Fortnite Helps Demonstrate The Value Of Potential Esports Partnerships   BY ADAM GROSSMAN     

 
   
     
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
     
   
      Earlier this week, Ashland University announced it would be  providing scholarships  to Fortnite players as a way to attract new talent to its esports team. Some questions that many people in the sports industry may have include:   What is Fortnite?  Why would Ashland University offer scholarships for people to play Fortnite?    The Guardian’s Keith Stuart  described Epic Games’ Fortnite as:   In short, it’s a mass online brawl where 100 players leap out of a plane on to a small island and then fight each other until only one is left. Hidden around the island are weapons and items, including crossbows, rifles and grenade launchers, and players must arm themselves while exploring the landscape and buildings. It’s also possible to collect resources that allow you to build structures where you can hide or defend yourself. As the match progresses, the playable area of land is continually reduced, so participants are forced closer and closer together. The last survivor is the winner.   Why would a university offer a scholarship based on this description of the game? We can actually use the Block Six Analytics (B6A)  Corporate Asset Valuation Model  to answer this question. When applying B6A’s analytics to valuing sponsorship, we define success based on two main criteria:   Return on investment – how does a company make money from a partnership  Return on objectives – how are a company’s brand and marketing goals addressed from a partnership   Evaluating the impact of an esports team on revenue should not begin or end with direct revenue. As we have discussed in our post on UMBC’s success in the  Men’s NCAA Basketball Tournament , colleges primarily make money through tuition. From a purely economic perspective, schools either want to have a higher number of students attend or charge a higher price for annual tuition. The more students that apply to the program, the more likely that the school will have both a higher number of students attend and the ability to charge higher tuition given the greater demand.  Ashland University faces strategic challenges in this context. In Ohio alone (where Ashland is located), the school competes with several public and private colleges and universities including The Ohio State University, The University of Cincinnati, Dayton University, and Xavier University. That does not even factor in the out-of-state options for students. How does Ashland put itself in the competitive set for students applying to colleges in this context?  Increasing brand awareness with the target demographic is the key strategic goal of having an esports team. More specifically, students have to know that Ashland could be a compelling option for their college education. That is where offering Fortnite as a scholarship comes into play. The earned media from the announcement alone from publishers including TechCrunch, Business Insider, Forbes, and Variety provides increases in brand awareness that Ashland would be unlikely to achieve otherwise.  Ashland’s Fortnite scholarship is not just increasing brand awareness in a vacuum. Ashland is specifically able to reach its target high school demographic of students that are considering applying to college. Relatively few people will actually make the schools esports team, but as esports head coach Josh Buchanan  said , “Fortnite appeals to both the core and casual gaming audience.”  The core and casual gaming audience has significant overlap with Ashland’s target demographic. The key here is Ashland using Fortnite to show why it is different from other universities and that it will have innovative activities that specifically appeal to its target demographic. Now many students have a compelling reason to apply and chose Ashland over some of its competitors.     Ashland’s Fortnite scholarship also demonstrates an approach to solving one of the biggest strategic challenges with esports. In particular, esports leagues, teams, and athletes (i.e. rights holders) want to attract non-endemic sponsors as corporate partners. Yet, companies not familiar with or who do not see a clear connection to esports have a difficult time making the investment.  Esports rights holders can use Ashland as an example of why companies should become partners. In particular, rights holders can show non-endemic sponsors how partnering with a team or league helps these companies generate more revenue or more effectively reach their brand objectives in novel ways that create competitive differentiation.   Each company generates revenue in different ways and has different brand goals. Understanding what those are and placing a potential partnership in this context provides esports rights holders with the best path to secure new sponsors.       
BY ADAM GROSSMAN

Fortnite Helps Demonstrate The Value Of Potential Esports Partnerships

Esports rights holders can use Ashland University as an example of why companies should become esports partners. In particular, rights holders can show non-endemic sponsors how partnering with a team or league helps these companies generate more revenue or more effectively reach their brand objectives in novel ways that create competitive differentiation. 

       PGA Takes Approach That Is Not Par For The Course   BY ADAM GROSSMAN     

 
   
     
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
     
   
      Earlier this week, the PGA Tour announced that it was changing its slogan from “These Guys Are Good” to “Live Under Par.” Changing one of the most prominent features of the PGA Tour brand after 20 years would be news on its own. What is potentially more interesting, however, is the thought process behind the change. According to  AdWeek ’s Robert Klara:   The most noticeable feature of the new campaign, developed with a creative assist from L.A.-based branding and marketing shop Troika, will be to augment the usual content that focuses solely on the technical aspects of play with content that includes softer and more personal elements such as the experiences of the fans who attend tournaments and the lives of the golfers when they’re not playing golf.   The “These Guys Are Good” slogan solely focuses on the players’ abilities and the PGA Tour had focused much of its brand strategy around this concept. The PGA Tour’s new insight is that winning, on-course performance, and “technical” skill is not the sole, or for a larger portion of fans, the primary driver in people’s interest in golfers. In fact, the data showed that the fans were identifying with the players as stars in addition to being successful athletes. As Klara  states , a “demographic the PGA Tour dubs ‘Sports Socialites’—and make up nearly a  quarter of golf’s viewers —are looking for far more social and interactive content (emphasis added).”  This is not the first time this year that the PGA Tour recognized that it needs to not be focused solely on athlete’s performance. Many have noted that ratings have increased  significantly  since Tiger Woods’ most recent return to playing in PGA Tour events. The PGA Tour recognized that it needed Woods to compete in order for the organization to maximize audience size and the revenue generated from media rights agreements.  In   The Sports Strategist: Developing Leaders for a High-Performance Industry  , my co-authors and I highlighted a strategy that the PGA Tour put in place specifically to address this issue. In 2011, the PGA Tour was able to secure a 33% increase in its media rights deal even though Woods was at the time in what my co-authors and I described as at his “competitive nadir,” having not consistently performed well since the 2009 season. How did the PGA Tour accomplish this? From  The Sports Strategist:    The PGA Tour’s critical insight was to ensure that its broadcast partners could sell their advertising inventory regardless of ratings fluctuations. The PGA Tour proactively gained commitments from sponsors to buy approximately 75% of the advertisements during tournament broadcasts. As, the chairman of CBS Sports, said about a new agreement, “It’s a close to a guarantee as you’re going to see in big-time sports  today .”    The PGA Tour’s new slogan, “Living Under Par,” is consistent with this type of strategic thinking. On course performance will always be a component of a player’s star power. The slogan’s “under par” component is a direct reference to the fact that golfers’ want to score as far under par as possible.  Changing the slogan shows the PGA Tour’s understanding that it needs to the look at the holistic value that players create. For example, golfers such as Jordan Spieth, Rickie Fowler, Justin Thomas, and Bubba Watson are top-ranked players but are also top athletes in trying to interact with fans particularly through social media. However, golfers such as Grayson Murray and Max Homa have struggled on the course but have succeeded by showcasing their personalities in  social media channels.  The PGA Tour recognized that it has an opportunity to take advantage of their golfers’ strengths off the course.  B6A’s products also take this holistic approach to asset valuation with our  Revenue Above Replacement (RAR)  model being a good example. To determine an athlete’s value to a team, league, or organization, we examine a player’s on-field, off-field, and personal performance. While on-field is an important component, it is not the only component of a player’s value. As the PGA Tour demonstrates, fans, media, and sponsors want to engage with athletes both on and off the course. This a consistent feature of virtually all athletes in all sports.  The PGA Tour has created an economic model where it can be successful even when its star golfers are not performing on the course while also taking advantage of these golfers' successes when they do happen. Its new slogan now more accurately reflects this strategic approach and enables the organization to better position its brand and monetize its success both on and off the course.   
BY ADAM GROSSMAN

