Shared Customers, Strategy Key to Allegiant, MiLB Partnership  BY ADAM GROSSMAN     

 
   
     
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
     
   
         One way that sports sponsorships differ from traditional advertising is that they can create a two-way beneficial relationship where shared customers can lead to a shared strategy from which both the buyer and seller directly benefit through a partnership. Allegiant’s new credit card partnership with Minor League Baseball (MiLB) is an example of how this occurs.  Allegiant was an airline founded in 1997 that struggled at first to gain traction. In the early 2000s its senior leadership team recognized that the  company  “needed to be more than a 'me too' competitor” and used a form of judo strategy to achieve this goal. The core idea of judo strategy is to take a competitor’s strength and turn it into a weakness that can be used to your advantage.    That is exactly what Allegiant airlines has done to be successful. The core strategy of many larger airlines is to  focus  on the business traveler, to provide as many direct flights as possible from big cities, and to use hubs to connect to smaller markets. This approach enables airlines to achieve success targeting the customers and routes that can provide the most profits. Business travelers typically are less price sensitive (i.e. the priority is to get to a specific destination at a specific time over a specific price) and there are more business customers in large cities.     This is also the approach that attracts the most competition and is most replicated in the industry. Allegiant realized that it could not compete with larger, well-funded competitors using this strategy. Instead, it recognized that targeting leisure travelers in underserved cities looking for direct flights could be a profitable approach for the company even with low-cost tickets. It also realized that larger airlines would not compete for this demographic because they had committed their capital and strategic resources specifically to not target this customer. Allegiant’s positioning became a catalyst for the company to quickly become a market leader with this customer segment and to make it one of the fastest growing airlines.  This positioning has also enabled Allegiant to  sell  “third-party travel products, such as hotel rooms, rental cars and hotel shuttle products and  show/park tickets  bundled with the purchase of air transportation [emphasis added]” to this customer base. Airlines as a whole are trying to increase revenue by selling third-party products to customers. Selling these products has helped to fuel Allegiant’s rise, as the company has seen a 23.8% compound annual growth rate (CAGR) from 2005-2017 from these offerings.   Selling third-party products, however, is not unique to Allegiant. Most, if not all, of the company’s larger competitors offer these types of products, including credit cards. To continue with a comparable growth rate in the future, Allegiant needed to develop third-party products that would specifically resonate with its core customers. That is exactly where the credit card partnership with MiLB comes into play. MiLB teams’ customers are similar to Allegiant’s customers and MiLB teams’ strategies often look similar to Allegiant’s strategy.   More specifically, MiLB teams often are located in “underserved” cities and employ judo strategy to achieve to achieve their goals. In our book   The Sports Strategist: Developing Leaders for a High-Performance Industry  , my co-authors and I highlight the Dayton Dragons MiLB team and its approach to selling season tickets. Many major professional sports teams are focused on selling full-season ticket packages to lock-in as much revenue as possible. Dayton used a form of judo strategy by determining what games fans could attend and developing season ticket packages that fit its fans’ needs. Dayton could use this strategy in large part because it had a smaller venue and a smaller target market than major professional teams. Its positioning played a critical role in the Dragons having a 1,000+ game sellout streak that  continued into the 2018 season.    This example creates the foundation for the strategic fit for an expansion of the Allegiant / MiLB partnership. The new  Allegiant World Mastercard ® “will enable fans to gain rewards specific to their favorite MiLB teams and local communities.” These rewards should uniquely resonate with Allegiant’s customer base of leisure travelers that want direct flights and entertainment options for underserved cities. This is not a specific reward that necessarily makes sense for larger airlines or larger sports leagues to offer because it will not resonate as well with their customers.  MiLB can potentially increase its fan base by providing a credit card with travel options that are specifically designed for the needs of its core customers in smaller cities. The easier it is for leisure fliers to get to MiLB ballparks through Allegiant, the more likely its fans will value its rewards (potentially including tickets, merchandise, and concessions) and increase engagement with its teams. Both Allegiant and MiLB can work together as partners to leverage each other’s assets to grow revenue with a shared customer base and strategy.   Recognizing fit to maximize partnership success is at the core of B6A’s  Corporate Asset Valuation Model (CAV)  analysis. In particular, we focus on how specific relationships can generate revenue growth for specific companies given their specific needs. The Allegiant / MiLB example highlights why we take this approach and recommend that buyers and sellers of sports sponsorship should use a similar form of analysis.    

BY ADAM GROSSMAN

Shared Customers, Strategy Key to Allegiant, MiLB Partnership

One way that sports sponsorships differ from traditional advertising is that they can create a two-way beneficial relationship where shared customers can lead to a shared strategy from which both the buyer and seller directly benefit through a partnership. Allegiant’s new credit card partnership with Minor League Baseball (MiLB) is an example of how this occurs.

      WHICH OF THE COLLEGE FOOTBALL PLAYOFF TEAMS IS THE MOST LIKABLE, ACCORDING TO TWITTER?  BY USA TODAY     

 
   
     
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
     
   
       Block Six Analytics    Social Sentiment Analysis Platform    examined the favorability of Twitter conversation for schools competing to make the College Football Playoff for    USA Today   . A sample of this analysis is included below. The full post can be seen on the USA Today Sports    site   .   Twitter users and members of the College Football Playoff committee share positive feelings about the national semifinalists.  An analysis by Block Six Analytics of 75,000 tweets from Sunday until Tuesday based on percentage of positive posts ranks the top four teams in the exact order as the playoff committee: Alabama with 65.57 percent positive tweets, followed by Clemson (65.22), Notre Dame (60.31) and Oklahoma (46.77). Those numbers also mirror expectations for the semifinals with Alabama and Clemson expected to advance to the national title game.  “The number of impressions is only one component in evaluating social media conversation,” said Adam Robbins, B6A’s head of corporate sales. “Understanding sentiment and engagement is crucial in measuring social media value, especially related to sports. It allows teams, leagues and brands the ability to identify topics, trends and people that are generating the most interest and value for their organization.” 

BY USA TODAY

Which of the College Football Playoff teams is the most likable, according to Twitter?

Twitter users and members of the College Football Playoff committee share positive feelings about the national semifinalists. An analysis by Block Six Analytics of 75,000 tweets from Sunday until Tuesday based on percentage of positive posts ranks the top four teams in the exact order as the playoff committee: Alabama with 65.57 percent positive tweets, followed by Clemson (65.22), Notre Dame (60.31) and Oklahoma (46.77). Those numbers also mirror expectations for the semifinals with Alabama and Clemson expected to advance to the national title game.

      The Brooklyn Nets, Juventus F.C. Cross-Over   BY ADAM GROSSMAN     

 
   
