribune. This includes having live games, highlights, pre / post game analysis, and Ask Me Anythings (AMAs) with athletes.

      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.