PGA Takes Approach That Is Not Par For The Course

Earlier this week, the PGA Tour announced that it was changing its slogan from “These Guys Are Good” to “Live Under Par.” Changing one of the most prominent features of the PGA Tour brand after 20 years would be news on its own. What is potentially more interesting, however, is the thought process behind the change.

      Does Pay For Performance Make Sense For Sponsorship?  BY ADAM GROSSMAN     

 
   
     
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
     
   
       Yesterday, Anheuser-Busch announced a decision to    utilize    "a new sponsorship model that promises to shake up the industry. It is built on incentives for performance on the field, pitch or court, as well as off of it". In 2012, B6A explored a similar approach The Emirates Group employed with the Arsenal as part of a larger deal including a jersey sponsorship. That blog post is included below.    The Arsenal Football Club and The Emirates Group recently made news when the Dubai based airline  announced  there had incorporated performance-based clauses in its sponsorship agreement with the English Premiere League team. Emirates and Arsenal have a five-year contract that pays Arsenal £30 million ($48.6 million) in annual fees for partnership inventory including a jersey sponsorship. While Arsenal has qualified for the Champions League every season for the past eight years, it has not won a major title during this span (FA Premiere League, FA Cup, and UEFA Champions League). If the team fails to qualify for the Champions League or does not perform well in the Premiere League then, "There are certain clauses, from 2015, that we pay them a percentage less if they don't perform," Emirates SVP Boutros Boutros  said . "It's fair to us and fair to them."  On the surface, it does seem fair. Sports organizations should absolutely be held accountable for their performance with regards sponsorship agreements. The question is what the definition of performance. More importantly, does competitive performance always translate to a successful sponsorship?  The answer is both yes and no. A team should be evaluated on both the quantity and quality of the impressions it delivers to corporate partners through inventory items like jersey sponsorships.  Quantity of impressions is relatively easy to define. It is generally considered to be the number people who view, consume, or experience an inventory item. For a corporate partnership agreement, a team should estimate the total number of impressions for each inventory during the course of the year. It should be rewarded for exceeding this number and penalized for missing these estimates.  Quality of impressions, however, is more difficult to define. At Block Six Analytics, we define the quality of impressions by a sports organization’s ability to help its partners to increase revenue and meet sponsorship goals.  By increasing revenue, B6A recognizes that different types of impressions can generate differing amount of revenues. For example, arena / stadium signage likely does not have the same impact on new customer acquisition or customer attention as having a partner’s core customers attend a game in a luxury suite. It is not that the stadium / arena signage in not a valuable piece of partnerships inventory. It is that that the luxury suite is more valuable to the partner because it targets specific customers and creates in an environment that is more likely to generate revenue.  Not all partnerships, however, are about generating revenue. Therefore, it is critical to define what the sponsorship goals are for each partner. Enhancing brand perception through sponsoring a community’s professional, collegiate, or high school team has a higher priority for many partners than increasing revenue. Sports organizations can be evaluated for its ability to maximize this type of impressions as well.  The Emirates deal, and the fairness component of this deal, appears to focus more on the quantity of impressions. Most of the Champions League value comes from the media rights deals for tournament games. If Arsenal does not qualify for the Champions League then the team will not be able to broadcast its jersey sponsorship to the hundreds of millions of fans who watch the tournament each year. This will decrease the overall number of impressions. However, it is not clear how much it will decrease quality of impressions. Most of the impressions from a jersey sponsorship go towards increasing brand awareness to viewers watching television broadcasts. While these are valuable, these impressions may not be as valuable those that go directly to increasing customer acquisition and customer retention.  This goes to the heart of return on investment (ROI) calculations when it comes to sponsorship. Winning generally does help increase awareness and interest in a team or individual. This translates into increases in gameday attendance, television ratings, and unique visitors the organization’s websites. While this is good for the sports organization, corporate partners need to ensure that these new impressions actually generate profitable revenue growth or help meet sponsorship goals for their organizations. Simply generating a massive number of impressions can no longer be the standard used to evaluate partnership value. Books like Sasha Issenberg’s  The Victory Lab: The Secret Science of Winning Campaigns  shows how successful political campaigns use microtargeting to focus on the most valuable voters – people who can be persuaded vote for a specific candidate but only after being contacted by a campaign with a specific message.  This same logic should be applied to corporate partnerships. For example, Arsenal could provide Emirates with introduction to team fans or other sponsors that make enterprise purchasing decisions about corporate travel. This type of introduction could occur whether the team is losing or winning on the field. More importantly, this is the type of microtargeted impression that is much more likely to deliver increases revenue to the Emirates than if the team qualifies for the Champions League.       While usually aligned, winning in competition can mean something entirely different than winning with the corporate partnerships. It is definitely a good idea to hold sports organizations accountable for sponsorship spend. Partners need to ensure that they are holding sports organizations accountable in the right way.    
BY ADAM GROSSMAN

Does Pay For Performance Make Sense For Sponsorship?

Yesterday, Anheuser-Busch announced a decision to utilize "a new sponsorship model that promises to shake up the industry. It is built on incentives for performance on the field, pitch or court, as well as off of it". In 2012, B6A explored a similar approach The Emirates Group employed with the Arsenal as part of a larger deal including a jersey sponsorship. That blog post is included here. 