     
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
     
   
      For the  first time  ever, a Serie A soccer team will collaborate with an NBA team when the Brooklyn Nets will have a “special themed” Juventus F.C. night as part of its December 7th game against the Toronto Raptors. More specifically, “a watch party will be held for Juventus’ domestic fixture against rivals Inter Milan, with the match shown on screens in the New York venue” before the game against the Raptors. In addition, the Barclays Center will be adorned with Juventus “branding” that night as well including that “the stadium’s outside lighting will also promote the Juventus brand.”    Why would the Nets and Juventus agree to do this, besides the fact that they share similar team colors? The answer likely focuses on increasing revenue through better targeting of the U.S. fan base. In particular, European teams appear to see an advantage in targeting specific cities and regions rather than relying on national activations.   It is true that the European leagues have been successfully making inroads into the U.S. for years through television broadcasts like the Premier League now on NBC Sports. In addition, European sides have played exhibition games in the U.S. for years with La Liga taking the step of scheduling a regular season match in Miami for the first time in January 2019 featuring  Barcelona , “as part of a 15-year deal struck between La Liga and entertainment company Relevent to play one Spanish regular-season game in the U.S. every year.”    Arguably all of these activations, however, are focused on a league building a national or larger audience in the United States. Teams are looking at taking a different approach. While this may be the first time a Serie A team and an NBA team have worked together it is not the first time this type of collaboration has occurred in the U.S. In November 2017, Schalke 04 and the St. Louis Blues partnered together for  activations  in the city for the match against rival Borussia Dortmund.   In last week’s post we talked about the importance of the marginal fan as  central component  of the Ticketmaster, Fanatics deal. These are fans that can be persuaded to make a purchasing decision or increase brand engagement through marketing or advertising. It is likely that both Juventus and Schalke have identified Brooklyn and St. Louis, respectively, as specific areas in the U.S. where they can increase their fan bases. Each time they have or will create unique experiences with local teams to target these fans.   How could Juventus or Schalke identify these areas / teams as good partners for this type of collaboration? One possible way is through social media account analysis. Our  Social Sentiment Analysis Platform  (SAP) can use Twitter to analyze the followers of specific accounts for demographic information including age and gender. We then compare the demographics of the followers from each account to determine overlap.    In the table below you can see a comparison of the Nets and Juventus and why this partnership is a good fit from our SAP results. Brand means a company or business that follows an account rather than an individual person.        

  

  	
       
      
         
          
             
                  
             
          

          

         
      
       
    

  


     We have not worked directly with any of the teams mentioned in the post, so we do not know exactly what analysis they did to determine why these cities would be a good fit. However, it is likely that both Juventus and Schalke did something similar to an SAP analysis to determine that Brooklyn and St. Louis, respectively, were good cities to target. Leveraging the relationship that one team has with its fans is a similar approach that other teams can use to target new fans in a different market. 

BY ADAM GROSSMAN

The Brooklyn Nets, Juventus F.C. Cross-Over

For the first time ever, a Serie A soccer team will collaborate with an NBA team when the Brooklyn Nets will have a “special themed” Juventus F.C. night as part of its December 7th game against the Toronto Raptors. Why would the Nets and Juventus agree to do this, besides the fact that they share similar team colors? The answer likely focuses on increasing revenue through better targeting of the U.S. fan base. In particular, European teams appear to see an advantage in targeting specific cities and regions rather than relying on national activations.

      Fanatics, Ticketmaster Find Insights Through Data Analysis  BY ADAM GROSSMAN     

 
   
     
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
     
   
      Fanatics and Ticketmaster agreed to  sell  verified tickets and merchandise on each other’s sites earlier this week. While there are many interesting components to this deal, one driving factor for the new partnership is using data to drive incremental revenue growth.    In the book   The Sports Strategist: Developing Leaders for a High-Performance Industry  , my co-authors and I talk about how data mining can be used for sports organizations to target the marginal fan. This often means examining data to identify current or potential customers that are likely to make a purchasing decision in the near-term if targeted at the right time with the right message to drive the right call-to-action.    Fanatics and Ticketmaster have identified a clear opportunity to identify and monetize the marginal fan. More specifically, it is easy to see that fans looking to buy a team’s merchandise on the Fanatics site should be more likely to purchase a ticket to a game or sporting event on the Ticketmaster site than the average person and vice versa. Having more granular data on what and how frequently customers buy merchandise can help Ticketmaster both identify customers to target and what messaging will specifically resonate with those customers.    Fanatics and Ticketmaster’s new relationship is a good example of the importance of data-driven sports partnerships that should be applied outside of ticketing and merchandise. In particular, one key reason to partner with a sports property is to generate lift from an economic and engagement perspective. Both Ticketmaster and Fanatics are driving tangible lift in both areas by partnering with each other because they are increasing the probability of reaching their target demographics.     Using data to drive  incremental growth  is at the heart of Block Six Analytics’ (B6A’s) product offerings. Buyers and sellers of sports sponsorship use B6A’s Corporate Asset Valuation Model (CAV) within our  Partnership Scoreboard  platform to identify fit between partnership activations and a company’s business and brand goals. The CAV examines how effectively a partnership with a sports property enables a company to better reach its customers in the right channel with the ability to drive tangible business results.    One of the new ways B6A can use data to identify these opportunities is using our  Social Sentiment Analysis Platform  (SAP) to determine the demographics of partners and properties by looking at Twitter accounts. More specifically, B6A can look at the follower activity on Twitter to predict the age and gender breakdowns of those accounts.    We completed a sample of analysis of AT&T and Notre Dame to illustrate how this information can be applied to a sponsorship analysis. The  average wireless customer  is between 43-49 years old with AT&T's average wireless customer being 46.6 years old. SAP found that Notre Dame Football Twitter followers are 45.4% more likely to be ages 44+ than AT&T’s current followers. Therefore, AT&T can potentially leverage a relationship with Notre Dame to better target and engage its wireless customers through a Twitter campaign.     The key to this example is that a potential Notre Dame sponsorship is a particularly good fit for AT&T given its customer base that drives current top-line revenue for the company in its Entertainment Group and Consumer Mobility business units. Having specific insights for specific companies about specific partnerships is really where data-driven analysis provides significant benefits to both partners and properties. This is the type of information should be at the heart of any conversation about sponsorship ROI.    

BY ADAM GROSSMAN

Fanatics, Ticketmaster Find Insights Through Data Analysis

Fanatics and Ticketmaster agreed to sell verified tickets and merchandise on each other’s sites earlier this week. While there are many interesting components to this deal, one driving factor for the new partnership is using data to drive incremental revenue growth. In the book The Sports Strategist: Developing Leaders for a High-Performance Industry, we talk about how data mining can be used for sports organizations to target the marginal fan. This often means examining data to identify current or potential customers that are likely to make a purchasing decision in the near-term if targeted at the right time with the right message to drive the right call-to-action. Fanatics and Ticketmaster have identified a clear opportunity to identify and monetize the marginal fan.

      Warriors Sell More By Selling Out  BY ADAM GROSSMAN     

 
   
     
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
     
   
      One well-known strategic challenge sports organizations face is monetizing their venue throughout the year. More specifically, the MLB, NBA, NHL, and NFL play 81, 41, 41, and 8 regular season home games respectively where the teams have maximum seating (and sometime standing room only) capacity that limits the number of tickets they can sell.   One lesser-known challenge is that sports organizations do not fully utilize much of their venues even on game days. More specifically, most fans spend much of their time in venues watching games from their seats. That means locations throughout the arena are often unused for much of the game because fans are understandably focused on game action.  The Golden State Warriors have discovered a potential solution to this problem. The team is now offering an " In The Building " pass for $100 per month. Pass holders can enter Oracle Arena to access to the arena's bars and restaurants but the pass does not grant seating access or a view of the court.     Teams have been working with their partners to create unique experiences within their venues. In a  recent post , we talked about how the Devils in particular have already sold to both William Hill U.S. and Caesars Entertainment branded betting hospitality locations in the Prudential Center. The Detroit Lions have created the  Miller Lite Taproom  as unique social space at Ford Field.   A potential problem with these new locations is that it requires fans to make a choice to leave their seats to enjoy the experience of these locations. The In The Building pass should solve this problem by selling passes to fans that are specifically interested in going to these hospitality areas. This enables teams to better monetize their fan base on game days while also helping partners maximize foot traffic at their hospitality locations.  The Warriors created the In The Building pass in large part because the team had  sold out  for 300 consecutive games and has a 44,000 person season-ticket waiting list. However, this monthly pass could actually increase ticket sales for teams that implement this idea without being in the Warriors enviable position.  The proliferation of mobile devices has enabled teams to create new ticket offerings to customers. In particular, teams have offered fans ticket upgrades often through their  mobile app  for fans to purchase better/upgraded seats when they are at the venue.   One of the original reasons to do this was to increase season-ticket purchases. More specifically, fans would be more willing to buy season tickets if they knew they could relatively easily sell the tickets for games they could not attend. Exchanging these tickets directly with a team through an app provided teams with more direct control over the secondary (i.e. resale) ticket market while also increasing their revenue from their primary distribution channel (i.e. season tickets).  A problem was that teams would often be limited in their potential addressable market to current ticket holders (i.e. to upgrade a seat for which a fan needed a ticket in the first place). The monthly pass increases the potential audience size that can purchase ticket upgrades. The fact that the fans are already at the venue means it is likely that they would be much more willing to buy a seat upgrade (since they do not have a seat already). If the venue has no seats available then they can still enjoy all of the hospitality locations they were planning to attend anyway.   It is ironic that a solution that was designed because no season tickets were available to Warriors games could help other teams sell season tickets. Yet, this is exactly the type of solution that can work for teams, fans, and partners because sports organizations are experts at creating unique experiences. By maximizing the number of people in the building, teams can better monetize venue assets in ways that work for all sports audiences.