      UMBC Positioned to Take Advantage of March Madness Success  BY ADAM GROSSMAN     

 
   
     
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
     
   
      The biggest star of the 2018 NCAA Division I Men's Basketball Tournament so far is Zach Seidel. The University of Maryland Baltimore County (UMBC) director of multimedia communications for the athletic department is the man behind the Twitter account that has done everything from trolling CBS /  The Athletic reporter Seth Davis  and ESPN to espousing the virtues of UMBC to people who had not heard of the university prior to the school becoming the first 16 seed to upset a 1 seed in the history of the NCAA Tournament. Seidel’s ability to create a unique voice through real-time comedic Tweets generated interview requests from national media outlets – including The Athletic and ESPN.  Seidel, however, is “only” a star on the UMBC team. UMBC as an institution is the biggest winner of the NCAA Tournament so far, even more for what it has done off the court than on the court. More specifically, UMBC had positioned itself to take advantage of success if / when an upset in the NCAA Tournament happened.  The first step in understanding why this is so is understanding the full potential value of college athletics. For many schools, college athletics is a marketing asset that functions like a brand influencer. In particular, the reason that Seidel became a star is that conversations around varsity athletics can generate significant attention for schools in ways that professors, academic programs, or new research does not. That is why so many analyses of the value of UMBC’s upset are focused on the “ media value ” the school generated for the win.   Media value, however, is not likely UMBC’s ultimate goal. The school is attempting to use athletics in similar ways that corporate partners should be using sponsorship assets – to achieve discrete business goals. UMBC’s “business” is focused on recruiting as many bright students as possible to apply to the school for admission. For virtually every college or university, tuition is by far the biggest revenue driver for the school. Investments in athletics should have an impact in both the number of applicants that apply and the annual tuition a school can charge because it is more attractive.  Making investments in basketball, as UMBC has done, or in football can have a tangible impact on a school’s admissions. In particular, a school that has an upset does see a significant increase in admissions. According to a recent analysis of Department of Education Data from  Bloomberg :  Schools that beat performance expectations during March Madness receive a bump not only in public awareness, but also in the number of applications they receive. For example, as Bloomberg points out, after then-15th-seeded Florida Gulf Coast’s wild run through Georgetown and San Diego State to advance to the Sweet Sixteen of the 2013 tournament, applications to the Fort Myers, Florida, campus spiked 27.5 percent. A similar trend was observed at Lehigh University after it bounced perennial tournament contender and then-second-seeded Duke from the first round of the 2012 tournament. And it’s not just one shocking upset that results in more applications: If a team makes it further into March than expected—such as Wichita State’s surprising Final Four berth in 2013—it can also experience increased interest. Wichita State, for its part, received almost 30 percent more applications following its success on the court in 2013, Bloomberg reports.  This is not just the case in basketball. In his study of the “Flutie Effect”, Harvard Business School professor  Doug J. Chung  found  that :   When a school goes from being mediocre to being great on the football field, applications increase by 18.7%.  To attain similar effects, a school has to either decrease its tuition by 3.8% or increase the quality of its education by recruiting higher-quality faculty who are paid 5% more in the academic labor market.  Schools become more selective with athletic success. For a mid-level school, in terms of average SAT scores, the admissions rate improves by 5.1% with high-level athletic success.  Surprisingly, students with high SAT scores are also significantly affected by athletic success.   UMBC appears to have applied these types of lessons to its commitments to athletics. As Seidel humorously stated in a  Tweet , ” BTW guys, we have a brand new $85 million Event Center we opened up last month that still doesn't have a corporate sponsor name.... (sic) .”  UMBC is in a better position now to obtain a sponsor after its historic upset. However, the decision to make this type of investment into an Event Center shows the importance the school placed on sports and events long before its upset occurred. It also positions the school for longer-term success in admissions by making this type of investment in athletics.  UMBC should also take this point-of-view when looking for corporate partners for its new venue. Rather than just examining the media value of its basketball team, the school should look at the core business of potential corporate partners. For example, Seidel’s efforts increased the school’s Twitter followers from 5,500 to 109,000 followers over the course of the Retrievers run through the NCAA Tournament. The University of Maryland has 149,000 followers. If partners are only looking at audience size then the Terps are still a significantly better spend than the Retrievers.  UMBC should focus on why the quality of its audience can help potential corporate partners achieve their revenue and marketing goals. For example, UMBC can now make a compelling argument to Adidas about why the apparel brand should be the naming rights partner for the Event Center. Seidel’s social media activity has helped to define a UMBC brand in-line with  Adidas ’ “three clear strategic choices that we want to focus on: Speed, Cities and Open Source.” In addition, Under Armour (one of Adidas’ biggest competitors) has made significant investments in the University of Maryland’s athletic department. Adidas’ sponsorship of the UMBC Event Center would enable the company to directly compete with Under Armour in the county and state where Under Armour is headquartered.  Schools do not need to make $85 million investments to achieve success. In   The Sports Strategist: Developing Leaders for a High-Performance Industry  , my co-authors and I highlight the University of Chicago. The Maroons was an original member of the Big Ten athletic conference and home of the first Heisman Trophy winner. However, the school decided to end college athletics in 1939 so that it could make sure its students and the institution could focus on academics.  The decision contributed significantly to the school earning the reputation of the  place  “where fun goes to die.” While the school re-instituted its  college football program  in 1969, it only more recently made the team a priority to show that the college experience was more than solely the academic experience. The school saw a rise in applications after making a more public face of the out-of-class offerings Chicago provides its students.  UMBC was the winner of the opening weekend of the NCAA Tournament. However, the school’s investments in athletics should pay long-term dividends in helping the school take advantage of this success.   
BY ADAM GROSSMAN

UMBC Positioned to Take Advantage of March Madness Success

The biggest star of the 2018 NCAA Division I Men's Basketball Tournament so far is Zach Seidel. Seidel, however, is not the “only” a star on the UMBC team. UMBC as an institution is the biggest winner of the NCAA Tournament so far, even more for what it has done off the court than on the court.

       B6A Announces The Creation Of Its NBA Jersey Patch Index   BY ADAM GROSSMAN AND BEN SCIAMBI     

 
   
     
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
     
   
      Block Six Analytics (B6A) is pleased to announce the creation of the NBA Jersey Patch Index (JPI). The JPI uses B6A’s Media Analysis Platform (MAP) image valuation capabilities within its Social Sentiment Analysis Platform (SAP) to analyze the earned value of posts that feature a team’s jersey patch in pictures or videos for the 2017-18 season on Instagram for the following accounts:   ESPN  Bleacher Report  House of Highlights  NBA   SportsCenter      

  

  	
       
      
         
          
             
                  
             
          

          
           
              A sample of B6A's Jersey Patch Index (JPI).  
           
          

         
      
       
    

  


     This includes complete image analysis of every post in these accounts. Image analysis includes the following metrics:   Impressions - The number of people that have seen the jersey patch.  Centricity - How close the jersey patch is to the four points at the center of the screen where the eye is most likely to see an image when it is visible to viewers.  Prevalence - The percentage of the screen containing the jersey patch when it is visible to viewers.  Time - The length of time that the jersey patch is visible to viewers. This applies to video posts only.  Scale Factor – How good of a fit the jersey patch partnership is for a company based on its specific revenue and marketing goals.      The B6A JPI top five earned value performers year-to-date in the NBA are:   Cleveland Cavaliers - $3.76 million  Golden State Warriors - $2.02 million  Boston Celtics - $1.73 million  Los Angeles Lakers - $1.30 million  Philadelphia 76ers – $1.21 million   The primary insight to be gained is the overall value and the number of impressions that many teams are generating on social media through jersey patch posts when taking a holistic view of social media conversation. More specifically, it is necessary to move beyond team and partner owned accounts to understand the total value generated from a partnership. In addition, the values attributable to social media exposure often significantly exceed the value generated by linear television live broadcasts.  One example was the 11/3 Cavaliers vs. Wizards game which had 1,757,000 million viewers on ESPN. For the 5 accounts we tracked, highlights of the game with the jersey patch exposure exceeded 20 million total video views, and averaged 1,576,000 views per video. Three separate videos from the 5 accounts we tracked had viewership higher than the actual telecast on ESPN. The Goodyear logo was on screen for 162 seconds and generated over $367 thousand for Goodyear during this game alone.  “The JPI shows the importance of image analysis in social media,” B6A CEO Adam Grossman said. “Teams and their partners also need to examine the larger social media universe to determine the full value generated by these relationships.”  A good example of the value that has been created via jersey patch sponsorship is seen through the Milwaukee Bucks partnership with Harley Davidson during the 2017-18 season. The NBA’s Instagram account (rather than the Bucks’ Instagram account), generated nearly half of the total value and ranked 4th in the NBA. In addition, Giannis Antetokounmpo has provided $660 thousand (out of a total of $960 thousand) in value making him the 5th highest for players in the NBA. He has also been featured in 125 out of 167 posts about the Bucks/Harley-Davidson (3rd most posts in the NBA).  Antetokounmpo shows the value of star power in generating jersey patch value for teams and partners. Former teammates Lebron James and Kyrie Irving lead the way as the most valuable players for jersey patch partners generating $2.73 million and $1.18 million in value for Goodyear and GE, respectively.  Narratives also can play an important role in generating value for partners. Since his return to Miami on Feb. 9th, Dwayne Wade is 2nd only to James in value across the entire NBA. Miami ranks 4th in total value from since Wade’s return.  Winning is also not a requirement for jersey patch success. The Lakers and Wish rank 4th in overall value, with posts featuring the patch averaging the 2nd highest engagement rate (ratio of engagements to followers). Lonzo Ball ranks 7th across the NBA in patch value, being featured in 81 posts and generating over $638 thousand in value for Wish.  These insights demonstrate the importance of looking at the larger social media conversation and comprehensive image analysis when evaluating jersey patch values. Even when limiting analysis to targeted Instagram accounts, teams are generating significant dollars for their partners. B6A’s SAP can complete valuations in Twitter, Facebook, and Instagram as well as analyze text and image posts in these channels. The value will only continue to grow throughout the season and when more social media accounts are factored into the analysis.  Contact  B6A  for access to the JPI or for B6A to complete a full, cross-channel analysis for your brand or team.   About Block Six Analytics   B6A's analytics-fueled technology enables companies to maximize ROI on their corporate partnership and player investments across all on-field and off-field channels. Sports properties, agencies and brands are using B6A's platform to create a truly interactive experience focused on delivering sponsorship value. Our machine learning technology helps our clients generate incremental revenue growth and reduce reporting costs. We use our technology and analytics to determine the value of television viewable billboards, signage, and calls-to-action, and social media conversations. By having a fully transparent valuation model that is built for specific companies for specific partnership opportunities, B6A ensures that buyers and sellers of sports sponsorship have the information they need to make the best data-driven decisions for their organizations.
BY ADAM GROSSMAN AND BEN SCIAMBI

B6A Announces The Creation Of Its NBA Jersey Patch Index

Block Six Analytics (B6A) is pleased to announce the creation of the NBA Jersey Patch Index (JPI). The JPI uses B6A’s Media Analysis Platform (MAP) image valuation capabilities within its Social Sentiment Analysis Platform (SAP) to analyze the earned value of posts that feature a team’s jersey patch in pictures or videos for the 2017-18 season

       Tokyo 2020 Already Secures Record Olympic Sponsorship Revenue In 2018   BY ADAM GROSSMAN     

 
   
     
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
     
   
      Olympic records are being set, but not just in Pyeongchang. It may be difficult to think about the 2020 Summer Olympics while the 2018 Winter Olympics are still happening, but the International Olympic Committee (IOC)  stated  that 2020 host city Tokyo has already secured almost $3 billion in sponsorship deals.   To put these record revenues in context, both London and Rio de Janeiro generated approximately $1.1 billion in sponsorship revenue for the Olympics in their cities. This also comes shortly after companies such as McDonald’s, AT&T, and Citigroup recently ended high profile agreements with the IOC  because of  “rising Olympics sponsorship costs and declining TV ratings.”  How could Tokyo be generating record revenues when trends at both the host city level and the international level seem to be against this outcome? We can start by looking at the host city analysis.  According to John Coates , the head of the IOC’s Tokyo Games Coordination Commission, “Forty-three domestic sponsorship deals signed by Tokyo organizers so far had exceeded expectations” in 2017. That number has now increased to  47 partnerships in 2018 .  What is behind Tokyo’s success? Japan is the home to many multi-national companies that are Worldwide Olympic Partners including Toyota and Panasonic. However, Tokyo also appears to be working with companies to maximize their fit with an Olympic partnership. In particular, the Olympics are typically an extremely strong platform for companies to increase brand awareness to an international audience for new product offerings.  That is what Tokyo appears to be stressing in its deals. For example,  Nippon Oil & Energy  Corporation will “provide oil, gas and electricity supply services for the Tokyo 2020 Games.” However, the company is also focused on using the Olympics as a platform to showcase a new product.  More specifically , “Through the supply of  hydrogen energy, for which demand is expected to increase for the Tokyo 2020 Games , we are contributing to the expanded use of new types of energy (emphasis added).” Nippon, through its ENEOS products, is using the Olympics as a platform to showcase the value of its new product to a global audience.  Mizuho Financial Group is an example of a Gold Partner that can use the Olympics to generate global brand awareness for its company. Mizuho is a company headquartered in Japan but has a listing on the New York Stock Exchange (NYSE). Mizuho is using the Olympics  in part to  “[stimulate] the Japanese economy to enable it to meet the demands of people from around the world who will be gathering in Tokyo and Japan for the Games.” Mizuho is using a local mission to create a worldwide platform to engage with a worldwide customer base important for its future growth as a company.    Mizuho’s partnership also demonstrates another interesting element of Tokyo’s approach. One of Mizuho’s competitors, Sumitomo Mitsui Financial Group Inc., has also signed on to be an Olympic partner. Tokyo is one of the first Olympics (with the IOC’s support).  to allow multiple companies to become in the same category.  Having the ability to maximize partnership revenue through non-exclusivity is important to the Japanese organizing committee. Yoshiro Mori, a former Japanese prime minister and president of the committee,  stated  “We’re making an effort to reduce the burden on the city of Tokyo as much as possible.” The country had a clear goal to limit cost overruns and make the Olympics as fiscally sound as possible. Taking part in the  opportunity to  “build the world’s most efficient financial infrastructure” is a good fit for Mizuho’s brand goals and makes lack of exclusivity less important to the company.  It is not just Tokyo, however, that has seen a boost in sponsorship deals. For companies like McDonald’s with near-global ubiquity for many of its core products, renewing an Olympic sponsorship does not make as much sense.  Intel, however, is using the 2018 Olympics to  feature its Virtual Reality  (VR) product offerings in its “biggest production experience that we have delivered to date”. This includes distributing 30 events in 360-degree videos to 10 broadcast partners around the world. Virtual Reality is a new product offering for which the Olympics provides a great platform to showcase new capabilities. The ability to broadcast and consume games in VR in 2018 and 2020 (and beyond) makes the Olympics a good sponsorship fit for Intel and shows the importance of fit in increasing sponsorship revenue.
BY ADAM GROSSMAN

Tokyo 2020 Already Secures Record Olympic Sponsorship Revenue In 2018

Olympic records are being set, but not just in Pyeongchang. It may be difficult to think about the 2020 Summer Olympics while the 2018 Winter Olympics are still happening, but the International Olympic Committee (IOC) stated that 2020 host city Tokyo has already secured almost $3 billion in sponsorship deals. 