BY ADAM GROSSMAN

Warriors Sell More By Selling Out

One well-known strategic challenge sports organizations face is monetizing their venue throughout the year. More specifically, the MLB, NBA, NHL, and NFL play 81, 41, 41, and 8 regular season home games respectively where the teams have maximum seating (and sometime standing room only) capacity that limits the number of tickets they can sell. One lesser-known challenge is that sports organizations do not fully utilize much of their venues even on game days. More specifically, most fans spend much of their time in venues watching games from their seats. That means locations throughout the arena are often unused for much of the game because fans are understandably focused on game action. The Golden State Warriors have discovered a potential solution to this problem.

       Embiid Is Early Candidate For NBA MVP   BY ADAM GROSSMAN     

 
   
     
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
     
   
      One of the biggest debates every year in the NBA is which player should win the most valuable player (MVP) award. In particular, the media and fans alike often have heated arguments based on their own unique definition of what the term “valuable” means. For example, does value mean the best player on the best team or can a player on a bad team still win the award given his performance?   Trying to make the intangible more tangible is one of the key priorities for Block Six Analytics. With our  Corporate Asset Valuation  Model (CAV), we determine a specific value for a specific sponsorship by applying how a company makes money and what a company’s marketing / brand goals are to a specific partnership. In essence, we look at how what is most important to the company translates to each sponsorship activation.   We wanted to apply the same logic to players as we use for partners. More specifically, what is most important to teams is how does each player help that team win and generate revenue. Our  Revenue Above Replacement  (RAR) model specifically answers these questions by looking at an athlete’s on-court and off-court performance.   For this post, we are going to specifically look at our on-court metrics called B6A Wins. We use multi-factor regression analysis to determine which factors contribute to winning and how much each factor contributes using advanced analytics from  Basketball Reference  as a baseline. For the NBA, we found that these factors best determined the number of team wins:    True Shooting Percentage    Total Rebound Percentage    Assist Percentage    Steal Percentage    Usage Percentage    Defensive Plus / Minus       

  

  	
       
      
         
          
             
                  
             
          

          

         
      
       
    

  


     Joel Embiid came out on top of the early season 2018-19 rankings. 2019 B6A Wins shows our projection for each player’s performance for the entire year. 2018 B6A Wins YTD shows the player’s impact on the number of team wins so far in the season. While Russell Westbrook is behind Kevin Durant in B6A Wins YTD, Westbrook is projected to surpass Durant by the season’s end.   To provide context to these numbers, the table below shows the final results for the 2017-18 season.      

  

  	
       
      
         
          
             
                  
             
          

          

         
      
       
    

  


     While James Harden won the MVP award last year, he was only fifth in B6A Wins. LeBron James should have been the MVP last year if you define value by the player that contributed the most wins to his team. In addition, the 2018 B6A Wins tally shows that Embiid and Nicola Jokic are projected to have far better performances this year than anyone had last year.   This piece of analysis leads to an important point. RAR can not only project a player’s B6A Wins through the end of the 2018-19 season, but it can also project a player’s performance through the 2023-24 season. However, there are factors that are difficult to account for in this or any model for player performance including injuries, coaching changes, trades, and more. Therefore, this analysis requires a margin of error when evaluating the results.    What is arguably more important, however, is the process of determining what value means. From B6A’s perspective, creating clear metrics with tangible factors for analysis that can be examined and communicated is critical to answering some of the toughest questions in sports such as determining the NBA MVP. 

BY ADAM GROSSMAN

Embiid Is Early Candidate For NBA MVP

Trying to make the intangible more tangible is one of the key priorities for Block Six Analytics. With our Corporate Asset Valuation Model (CAV), we determine a specific value for a specific sponsorship by applying how a company makes money and what a company’s marketing / brand goals are to a specific partnership. In essence, we look at how what is most important to the company translates to each sponsorship activation. We wanted to apply the same logic to players as we use for partners. More specifically, what is most important to teams is how does each player help that team win and generate revenue. Our Revenue Above Replacement (RAR) model specifically answers these questions by looking at an athlete’s on-court and off-court performance.

      Gambling Is A Safe Bet For Sponsorship But Not For The Reasons You May Think  BY ADAM GROSSMAN     

 
   
     
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
     
   
      Arguably the best bet to make on the legalization of sports gambling in the U.S. was its impact on the growth of sports sponsorship revenue. In the past week alone, the  NHL ,  New York Jets ,  New Jersey Devils , and Philadelphia  76ers  have all signed new betting partnerships.  What is more surprising is the structure of these deals and what they do not include. In particular, many of these new deals are not exclusive to a particular company, not exclusively focused on sports, and not exclusively focused on the U.S.   The NHL’s deal announced this week with MGM Resorts is similar in structure to the deal the company struck with the  NBA  from a data perspective. The company will have non-exclusive  rights  to “NHL's proprietary game data generated by the league's state-of-the-art tracking systems.” Data is required for sports gambling to exist with both sides of a betting transaction needing to rely on information to determine the winner and loser for the transaction. This enables MGM to credibly say to sports bettors that it has access to the most accurate NHL information.     However, MGM is not the only company that will have this opportunity because of a non-exclusive agreement. This relationship enables the NHL to maximize its partnership revenue by potentially selling the same data to multiple gambling companies.   This non-exclusive approach is also being used at the team level. Both the Devils and Jets have multiple relationships with gambling partners. The Devils in particular have already sold to both William Hill U.S. and Caesars Entertainment and both will have branded betting hospitality locations in the Prudential Center. The hospitality activations are particularly interesting because on-site gambling at the arena is not legal. Both William Hill and Caesars are using the hospitality locations to facilitate betting on their mobile applications.   MGM is taking a non-sports specific approach when it comes to its mobile strategy in its new relationship with the Jets. The company is sponsoring a game within the Jets official team app that only allows players to win prizes (and not money). As MGM's president of interactive gaming Scott Butera  said , "We can promote our app and our casino, which is valuable to us because it could lead to a sports betting customer, even though the NFL won't allow us to have a specific call to action. We love the demographic that Jets fans provide.”  It is atypical for a partner to agree to a sponsorship where it admits that its stated intention (i.e. potentially increasing sports gambling revenue) only “could” result in action because the rights holder does not allow for “a specific call to action.” However, MGM recognizes that its relationship with the Jets can help the company reach its target customer for its non-sports businesses.   More specifically, MGM can leverage a sports betting opportunity to better engage with its demographics for its non-sports businesses. This is a crucial point that gambling companies currently (and likely in the future) make the vast majority of their revenues from non-sports betting. Prior to the legalization of sports gambling, it was very difficult for gambling companies to activate partnerships outside of daily fantasy sports. Sports audiences are lucrative gambling, and not just sports betting, customers. Now gambling companies have better access to these customers.     The 76ers relationship with Caesars requires that it have activations solely focused on “non-sportsbook” activities because sports gambling is still not legal in Pennsylvania at this time. The 76ers arrangement also shows another interesting twist to legalization of sports gambling in the U.S. The team demonstrates that gambling companies do not need to solely focus domestically when it comes to these relationships. Caesars Entertainment Chief Experience Officer Michael  Marino  “emphasized the global reach of the 76ers as an appealing aspect of the deal. The 76ers, he said, have a large fanbase in China where the team competed in two preseason games earlier this month.”  It may seem counterintuitive that companies would focus on reaching international markets because of the legalization of sports gambling in the U.S. While gambling is illegal in much of China, Macau is the  largest gaming hub  in the world, generating $3.3 billion in revenue in August alone. Companies have used NBA teams to promote products in China for years with the  Houston Rockets  being one of the teams most well-known for these partnerships. The legalization of sports gambling in the U.S. and the change in rules by domestic leagues to allow sports gambling partners should continue to enable sponsorships with international reach.    The legalization of sports gambling will continue to have a big impact on sports. The reason that sports gambling sponsorships can be non-exclusive to a specific company, non-exclusive to sports, and non-exclusive to the U.S. is that companies see new ways to generate incremental revenue growth. The organizations that see the scope of the opportunity will be the ones that can best benefit from the growth of sports gambling.  