       Brady, Smith Generate Highest Percentage Of Wins For Their NFL Teams   BY ADAM GROSSMAN & ROSS CHUMSKY     

 
   
     
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
     
   
      Update – The trade reported yesterday of Kansas City Chiefs QB Alex Smith to the Washington Redskins is a good example of how to use our new winning metric. As part of this deal, it is likely that the Redskins will not re-sign QB Kirk Cousins, trade cornerback Kendall Fuller to the Chiefs, and trade a third round draft pick in the 2018 draft to the Chiefs. The Redskins will receive a 2019 third round compensatory pick when another team signs Cousins. Our analysis of the 2017 season shows that Smith generated a 1.67 wins while Cousins and Fuller combined generated 1.14 wins. This demonstrates that Redskins will receive more wins from these transactions if Alex Smith performs at or near his 2017 performance while Cousins remains at or near his 2017 performance. For the Chiefs, providing the opportunity for Patrick Mahomes to become its starting QB at a lower salary may mean fewer wins in the short-term but at a lower cost than keeping Smith  -----------------------------------------------------------------------------------------------------------------------------  What NFL player has the most impact on his team? It is common question, and unlike baseball and basketball, football does not have a consensus, baseline advanced analytic metric to rate players. More specifically, Wins Above Replacement (WAR) is typically used in baseball and Player Efficiency Rating (PER) is typically used in basketball. The idea behind both metrics is to quantify an individual player’s impact on winning above a minimal level of performance. With WAR, for example, a player’s overall contribution is essentially based on how many runs he created and how many runs he prevented as compared to a Triple-A player in the same position.  The reason that it has been more difficult to create this type of metric for football is that the sport relies on the performance of multiple team members on every play. This complexity makes it difficult to identify an individual player’s contribution. For example, the typical successful passing play requires an offensive line to protect a quarterback from a sack, a quarterback to throw the ball, and a wide receiver to catch the pass. Who deserves the most credit if the play is executed successfully?  In the process of creating the  Revenue Above Replacement (RAR ) for the NFL for this season, our team at Block Six Analytics (B6A) identified the need to create a version of this on-field metric. RAR examines how an individual player generates revenue for a team based on his on field, off field, and personal performance. In the past, we relied on WAR or PER to create our models for the MLB and NBA, respectively.  To solve this problem for football, we used multiple data sets and multi-factor regression analysis. We were able to determine two main attributes that accounted for wins. In essence, these factors are how well (Grade) and how much (Snaps) did a player perform during the 2017 season.     

  

  	
       
      
         
          
             
                  
             
          

          

         
      
       
    

  


     We found that these two factors identified how many yards over a replacement level player each player contributed to his team (the equivalent of how many runs were created in baseball). We found that summing each individual player’s yards contribution for a team in conjunction with regressing a team’s total wins provided a strong and statistically significant descriptive “winning” statistic.      

  

  	
       
      
         
          
             
                  
             
          

          

         
      
       
    

  


      We were also able to attribute yards to every single football player in the NFL this season.  The top-15 players in our analysis are in Table Two. The first area of focus is PlayerWin%. This describes how much that player contributes to a team’s win over a replacement level player (in football think an undrafted free agent) with a 100% meaning the player accounts for all of a team’s wins. Unsurprisingly, Tom Brady leads the NFL in PlayerWin% with the Patriots quarterback accounting for 18.04% of team’s wins. What else is likely not surprising is that quarterbacks makeup all of the top-10 and 11 of the top-15 players in this rating.     

  

  	
       
      
         
          
             
                  
             
          

          

         
      
       
    

  


     What is likely more surprising is that Kansas City Chiefs quarterback Alex Smith had the second highest PlayerWin%. How valuable is he? Let’s examine the fbWAR, ExpectedWin% and WinDelta columns. fbWAR calculates the wins a player adds over a sixteen game schedule (fb stands for football in our metric). ExpectedWin% looks at what percent of a team’s wins a player should contribute on an average team. WinDelta looks as the differences between the PlayerWin% and the ExpectedWin%. A positive number means the player is more valuable to that team than to the average team. A negative value means a player is less valuable to the team than the average team.  Not only did Smith have a Pro Bowl year, he is particularly valuable to the Chiefs because he had the highest WinDelta of any player in the analysis. His PlayerWin% is so high because the Chiefs as a whole have fewer players that contribute wins above a replacement level player. In our model, the Chiefs were expected to win 7 games (as seen in Table One) given the performance of the players on its roster (meaning the team won more game that would be expected given the talent on its roster). As a contrast, Brady has a  negative  WinDelta meaning he would be even  more valuable  on a different team than he was to the Patriots.  The three Panthers players followed the same pattern. These players are more valuable to the Panthers than to other teams because the Panthers had an even lower win contribution from its players than the Chiefs. The Panthers were also expected to win 7 games given the performance of its players (and actually won 11).     

  

  	
       
      
         
          
             
                  
             
          

          

         
      
       
    

  


     What if you wanted to see a player’s contribution overall (not measured to a specific team)? Table Three sorts players by fbWar instead of PlayerWin%. Once again, Brady leads the way in this metric meaning he generated the most wins and the highest contribution of his teams win total. However, Smith drops to 9th in this analysis. Two other players of note are Jimmy Garopplo and Alvin Kamara. Garoppolo ranked 13th overall even though he only played in five games. Had he performed in this same way over a 16 game season then he would have surpassed Brady on this list. Kamara also had relatively few plays this year as compared to other skilled position players (running backs, wide receivers, and tight ends) yet still finished as the highest non-QB on this list.  Why have we not called Brady the Most Valuable Player? We mentioned that we originally completed this analysis as part of our RAR model. Our approach looks at players’ contributions on and off field. Our next blog post will have the completed RAR analysis where we can determine the overall value of each player. In terms of wins generated, however, Brady is the highest performing player. 
BY ADAM GROSSMAN & ROSS CHUMSKY

Brady, Smith Generate Highest Percentage Of Wins For Their NFL Teams

In the process of creating the Revenue Above Replacement (RAR) for the NFL for this season, our team at Block Six Analytics (B6A) identified the need to create a version of this on-field metric. RAR examines how an individual player generates revenue for a team based on his on field, off field, and personal performance. In the past, we relied on WAR or PER to create our models for the MLB and NBA, respectively.

To solve this problem for football, we used multiple data sets and multi-factor regression analysis. We were able to determine two main attributes that accounted for wins. In essence, these factors are how well (Grade) and how much (Snaps) did a player perform during the 2017 season.

       How Super Success Occurs In Super Bowl Advertising   BY ADAM GROSSMAN     

 
   
     
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
     
   
      Do Super Bowl television commercials work? It is the five-million dollar question facing companies looking to purchase advertising inventory during America’s most watched television event coming up on Feb. 4th. More specifically, do Super Bowl advertisements lead to incremental revenue growth?   There have been several attempts to analyze the impact of Super Bowl advertising. However, confounding variables have been the primary issues in determining a clear ROI. In particular, it is difficult to isolate the Super Bowl ad itself as the catalyst for new sales when factors such as national advertising, local advertising, new product introductions, and spikes in sales overall could impact revenue.  The authors of the journal article  "Super Bowl Ads"  in  Marketing Science  found a compelling approach to address these issues. These professors from Stanford and Humboldt University found there was significant variance in television ratings in different markets depending on which teams played. In particular, there were increases in viewership based on if local teams to a geography were playing and/or if 3-5+% of Facebook likes came from certain geography. For example, if 3-5% of fans in the Los Angeles DMA like the New England Patriots on Facebook then this becomes a “local” Patriots market. If Super Bowl ads were effective then there should be increases in revenue when there is an increase in viewership.  This enabled the authors to isolate the impact of the television ads while controlling for the cofounding variables that usually impact this type of analysis (for more information click on the “Super Bowl Ads” link at the top of the previous paragraph). They completed a five-year analysis of the impact of television advertising on the increase sales volume and increase in revenues for beer and beverage brands before and after the Super Bowl.  The study focused on the impacts of Budweiser, PepsiCo, and Coca-Cola advertising during the Super Bowl, and the findings were:   Budweiser and Pepsi saw a statistically significant increase in sales in the week prior to the Super Bowl occurring where Coke saw a decrease in sales. The authors hypothesize that Pepsi generates the increase because customers identify Pepsi as the official sponsor and therefore associated the company's products with the Super Bowl. Coke is not seen in this light and therefore is not associated with the event in the same way.    Budweiser and Pepsi saw a statistically significant increase in sales in the 8-weeks following the Super Bowl but only when it was the sole or primary advertiser. When both Pepsi & Coke advertise in the Super Bowl in the same year, the impact of advertising on sales disappears.   Budweiser and Pepsi saw a statistically significant increase in sales around the NCAA Tournament but only when it was the sole or primary advertiser during the Super Bowl. When both Pepsi & Coke advertise in the Super Bowl in the same year, the impact of advertising disappears on sales in a similar way as it does post Super Bowl.    The main takeaways, however, are that Budweiser and Pepsi do see a significant return on investment with the Super Bowl and it should do everything possible to "own" the event. The effects seem to resonate many weeks after the Super Bowl but mostly around other sporting events. More specifically, customers seem to associate Pepsi with sports after the Super Bowl occurs with sales increases post Super Bowl around sporting events like the NCAA Tournament.   In fact, the researchers may have underestimated the impact because they did not have access to all purchasing data in all markets including access to sales from Walmart. Even without Walmart data, the authors determined that Budweiser generated $45 million in direct revenue from its Super Bowl advertising with PepsiCo achieving similar results.    The study is definitely not perfect in large part because the analysis was only from 2006-2011. In addition, it also only focused on beverage brands that have a primarily business to consumer / retail strategy. It is unclear that companies in other industries or companies that focus on enterprise or business clients rather than individual customers would see similar results. The authors do identify these as areas for future analysis.      Block Six Analytics (B6A) does conduct this type of analysis when looking at ROI of sponsorship spend. Our  Corporate Asset Valuation Model  examines partnership spend to determine the expected and actual incremental revenue growth. Rather than only looking at television advertising, we look at in-venue, digital, social, IP, event, and hospitality to determine a clear ROI for spend in different channels across different major sporting events.  There is no question that Super Bowl commercials are expensive. However, there is clear evidence that answers the question of whether these commercials can generate significant ROI for companies when used in the right way.   
BY ADAM GROSSMAN

How Super Success Occurs In Super Bowl Advertising

Do Super Bowl television commercials work? It is the five-million dollar question facing companies looking to purchase advertising inventory during America’s most watched television event coming up on Feb. 4th. More specifically, do Super Bowl advertisements lead to incremental revenue growth? 

       Determining the Value of Brandwatch’s Football Sponsorship Analysis      

 
   
     
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
     
   
      In a post titled “Which Football Sponsors Get The Best ROI?,”  Brandwatch  examined the value created by kit (or jersey) partners over the past year on Twitter and Instagram. Not only did it look at the number of images produced, Brandwatch also created an ROI index that looked at the cost per image for soccer teams for Nike, Adidas, Puma, and Under Armour. More specifically, this analysis “divided the total images each sponsor received by the amount paid for their sponsorship.”  The analysis had two findings that may be surprising to most soccer fans. First, Leicester and Paris Saint Germain (PSG) returned the highest value on a cost per image basis. In  addition , “Puma performs incredibly in this analysis.” Puma’s £13.62 per image is far lower than Nike’s £43.53 per image. Given that Adidas pays only £8.45 per image, “Nike struggles to generate the same ROI as its rivals.”  Unfortunately for Leicester, PSG and Puma, there are several reasons why Manchester United and Nike are likely not too worried about this analysis. To start with, the cost per image metric needs further examination because of the way in which Brandwatch calculates cost. In particular, it is not clear why Brandwatch examines the entire cost of the partnership while only looking at one channel for its ROI analysis (social media focused solely on Twitter and Instagram). There is an argument to be made that companies should be focused on social media for activation of jersey deals. However, many deals now are focused on television viewable signage in video and not static images in social media. Maximizing time on screen for broadcast video is typically the goal of partners with these deals.  In addition, the analysis seems to lack standard image metrics when considering value. In particular, it omits prevalence (how much of the screen does an image take up), centricity (how close the image is to the center of the screen), and confidence (how clear is the image on screen). If an image is small or not in the center of the screen, then it is less likely that a person will be able to identify the logo.  The cost per image has another methodological flaw – it is only looking at the quantity of the images posted rather than the quality of posts with those images. Nike, Adidas, Under Armour, and Puma (the brands featured in this analysis) each have different goals for their sponsorships. For example, having a static image of a company’s logo can be a good way to increase brand awareness. The more images there are, the higher the likelihood that someone will see the brand. Nike arguably has near universal brand awareness while Puma is not at Nike’s level. While Puma is generating value from its jersey partnerships for this reason, Nike should not be looking at this metric in the same way given its business goals.   In addition, Adidas has taken market share from Nike, in large part, by becoming the “ coolest brand in sports ”. Does the quantity of images help Nike address this issue or is the context in which those images appear more important? Looking at the sentiment of posts would be a critical part of Nike’s analysis to determine if people are saying positive or negative things about the brand.  Finally, all of these brands would be looking at engagement metrics to determine whether people are interacting with these visual posts. More specifically, if no one is liking, sharing, retweeting, or commenting on posts then it is likely that the audience is not engaged with the content. The number of images is often less important than having engaging content consumed by a company’s targeted demographics.  The Block Six Analytics  Social Sentiment Analysis Platform (SAP ) conducts jersey analysis by looking at the quantity, quality, and engagement of social media content. Our technology can identify which posts have company logos and determine the engagement of those posts. We also examine the value of those posts by looking at the specific revenue and marketing goals of a company to determine how value is being created. We then use our Media Analysis Platform (MAP) to examine the ROI in live television, highlights, and digital channels to examine how video content featuring a company’s logo creates value.     