BY ADAM GROSSMAN

Gambling Is A Safe Bet For Sponsorship But Not For The Reasons You May Think

Arguably the best bet to make on the legalization of sports gambling in the U.S. was its impact on the growth of sports sponsorship revenue. In the past week alone, the NHL, New York Jets, New Jersey Devils, and Philadelphia 76ers have all signed new betting partnerships. What is more surprising is the structure of these deals and what they do not include. In particular, many of these new deals are not exclusive to a particular company, not exclusively focused on sports, and not exclusively focused on the U.S.

      WHY DAVID FALK JOINED B6A  BY ADAM GROSSMAN     

 
   
     
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
     
   
      Learn why David Falk decided to join Block Six Analytics (B6A) as an advisory board member and investor. Falk, the founder of FAME, has long been recognized as one of the sports industry’s leading figures and most talented innovators. During a 40 year career, he has represented the top players in NBA history and has negotiated record-breaking contracts for his clients, both on and off the court. His vision and ability to read the changing landscape helped to shape the evolution of the business of sports over the past 30 years.          </iframe>" data-provider-name="YouTube"

BY ADAM GROSSMAN

WHY DAVID FALK JOINED B6A

Learn why David Falk decided to join Block Six Analytics (B6A) as an advisory board member and investor. Falk, the founder of FAME, has long been recognized as one of the sports industry’s leading figures and most talented innovators. During a 40 year career, he has represented the top players in NBA history and has negotiated record-breaking contracts for his clients, both on and off the court. His vision and ability to read the changing landscape helped to shape the evolution of the business of sports over the past 30 years.

       Abbott Demonstrates The Value of Experiential Marketing At The Chicago Marathon   BY ADAM GROSSMAN     

 
   
     
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
     
   
      Can you keep up with Eliud Kipchoge? That was the question that Abbott Health posed at the recent 2018 Chicago Marathon expo. Attendees of the 2018  Chicago Marathon  expo were asked to try to maintain Kipchoge’s 2:01:39 marathon pace for “only” 200 meters. Some were successful while many others unfortunately achieved “ hilarious results .”  Abbott Health’s goal clearly was not to make attendees, even marathon runners, potentially look foolish by trying to keep up with Kipchoge even for a short time. Instead, the company was likely trying to create an authentic connection with an audience likely to contain its target demographic in a way that would encourage people to engage with the brand.  That is the promise of experiential marketing with sports. More specifically, sports create unique environments where companies can reach their customers in novel ways not available to other rights holders.   Abbott is a good example. Abbott’s primary  mission  is to “[help] the people who use our products achieve better health.” The Chicago Marathon enabled Abbott Health to create a novel activation to reach this audience. Many marathon runners complete races knowing that they are not going to set a world record pace like Kipchoge. They run marathons to achieve better health and look for companies that can help achieve these goals.  It is not just the runners themselves. The marathon is one of the biggest events annually attracting thousands of spectators and hundreds of companies all focused on health. This audience is clearly a good fit for Abbott so it makes sense that the company would want to sponsor this event.  While audience fit is critical, engaging with a company’s target demographic is arguably more important. Most marathon runners and their families understand they will never really have the opportunity to run against a world-record holder. Top runners often  start  earlier than other participants and can be 30 minutes into a race before the average runner even begins.    The Chicago Marathon expo provided Abbott Health with an opportunity to create this experience via the expo. Its customers could not only literally see Abbott’s commitment to better health, but it is also enabled the company to showcase the  Abbott World Marathon Majors  series to an audience that is naturally interested in these events. More specifically, this activation creates an opportunity for Abbott to have a longer impact with this demographic beyond the Chicago Marathon itself.     The challenge with experiential marketing in the past has been quantifying the ROI of this type of sponsorship. More specifically, experiential marketing activations usually only reach a relatively small audience. Around 45,000 runners compete in the Chicago Marathon and have to attend the expo to pick up their raceday information. Even accounting for their families, corporate attendees, and  social  /  earned media  exposure, Abbott’s activation at the marathon reaches a smaller audience as compared with other larger sporting events.    The size of the audience should definitely be a consideration when factoring in the ROI of a sponsorship. However, the quality of the audience to the company and level of engagement is equally, if not more, important. As demonstrated in previous B6A  blog posts , companies are looking for ways to have deeper interactions with audiences that will drive significant business results. Abbott’s activation at the Chicago Marathon expo demonstrates a great way for a company to leverage a rights holder’s assets to achieve this goal.    This type of activation should and likely does deliver a significant ROI to Abbott. Yet, standard impression-based metrics (i.e., CPM) would not account for the full value because the quantity of people at the expo is relatively low. That is one of the core reasons why we built B6A’s  Corporate Asset Valuation  Model (CAV) to focus on both quality and engagement. Looking at fit and level of interaction an audience has with a sponsorship activation are central components to how we calculate value. Abbott’s Chicago Marathon expo activation is a good example of why we took this approach

BY ADAM GROSSMAN

Abbott Demonstrates The Value of Experiential Marketing At The Chicago Marathon

Can you keep up with Eliud Kipchoge? That was the question that Abbott Health posed at the recent 2018 Chicago Marathon expo. Attendees of the 2018 Chicago Marathon expo were asked to try to maintain Kipchoge’s 2:01:39 marathon pace for “only” 200 meters. Abbott Health’s goal clearly was not to make attendees, even marathon runners, potentially look foolish by trying to keep up with Kipchoge even for a short time. Instead, the company was likely trying to create an authentic connection with an audience likely to contain its target demographic in a way that would encourage people to engage with the brand.