  

  	
       
      
         
          
             
                  
             
          

          

         
      
       
    

  


     To its credit, Brandwatch did uncover valuable insights. In particular, Puma’s unique placement (as compared to other jersey partners) on the sleeve of a jersey (instead of on the chest) did enable the company to maximize the number of photos containing its logo. However, the other issues make Brandwatch's conclusions difficult to substantiate. B6A’s cross-channel, company-specific approach directly addresses the challenges with this Brandwatch analysis.  
BY ADAM GROSSMAN

Determining the Value of Brandwatch’s Football Sponsorship Analysis

In a post titled “Which Football Sponsors Get The Best ROI?,” Brandwatch examined the value created by kit (or jersey) partners over the past year on Twitter and Instagram. Its primary methodological flaw is that is only looking at the quantity of the images posted rather than the quality of posts with those images

       David Falk Joins Block Six Analytics Advisory Board      

 
   
     
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
     
   
      Block Six Analytics (B6A) is excited to announce that David Falk has joined its Advisory Board after making an investment in the company. Falk will now take a leadership role in growing the company’s sports corporate partnership and player valuation offerings.  Falk joins B6A after having spent more than 40 years in the sports industry, primarily focused on being the leading National Basketball Association (NBA) player agent. Falk has represented over 100 players including Michael Jordan, Patrick Ewing, Dominque Wilkens, John Stockton, Danny Ferry, Elton Brand, and Otto Porter. He has negotiated hundreds of millions of dollars in player contracts and most famously secured Michael Jordan’s endorsement deals with Nike, Gatorade, McDonald's, Sara Lee, Wilson Sporting Goods, Rayovac, and Wheaties. Falk was also an Executive Producer for the movie  Space Jam  starring Jordan .  He sold FAME, the agency he founded, in 1998 for $100 million to SFX and re-launched FAME in 2007. He also has experience with investing in and helping grow multiple startup ventures.   “I am very happy to be joining the B6A team,” Falk said. “This partnership provides me with the unique opportunity to leverage my experience and industry relationships in direct ways to have an immediate and substantial impact on the growth of the company.”  David Falk will take a leadership role in developing and monetizing multiple products within B6A’s Partnership Scoreboard software as a service platform. This includes enhancing its Revenue Above Replacement (RAR) model that examines how an individual player generates revenue for a team based on his or her on court, off court, and personal performance. In addition, Falk will further help develop the company’s sales, marketing, and pricing strategies for its Media Analysis Platform (MAP) and Social Sentiment Analysis Platform (SAP). These artificial intelligence products measure the value of corporate partnerships in near real-time for both the buyers and sellers of sports sponsorships.  “David taking a significant role in B6A is a great example of how much industry leaders believe in the company’s future success,” CEO & Founder Adam Grossman said. “His experience, relationships, and insights will be a catalyst for the company to become the industry leader in partnership and player valuation.”  Falk also endowed the David B. Falk College of Sport and Human Dynamics and its Sport Management degree program at Syracuse University. It is the first college in the U.S. to award a degree in analytics. Students from the program will be able to obtain real world experience by completing internships and class projects with B6A.  For more information please contact B6A at  info@blocksixanalytics.com .   About Block Six Analytics    B6A's analytics-fueled technology enables companies to maximize ROI on their corporate partnership and player investments across all on field an off field channels. Sports properties, agencies and brands are using B6A's platform to create a truly interactive experience focused on delivering sponsorship value. Our machine learning technology helps our clients generate incremental revenue growth and reduce reporting costs. We use our technology and analytics to determine the value of television viewable billboards, signage, and calls-to-action, and social media conversations.   By having a fully transparent valuation model that is built for specific companies for specific partnership opportunities, B6A ensures that buyers and sellers of sports sponsorship have the information they need to make the best data-driven decisions for their organizations.
BY BLOCK SIX ANALYTICS

David Falk Joins Block Six Analytics Advisory Board

Block Six Analytics (B6A) is excited to announce that David Falk has joined its Advisory Board after making an investment in the company. Falk will now take a leadership role in growing the company’s sports corporate partnership and player valuation offerings.

       WHAT CYBER MONDAY RECORD SALES MEANS FOR SPORTS ORGANIZATIONS   BY ADAM GROSSMAN & ROSS CHUMSKY     

 
   
     
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
     
   
      Houston Astros second baseman Jose Altuve won the American League MVP Award this year while posting the highest batting average in the sport and leading his team to its first World Series title in franchise history. But from an economic standpoint, baseball’s most valuable player is Aaron Judge, who finished second to Altuve in MVP voting. Judge drives the most revenue for his team according to the Revenue Above Replacement (RAR) model developed by my firm Block Six Analytics (B6A).  Revenue Above Replacement examines how an individual player generates revenue for a team based on his on-field, off-field and personal performance:   On-field performance examines the impact of winning on a team's ability to generate revenue and the player's individual contribution to winning using WAR.  Off-field performance examines how a player’s star power drives ticket sales, television ratings, social media engagement, partnership agreements and merchandise purchases.  Personal performance looks at a player's ability to generate earned media time that increases a team's exposure to its fans in the channels in which they are most likely to consume content.   B6A applied its RAR model to the  NFL  and  NBA  in the past, but MLB results differ because of the way teams generate revenue in baseball. More specifically, the most important revenue stream for MLB teams is usually the local media rights deal with a regional sports network (RSNs) while NFL and NBA teams generally receive more revenue from their league’s national and international media rights deals.  That is one key reason that Judge is so valuable to the Yankees. As part of the Yankees deal to sell YES to  News Corp : “The club got $85 million in fees from YES for [2012], and the sale includes a 5 percent increase  annually  in that rate for 30 years.” Given that the team generates so much money from its television deal, YES Network needs strong ratings to maintain its carriage fees (the price it charges cable and satellite networks to carry the channel) and sell advertising.  Star power plays a big role in driving people to watch games, and there was no bigger star in baseball last year than Judge. However, that is not just because he had one of the most dominant seasons for a rookie in MLB history on the field. Judge generated $145.1 million in RAR for the Yankees in 2017 with $97.5 million of his value based on his off-field and personal performance. Factors driving this number include Judge jerseys as the  best-sellers in MLB  this year (and most ever for a rookie), a  highly engaged  fan base on social media and the highest amount of earned media exposure of any player in baseball.  Even better for the Yankees, Judge generated his $145 million in RAR for the Bronx Bombers for the rookie minimum salary of $544,500. Judge is not the only star that drove significant value for his team. The top-ten players in RAR are detailed in the table below.     