      The Challenge Of Not Measuring Company-Specific Sponsorship ROI  BY ADAM GROSSMAN     

 
   
     
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
     
   
      When looking at the quality of sponsorship activations, the Block Six Analytics (B6A)  Corporate Asset Valuation  model examines three factors:    Initiatives – What is a company trying to accomplish?    Demographics – Who is a company trying to target?    Channels – What is the best way to reach those demographics?     Using this framework is a good approach to analyzing a recent  CNBC  post with the headline, “Sponsorship spending to hit $66 billion worldwide, but most firms don't know if it really works.” This post focuses on research by agency MKTG and data from the World Advertising Research Center (WARC) which resulted in a central finding that “only 19 percent of sponsorship professionals say they can measure return on investment.”  What is CNBC trying to accomplish with this post? The answer is likely to bring awareness to the idea that companies can spend millions of dollars in sponsorship and not understand if it is driving tangible business results. It is difficult to think of another advertising or marketing channel with this level of spend that to date has not often required a detailed ROI analysis.  Whom is CNBC trying to target? CNBC’s target  demographic  is an “audience of business professionals and affluent investors.” This includes CEOs, CFOs, CMOs, and senior decision makers at companies that are traditionally large sports sponsorship spenders. This audience is used to using detailed quantitative analysis to determine the effectiveness of advertising and marketing spend.   What is the best way to reach these demographics? Business professionals and affluent investors often turn to companies like CNBC, Fox Business Network, and Bloomberg for news. In particular, these professionals and investors are looking for insights that can improve their job performance. Sports business content typically is not something that resonates with the audience as much as content focused on how sponsorship, advertising, and marketing impact a company’s performance.   CNBC could create this type of content because this post reaches its target demographics and contains insights that will attract them to its site. This article would not resonate with all audiences nor is CNBC’s goal to always reach a large audience. In fact, CNBC would have a difficult time competing with other news websites on audience size. CNBC can primarily monetize its website by offering advertisers the ability to reach an attractive target demographic through content.   Understanding a company’s business is not always a key component of sponsorship analysis. MKTG and WARC  found  that “37 percent of people have a standard way to measure the impact of sponsorship, with digital and social media analysis popular methods…[with] 73 percent of those surveyed by MKTG saying ‘brand awareness’ is the main point of sponsorship.”  Brand awareness and digital / social metrics scored so highly because they are relatively easy to track. In particular, standard metrics such as cost per thousand impressions (CPM), cost per click (CPC), and cost per engagement (CPE) will tell companies if they are reaching a large audience in an effective way. Reaching a large audience is often the most effective away to build brand awareness.  Is reaching a large audience actually important to a company in generating a positive ROI? The answer is not really for many of the companies that are the largest spenders for sports sponsorship. Many companies like  McDonald’s  and  Anheuser-Busch  have near ubiquitous brand awareness with their customers. Increasing that is less likely to drive sales growth or engage with their customer. This is the primary reason that both companies have changed their approach to sponsorship spend recently to be focused on driving revenue.       For some companies, increasing awareness is critical because many members of its target demographic did not previously know who the company is or what products it sells. Our analysis of FirstEnergy’s relationship with the Cleveland Browns in a previous blog post shows when this can be  effective .     However, it is not effective for everyone. Senior business leaders are asking how a sponsorship is going to maximize a company’s ability to directly generate revenue growth and better engage with their target customers. Only nineteen percent of sponsorship professionals having an answer to this question is a fundamental issue for the $66 billion sponsorship industry.     B6A tools do directly address this issue. Our  Partnership Scoreboard  examines how specific companies generate ROI from specific activations with specific properties. It enables both buyers and sellers of sports sponsorship to see how ROI is generated in near real-time using our technology and analytics. Our approach enables sponsorship industry professionals to communicate directly with business leaders in ways that will clearly answer the ROI question.

BY ADAM GROSSMAN

The Challenge Of Not Measuring Company-Specific Sponsorship ROI

Senior business leaders are asking how a sponsorship is going to maximize a company’s ability to directly generate revenue growth and better engage with their target customers. Only nineteen percent of sponsorship professionals having an answer to this question is a fundamental issue for the $66 billion sponsorship industry.

      FlyQuest Showcases Partnership Value From Game Broadcasts Using B6A’s Partnership Scoreboard  BY FLYQUEST AND BLOCK SIX ANALYTICS     

 
   
     
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
     
   
      Did our partnership assets reach the target audience or demographic? What is the broadcast media value of a jersey sponsorship? What is the impact on customer retention and acquisition?   Those were the questions FlyQuest Sports was thinking about as the team headed into the 2018 North American League Championship Series (LCS) for League of Legends (LOL). FlyQuest was looking to quantify and communicate the value the team delivered for two of its top partners. In particular, FlyQuest was looking to show the value of brand exposure during live game broadcasts for two partners with jersey logo placements.   FlyQuest decided to work with Block Six Analytics (B6A) to answer these questions using B6A’s Partnership Scoreboard. B6A’s Partnership Scoreboard is an analytics platform that delivers accurate, understandable, and verifiable insights that clarify partnership ROI and identify impactful investment opportunities for virtually any sponsorship asset. This includes in venue, corporate hospitality, social media, digital media, traditional media, and intellectual property (IP) activations.  The B6A Media Analysis Platform (MAP) focuses on both quantity and quality. In particular, MAP determines how much value is created from a return on investment (ROI) and return on objectives (ROO) perspective. For ROI, B6A determines the expected revenue generated from the partnership. For ROO, we determine how effective a partner was able to achieve its brand and marketing goals from a partnership. We then layer these ROI and ROO metrics across three categories:     Initiatives (what is a partner trying to accomplish)    Demographics (whom is a partner trying to target)    Channels (where is the best place to reach a partner’s target audience).     “B6A’s Media Analysis Platform enabled us to clearly demonstrate the media value and exposure time that our partners were receiving during game broadcasts,” said Scott Pogrow, Head of Sponsorship Sales. “B6A helped FlyQuest show why integrating our partner’s brands into the team’s identity during live game streams, reaching a key audience, generates significant value for our partners.”  "Our vision at FlyQuest is to innovate and invest in resources that drive the esports industry forward," said Ryan Edens, CEO.  "The ability to showcase value to partners through clear and accurate data is an important step in the right direction, and we want to continue to be at the forefront of this approach."  In addition to utilizing MAP to analyze the events B6A displayed the results in our Partnership Scoreboard. Because the Partnership Scoreboard is a cross-channel valuation and machine learning platform, B6A delivered the results in near real-time enabling FlyQuest to communicate partnership value to partners sooner than ever before.   “FlyQuest is clearly a leader in esports,” said Gabe Ottolini, B6A COO. “Seeing how the team applied our product offerings to significant partnerships demonstrates the importance of clearly communicating how sponsorship value is delivered.”  In addition to FlyQuest, B6A works with NFL, NBA, and MLB teams as well as corporate partners including Pepsi, CDW, and Citi. For more information about B6A’s product offerings, contact us at  info@blocksixanalytics.com .   For FlyQuest partnership opportunities, contact Scott Pogrow at scott.pogrow@flyquest.gg.

BY ADAM GROSSMAN

FlyQuest Showcases Partnership Value From Game Broadcasts Using B6A’s Partnership Scoreboard

Did our partnership assets reach the target audience or demographic? What is the broadcast media value of a jersey sponsorship? What is the impact on customer retention and acquisition? Those were the questions FlyQuest Sports was thinking about as the team headed into the 2018 North American League Championship Series (LCS) for League of Legends (LOL).

      Amazon Goes The Distance With IRONMAN  BY ADAM GROSSMAN     

 
   
     
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
     
   
      Amazon recently announced that the company would  become  the 2018 IRONMAN World Championship title sponsor and Official Sports Nutrition Retailer. Amazon has recently been making news in the sports industry for signing streaming rights  deals  including NFL and US Open events and looked to be increasing its investment in this area.  That fact that Amazon did not acquire streaming rights makes the IRONMAN partnership more interesting. Why would Amazon agree to this deal if it did not include streaming rights?  A relationship with IRONMAN enables Amazon to directly monetize its core business of selling consumer products.  More specifically , “The collaboration will provide participants access to a vast selection of nutrition products, including items from IRONMAN official nutrition partners CLIF Bar and Gatorade, available to athletes looking to prove ‘ANYTHING IS POSSIBLE’ on the sports largest stage.” This includes a pop-up IRONMAN  store  on Amazon’s website “stocked with brands from the event’s official nutrition partners, such as CLIF Bar and Gatorade.”  IRONMAN’s ability to drive traffic to Amazon’s website site highlights an important feature we are seeing in more and more partnerships. In particular, the fact that sports partnerships can clearly show how companies can tangibly generate incremental revenue growth is becoming increasing important in the sports industry.  However, this relationship has a less intuitive benefit for IRONMAN. One reason that companies become partners with sports properties is to gain access to other partners. For example, business-to-business (B2B) companies use their partnerships with sports properties to engage with potential clients at games, events, and / or corporate outings.  In the past, it has been arguably more difficult for business-to-consumer (B2C) companies to secure this type of benefit from sports partnerships. IRONMAN’s relationship with Amazon provides new opportunities to generate incremental revenue growth for its B2C partners. To start, CLIF Bar and Gatorade now are featured on Amazon’s website through the IRONMAN branded store. If this is successful, then it is possible that IRONMAN could have a similar relationship with its other partners through Amazon (e.g., potentially having a Greenlayer Amazon store for IRONMAN apparel).   Being featured on Amazon is a significant competitive advantage for these companies that compete in the consumer products space, as the majority of many companies’ ecommerce revenues come from Amazon. IRONMAN can credibly say that other rights holders would not be able to provide partners with this type of exposure on the world’s largest ecommerce platform.  Amazon should continue to explore new sports streaming rights deals. However, IRONMAN’s relationship with Amazon shows an innovative way to use the ecommerce platform that can benefit multiple partners at the same time. 

BY ADAM GROSSMAN

Amazon Goes The Distance With IRONMAN

Amazon recently announced that the company would become the 2018 IRONMAN World Championship title sponsor and Official Sports Nutrition Retailer. Amazon has recently been making news in the sports industry for signing streaming rights deals including NFL and US Open events and looked to be increasing its investment in this area. That fact that Amazon did not acquire streaming rights makes the IRONMAN partnership more interesting. Why would Amazon agree to this deal if it did not include streaming rights?

       #JustDoIT vs. Khalil Mack   BY ADAM GROSSMAN     

 
   
     
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
     
   
     

 
   
     
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
     
   
      The two biggest storylines to emerge in the days before the NFL season kicks off involve both on-field and off-field narratives. The first is the trade of All-Pro linebacker Khalil Mack to the Chicago Bears from the Oakland Raiders. The second is Nike announced free agent quarterback Colin Kaepernick as the featured spokesperson for the 30th anniversary of the company’s signature “Just Do It” (#JustDoIt) campaign and is reportedly providing him with his own  signature shoe and apparel line .  The fact that both of these events happened within days of each other created an interesting question. Would the most important on-field event (Mack’s trade) or the most important off-field event (Kaepernick’s new Nike relationship) generate more interest?  We used Block Six Analytics  Social Sentiment Analysis Platform  (SAP) and cross-channel analytics to find out the answer looking at a sample of recent Twitter conversation. In the past seven days, there were 203,673 posts about #JustDoIT tweets with the top-25 posts from accounts with the largest reach generating 16.4 million impressions, $98.6k in value and 44.1% average sentiment score (SAP scales runs from -100% to 100%). Mack posts generated 86,951 tweets with the top-25 posts generating 3.1 million impressions, $18.5k in value, and 28.2% average sentiment.  There is little doubt that the #JustDoIt conversation had significantly more posts than the Khalil Mack news. This clearly shows that off-field considerations are critical for strategic decision making by sports industry leaders. More specifically, an athlete’s off-field star power can generate significant value for a corporate partner or team even if he / she is not playing well (or in Kaepernick’s case at all).  Nike’s new deal with Kaepernick clearly demonstrates that point. Kaepernick’s jersey has consistently been a top seller among  NFL jerseys  even when he was not playing. Nike is the official uniform and apparel provider for the NFL, and its core business is sports apparel. The fact that Kaepernick is not playing, yet he is still generating these sales is a feature rather than a bug of this decision making process. Nike knows that Kaepernicks’ on-field performance is not required for him to resonate with many of its customers. Therefore, it can be confident that Kaepernick can drive value now and in the future for the company even if Kaepernick does not take another NFL snap.  Looking at jersey sales data and social media conversation for Kapernick is an important data point in examining this relationship. While the conversation around Nike has been generally positive, there has also been a significant backlash from many  Nike customers and NFL fans . Yet, both the sales data and conversation show that Kapernick is resonating with the company’s key demographics.   This does not mean that a team should sign Kaepernick simply because he has demonstrated he can drive partnership revenue while not paying. It also does not mean that on-field performance is not important for corporate partners. Anheuser-Busch (AB) is specifically implementing a performance clause in its partnership agreements. However, AB is specifically implementing this clause because it sees higher beer sales when its rights holders it partners with  perform well . That is why the Nike and AB deals can be viewed in a similar light. Both deal types were made and are structured in part to help drive tangible revenue growth.   The comparison of these two leading headlines clearly shows teams that corporate partners are not solely looking at a team’s or athlete’s on-field performance. They want to know if a relationship with an athlete, team or league will drive tangible business and brand results. That is why we incorporate both on-field and off-field considerations when evaluating player performance in our  Revenue Above Replacement  model.  Corporate partners are often willing to engage with stars because they drive success for their business if not always for their teams.

BY ADAM GROSSMAN

#JustDoIT vs. Khalil Mack

The two biggest storylines to emerge in the days before the NFL season kicks off involve both on-field and off-field narratives. The first is the trade of All-Pro linebacker Khalil Mack to the Chicago Bears from the Oakland Raiders. The second is Nike announced free agent quarterback Colin Kapernick as the featured spokesperson for the 30th anniversary of the company’s signature “Just Do It” (#JustDoIt) campaign and is reportedly providing him with his own signature shoe and apparel line. The fact that both of these events happened within days of each other created an interesting question. Would the most important on-field event (Mack’s trade) or the most important off-field event (Kapernick’s new Nike relationship) generate more interest?

       Taking The Sponsorship Bull By The Horns For Non-Endemic Partners   BY ADAM GROSSMAN     

 
   
     
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
     
   
     

 
   
     
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
     
   
      One of the most common issues in sponsorship today is that properties / rights holders (teams, leagues, events, athletes, etc.) for non-traditional sports want to attract non-endemic partners. Conversely, non-endemic partners want to determine if they should sponsor new properties to generate lifts in meeting their revenue and brand goals.  The solution to this problem is fit and communicating fit through data. More specifically, what is a property’s value in helping a sponsor reach the right people in the right way at the right time to generate lifts in sales and engagement. Right people, way, and time will differ for each company but the process should be consistent. More specifically, is the property putting the company in the best position to achieve success to be “right.”  The Professional Bull Riders (PBR) has accomplished this goal. A recent study by the organization  showed , “58% of PBR fans have made a brand purchase from a company in the past year because it sponsors [PBR].”  PBR tagged Cooper Tires in the Tweet announcing this news and that is probably not by accident.  PBR has multiple  national endemic sponsors  including Wrangler, Boot Barn, and Priefert (rodeo and ranch equipment). For the organization to continue to grow its sponsorship revenue, however, it needs to demonstrate that it can drive sales for companies like Cooper Tires.  The organization’s study shows that a majority of fans are making purchasing decisions because a company sponsors PBR. Maximizing the probability of sales lift (i.e. working with an organization that drives purchasing behavior through positive brand associations) makes it easier for a company like Cooper Tires to become a sponsor of the PBR.   The PBR’s partnership with Monster Energy is further proof that non-endemic sponsors can benefit from a relationship with the organization. In a separate study, the PBR  found that  “12% of US population and 20% of PBR fans consume energy drinks; 49% of PBR fans are likely to buy [Monster Energy].”  Once again, the PBR is clearly articulating the way it drives value for its partner’s customers. In this case, Monster has a clear and credible rationale for its partnership with the PBR. It puts the organization in front of people that are not only more likely to buy energy drinks but also are likely to buy the specific brand.  The common factor in both of these studies is data. In particular, the PBR is using data to eliminate economic asymmetric risk for non-endemic corporate partners. What does this mean in English? Monster is a good example of this concept. Its partnership with the PBR fits in well with other relationships with NASCAR and UFC from a brand perspective. It can more easily see the PBR’s activation and measure the alignment with its brand goals.   However, how can Monster be confident that it is maximizing its probability of generating revenue through a PBR sponsorship? By communicating clear, tangible economic results specific to these companies, the PBR is enabling partners like Monster to eliminate this risk. It is providing statistical evidence that Monster (or Cooper Tires) can generate top-line revenue growth by partnering with the organization.  B6A’s  Partnership Scoreboard  is designed to specifically to help our clients communicate these types of insights. Our  machine learning platforms  and proprietary valuation models aggregate and analyze information from multiple channels to show specific companies how they achieve value from specific partnership opportunities. Our dashboard puts the data in language that buyers and sellers of sports sponsorship can clearly understand to make strategic decisions. By eliminating the asymmetric risk in sponsorship, B6A products enables properties and companies to maximize revenue growth and brand engagement. 