  

  	
       
      
         
          
             
                  
             
          

          
           
              Top-ten RAR players for 2017.  
           
          

         
      
       
    

  


     One notable absence is the Miami Marlin’s Giancarlo Stanton, who hit 59 home runs and won the National League MVP. Stanton has been the featured star in many reports about the annual MLB  winter meetings , which take place next week and mark the “unofficial beginning for teams to make their big moves.” Stanton generated $33.2 million in RAR value for the Marlins.  While this is a significant amount, it is likely Stanton would be more valuable on a team that could maximize his star power in similar ways to what the Yankees have done with Judge. B6A’s RAR model actually quantifies this impact because it is able to demonstrate the value that each player has for a specific team. Understanding the economic impact that each player has on each team should be an important part of the free agent conversation this winter.
BY ADAM GROSSMAN & ROSS CHUMSKY

Aaron Judge, Mike Trout Rank As The Most Valuable Players In Baseball

Houston Astros second baseman Jose Altuve won the American League MVP Award this year while posting the highest batting average in the sport and leading his team to its first World Series title in franchise history. But from an economic standpoint, baseball’s most valuable player is Aaron Judge, who finished second to Altuve in MVP voting. Judge drives the most revenue for his team according to the Revenue Above Replacement (RAR) model developed by my firm Block Six Analytics (B6A).

       AI Makes Humans More Intelligent    BY ADAM GROSSMAN     

 
   
     
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
     
   
      Another human has lost to the descendants of Deep Blue. First, world champion Garry Kasparov lost to IBM’s Deep Blue supercomputer in chess in 1997. Then Jeopardy’s all-time consecutive show winner Ken Jennings succumbed to IBM’s Watson computer system in 2010. Recently, Go’s “best player” Ke Jie was soundly  defeated  by a computer system called AlphaGo powered by DeepMind.  Ke’s loss to AlphaGo seemed like a particularly tough defeat for humans because Go seemed potentially too complex for a computer to master. As context, the total number of possible moves in Go is about 10170 while there only exist approximately 1080 atoms in the entire observable universe.  Yet, Ke was still soundly defeated in a recent match. As the   Economist     explains (referencing an earlier match with another human Go champion), “Until Mr. Lee’s defeat, Go’s complexity had made it resistant to the march of machinery. AlphaGo’s victory was an eye-catching demonstration of the power of a type of AI called machine learning, which aims to get computers to teach complicated tasks to themselves.”  What may be particularly fear-inducing to humans is that AlphaGo actually taught itself how to beat Ke rather than relying on humans to train the machine. What does this mean in English? This version of AlphaGo was not the first DeepMind machine used for this  task .  The original AlphaGo studied thousands of examples of human games, a process called supervised learning. Since human play reflects human understanding of such concepts, a computer exposed to enough of it can come to understand those concepts as well. Once AlphaGo had arrived at a decent grasp of tactics and strategy with the help of its human teachers, it kicked away its crutches and began playing millions of unsupervised training games against itself, improving its play with every game.  AlphaGo did not train using human teachers. The DeepMind researchers created a “reward function” which told the machine what goal it was trying to achieve. In this case, former New York Jets coach and current ESPN Analyst Herm Edwards stated it best when he said, “You play to win the game!” Then the computer experimented with different moves to determine the best strategy in each game. In only two days, AlphaGo learned how to far outperform earlier versions and vastly outperform the best Go players.  Perhaps the most “devastated” person in this whole experience would be Ke. He was the best player at Go, and it was increasingly clear he would never be better than AlphaGo. Instead Ke took the opposite approach to machine learning. Ke studied what the machine was doing and applied that to his own game. Because the machine did not learn how to play from studying humans, it could “see” the game in an entirely different way than humans could. Ke went on to have 22 match winning streak against the world’s best human competition.  This is not the first time that big data analysis has led to insights that could be applied to human activities that humans were unlikely to develop themselves. The most well-known example involves defensive shifts in baseball. In his book   Big Data Baseball: Math, Miracles, and the End of a 20-Year Losing Streak  , Travis Sawchik perhaps best explains how a team used something completely counter-intuitive to human thinking as a way to gain a strategic advantage. The Pittsburgh Pirates would shift their infielders to all be on one side of the field because their analysis of hitting patterns found that many hitters overwhelmingly hit to that side. This would mean more groundball outs and less runs scored by opposing teams.  The problem is that this strategy left large portions of the field uncovered by players. To humans, that seems absurd. Why not cover all parts of the field with your players? Why would hitters not just adapt their swings and hit where there were no fielders? A manager potentially has the ability to look very stupid by employing this strategy. For a variety reasons, including the speed and spin rotation of pitches at the Major League level, it is very difficult for hitters to change their natural swing. Therefore, Pittsburgh’s seemingly foolish strategy worked surprisingly well.    The difference between what the Pirates discovered and AlphaGo is that humans spent hundreds of hours analyzing big data to determine that field shifting would benefit their team. AlphaGo determined the equivalent of field shifting for Go on its own in two days. This is actually a very good thing for humans. More specifically, companies are often looking for innovation and new insights from big data or technology. The concept of “disruption” is based on the idea that humans will discover the next big innovation that can provide companies (or sports organizations) with that next big competitive advantage.  What AlphaGo shows is that humans can now learn disruptive practices from machines rather than machines “waiting” for disruptive ideas to come from humans. Computers can think “outside of the box” (even though the machines are often contained in boxes) because they do not think like humans. Humans can and should leverage the power of machines to come up with disruptive ideas to gain competitive advantages.  At Block Six Analytics, we use machine learning in this way. In particular, our  Media Analysis Platform  and  Social Sentiment Analysis Platform  use artificial intelligence to help buyers and sellers of corporate partnerships in sports to maximize revenue growth. Our  Partnership Scoreboard  Software As A Service (SaaS) application creates insights that we share with our clients to help them determine the best way to allocate sponsorship dollars.  No one likes to lose and losing to a machine can seem especially difficult and embarrassing. However, humans’ abilities to recognize, understand, and apply disruptive technologies and strategies can be the best result of machine learning in the final analysis.
BY ADAM GROSSMAN

AI Makes Humans More Intelligent

Humans can now learn disruptive practices from machines rather than machines “waiting” for disruptive ideas to come from humans. Computers can think “outside of the box” (even though the machines are often contained in boxes) because they do not think like humans. Humans can and should leverage the power of machines to come up with disruptive ideas to gain competitive advantages.