BY ADAM GROSSMAN

Taking The Sponsorship Bull By The Horns For Non-Endemic Partners

One of the most common issues in sponsorship today is that properties / rights holders (teams, leagues, events, athletes, etc.) for non-traditional sports want to attract non-endemic partners. Conversely, non-endemic partners want to determine if they should sponsor new properties to generate lifts in meeting their revenue and brand goals. The solution to this problem is fit and communicating fit through data.

       Irrational Fans Are Good For Sports   BY ADAM GROSSMAN     

 
   
     
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
     
   
     

 
   
     
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
     
   
      In a finding that is likely unsurprising to most in the sports industry, a recent study completed by two University of Sussex economists found that sports fans are irrational in their support of teams.  More specifically , “that the happiness that fans feel when their team wins is outweighed – by a factor of two – by the sadness that strikes when their team loses.”  What may be more counterintuitive is that these results likely are a good thing for the sports industry as a whole and sports sponsors in particular. How could that be possible when teams are making their customers unhappy?  First, let’s delve more deeply into the study itself. The economists focused on soccer matches in England and used a mobile device app to interact with study participants. The app would send notifications at different times throughout the day with different questions and participants would record their responses. Participants were asked to rate their happiness on a zero to one hundred scale (with one hundred being most happy). The economists used geolocation data through the mobile app to determine when fans were at stadiums versus other locations. They then compared responses for when fans were watching games (either in-stadium or at home) as compared to other activities.  While fans did experience happiness when their team won, the pain of a loss was much more severe. This is consistent with  loss aversion theory in behavioral economics  where people consistently exhibit similar results across a wide variety of tasks. What was surprising to the economists is that a loss by a fan’s favorite team had the second worst score on their scale with only  taking care of an aging parent  being worse.  The economists considered sports fans irrational because they were not maximizing their utility. In this case, fans were not maximizing their happiness and / or well-being by watching sports because teams lose either more or almost as much as teams win and losing makes fans so much more unhappy than winning makes them happy.       These results again beg the question of how could losing be good for sports teams. As we discuss in our book  The Sports Strategist: Developing Leaders for a High-Performance Industry , all sports teams are going to lose and winning does not guarantee financial success.  Sports teams more consistently achieve financial success by creating authentic engagement and connections with their fans. We provide several examples of sports organizations that have achieved success using this approach even when they were losing such as the Chicago Cubs, Toronto Maple Leafs, and Golden State Warriors.  More recent sports sponsorship examples include the  Cleveland Browns  “Victory” fridges partnership activation with Anheuser-Busch and the  New York Jets  partnership activation with Marvel which current features the Incredible Hulk. Both teams have had their on-field struggles which seem to make it difficult to engage their fans.  Both teams also appeared to have completed audience analysis of their fans and created activations that enhance both the team’s and partner’s brand perception. With the Browns, the team turned its losing into a unique opportunity to create “Victory” fridges filled with Bud Light that open when the team wins its first game. With the Jets, the team’s identity is focused on the color green and portraying strength as the team goes into “battle.” Almost exactly the same thing could be said about the Incredible Hulk. Having the Marvel character as a bobble head creates a unique giveaway that resonates with Jets fans even if the team loses.  While the economists did examine three million data points across hundreds of thousands participants, the study featured in the early part of this post does have some potential flaws that the authors themselves discuss. They only examined British soccer fans, mobile app users tend to be younger and more affluent than the general population, and self-reported measures of happiness can be unreliable. The economists  did take measures  to prevent issues with self-reported measures, but it is clear that some caution should be given to the results of the study.  However, the paper’s title of “ Is Football a Matter of Life and Death - or Is It More Important Than That?”  is a good summary of the competitive advantage for the sports industry. It is difficult to think of another industry where a company’s main product could fail (i.e. sports teams not win) at such a high rate and the company could retain most of its customers. Many (if not most) sports fans are extremely passionate about their teams whether they win or lose. These fans continue to engage with their favorite teams even though it is not “rational”.

BY ADAM GROSSMAN

Irrational Fans Are Good For Sports

In a finding that is likely unsurprising to most in the sports industry, a recent study completed by two University of Sussex economists found that sports fans are irrational in their support of teams. More specifically, “that the happiness that fans feel when their team wins is outweighed – by a factor of two – by the sadness that strikes when their team loses.” What may be more counterintuitive is that these results likely are a good thing for the sports industry as a whole and sports sponsors in particular. How could that be possible when teams are making their customers unhappy?

       Anheuser-Busch, Browns Unlock A Winning Sponsorship Opportunity   BY ADAM GROSSMAN     

 
   
     
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
     
   
     

 
   
     
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
     
   
      The only thing arguably better than beer is free beer. That is exactly what Anheuser-Busch (AB) and the Cleveland Browns have  announced  with their most recent sponsorship activation. Starting yesterday, Anheuser-Busch is “placing eight-foot ‘Victory’ fridges filled with Bud Light bottles into 10 Cleveland-area bars that purchased them. When the clock strikes zero on the Browns' first win the electromagnet that keeps the fridges locked will be turned off through a WiFi connection, opening all of them for fans to enjoy free of charge.”  Anheuser-Busch likely understands that many of its customers are NFL fans. It is one reason that Bud Light is currently the official sponsor of 28 out of 32 NFL teams and of the NFL itself. In addition, B6A has highlighted in previous  posts  that being an exclusive sponsor of sports rights holders can increase revenue particularly for large events such as the Super Bowl.  However, category exclusivity should not be the only way that companies generate value through these partnerships. What brands are looking for is to find unique ways to activate sponsorships that drive customer engagement and increase brand perception. More traditional activations may have more difficulty in driving interest to core customers in the ways they are looking to consume content.     That is exactly what this activation between AB and the Browns (who are a B6A Client) accomplished with the Victory fridges. The only team that would have the opportunity to have this type of partnership is unfortunately the Browns (because the team did not win a game last season and only won one the season before). Therefore, there is real interest about when the Victory fridges will actually open. The only beer company that could take advantage of this situation is AB because the company is the official sponsor of the team.  B6A is already seeing the results of this activation through Twitter results from our  Social Sentiment Analysis Platform (SAP)  since Tuesday. A sample is provided below with B6A’s value calculations factor in both sentiment and engagement on a per post basis into the final results. This includes:   Earned media - Darren Rovell has multiple tweets that have generated $18,672.34 of value with 1,540,927 impressions.  Owned and Operated  Bud Light – Multiple tweets that have generated $1,235.77 of value with 101,982 impressions.   Browns – One tweet that has generated $4,601.47 of value with 379,734 impressions.     Even with the initial positive results, this was not an easy decision for either side of this partnership. AB has very publicly stated that the  company  wants to incentivize its partners based on their on-field, on-court, on-ice, etc. performance given that winning leads to higher sales and consumer engagement. Even though it expects to perform much better this year than in the previous two years, the Browns do not want to emphasize how they struggled in the past. The Victory fridges seem to do the exact opposite of what both AB and Browns would want to highlight.  Yet, this decision is the right one for both sides of this partnership. AB shows that it will work with the team to determine new ways to activate that help the company achieve its goals even when the team’s on-field performance is struggling. The Browns show how the team can leverage losing to create new activations while also taking advantage of winning when the team does perform better. Bringing beer to fans enables both the team and its partner to celebrate victory even before the Browns win a game.   

BY ADAM GROSSMAN

Anheuser-Busch, Browns Unlock A Winning Sponsorship Opportunity

The only thing arguably better than beer is free beer. That is exactly what Anheuser-Busch (AB) and the Cleveland Browns have announced with their most recent sponsorship activation. AB and the Browns found a unique ways to activate a sponsorship that drives customer engagement and increases brand perception.

       Sponsorship Is Key To Esports Industry’s Growth   BY ADAM GROSSMAN     

 
   
     
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
     
   
      Esports industry revenues are expected to  grow  from $655 million in 2017 to $905.6 million in 2018 with 40% of those dollars coming from sponsorship. Despite this success, potential esports sponsors still have several questions particularly from companies that are non-endemic to the space. As Seven Leagues senior consultant Charlie Beall  states , “You can sponsor players, who are often young and commercially naïve; a team, whose managers who are equally young and commercially naïve; or a competition, which have few trustworthy and established players.”  Some of these concerns articulated by Beall are rapidly diminishing as seen most recently by the success of Activision Blizzard’s Overwatch League (OWL). After  selling  12 franchises to industry leaders including New England Patriots owner Robert Kraft, New York Mets COO Jeff Wilpon, and Los Angeles Rams owners Stan and Josh Kroenke for $20 million and selling out the Barclay’s Center for the OWL finals, Activision Blizzard franchises are now being sold for $30-60 million. OWL also recently announced a new  broadcast rights  deal with ESPN to complement its $90 million, two-year deal with Twitch.  While esports continues to mature in its development, the OWL does highlight a challenge to its future growth. Much of the revenue articulated in the OWL example is accrued by Activation Blizzard as the game publisher of Overwatch. Game publishers  receive  the bulk (if not all) of the franchise, streaming, and broadcast fees for esports leagues rather than having that revenue shared among the teams as is the case with most other professional sports leagues.  For esports franchises and athletes to be successful, they must be able to sell sponsorship to both endemic (i.e., those with natural ties to esports) and non-endemic sponsors. The main question for non-endemic sponsors is why are esports valuable to my specific business. As managing director of M&C Saatchi Sport & Entertainment Jodie Fullagar  states , “Not all brand sponsorship decisions are solely based on reach, but to get bigger budgets, esports will need to understand the value beyond eyeballs.”  Block Six Analytics (B6A) currently works with multiple esports teams to specifically answer this question. We use the technology and analytics in our  Partnership Scoreboard  platform to show non-endemic partners why working with an esports team would or would not be a good fit for their brand.  This starts with employing our Corporate Asset Valuation (CAV) model to map out each partner’s brand and revenue goals on to a specific esports activation. We then look to see how esports activations can help a company generate new revenue and / or better engage with target demographics. The goal here is to clearly demonstrate how a specific company generates specific value from a specific opportunity.  By mapping out a company’s goals and specifically demonstrating how an esports activation helps partners achieve these goals, the CAV helps franchises, players, and their partners see how value is created in esports activations. This enables rights holders to demonstrate to a non-endemic partner how a company will benefit from a relationship while non-endemic sponsors can clearly evaluate if this opportunity makes sense for their business.  Reach is still an important component of an esports sponsorship. It is better to reach a larger number of a company’s key demographic when possible. B6A’s integration with Twitch’s public API determines audience size on a minute-by-minute basis. We then use our  Media Analysis Platform  (MAP) to determine the value resulting from brand logo exposure in streaming video on the platform within 72 hours after a game, event, or series.  Logo exposure is only one potential activation for esports franchises and players. Social media conversation, social branded integration in image and video, earned media conversation, in venue, experiential marketing, and corporate hospitality activations can best be monetized by franchises and players if partners understand their value to their specific businesses.   If this seems like a similar approach to that which B6A uses for other professional rights holders that is because it is a similar approach. The core question of why a company wants to work with any rights holders are the same in esports as they are with any rights holders. Each company wants to know how each sponsorship helps it meet its revenue and brand goals. For the esports industry to continue its growth, franchises and players will need to be able answer that question.

BY ADAM GROSSMAN

Sponsorship Is Key To Esports Industry’s Growth

While esports continues to mature in its development, the OWL does highlight a challenge to its future growth. Much of the revenue articulated in the OWL example is accrued by Activation Blizzard as the game publisher of Overwatch. Game publishers receive the bulk (if not all) of the franchise, streaming, and broadcast fees for esports leagues rather than having that revenue shared among the teams as is the case with most other professional sports leagues.

       NBA Makes A Good Bet On Gambling Sponsorship   BY ADAM GROSSMAN     

 
   
     
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
     
   
      One of the biggest challenges in the era of big data is monetization. How do you monetize information at a time when so much data is being created? One answer to that question is to find an immediate use case where the information an organization generates addresses a critical business challenge.  That is exactly what the NBA has done in its new deal making MGM Resorts its official gambling partner. This new relationship is generating significant attention because it is the first of its kind in a major professional sports league. Yet, that is really not the most significant component of this deal. It is that the NBA could be providing a blueprint for how leagues can monetize their official data across multiple partnerships.  In a previous  post , I stated that the U.S. Supreme Court’s decision to strike down the Professional and Amateur Sports Protection Act of 1992 (PASPA), effectively making gambling on sporting events legal in the U.S., would benefit sports organizations because it would open new sponsorship opportunities. The NBA’s partnership with MGM is a good example of this new dynamic.  MGM  now has the ability “to use official NBA data and team logos across its domestic resorts and mobile sports-betting apps.” Gambling is reliant on having the most accurate data. Both sides of a betting transaction need to ensure payouts are based on the correct outcome of any event.  It is difficult to argue that the most accurate NBA data could be anything but the “official NBA data” provided by the league. As the NBA’s exclusive gambling partner, MGM Resorts can now position itself to current and potential customers as having the best data both in its casinos and mobile apps.  That provides a distinct competitive advantage and should help MGM Resorts generate incremental growth because of its first-to-market relationship with the NBA. Because legal sports gambling is novel in the U.S., there is a reasonable concern that sports fans would not be sure where to go for gambling to ensure that they are not “cheated” in transactions. Being the first company that has official data enables MGM to alleviate these concerns for NBA bets and maximize the probability of capturing a significant share of the early gambling market.   This is not the only reason that being first-to-market is a key distinction in this new deal. As  The New York Times   explains , “While MGM will be the league’s exclusive gambling partner for marketing purposes, most of the rest of the agreement is not exclusive…The N.B.A. is eager to have every company offering sports betting use official league data and work with league officials to prevent manipulation.” In fact, the NBA already had already signed a six-year data distribution deal with Sportradar and Second Spectrum in 2016 worth a  reported  $250 million over the life of the agreement. Sportradar is arguably best known outside of the U.S. for providing data for and monitoring gambling activity abroad.  Yet, the NBA was also able to sign MGM Resorts to a three-year deal worth a  reported  minimum of $25 million. Why would MGM agree to this deal given the NBA’s previous relationship with Sportradar. Both MGM and Sportradar can credibly say they have official NBA data. However, MGM can only use the data in  its  “domestic resorts and mobile sports-betting apps” while Sportradar can  provide  “data and audio-visual game feeds to gaming operators outside of the United States.”  These two agreements demonstrate how the NBA can monetize the same data in multiple relationships. This is exceedingly rare in the sports industry where exclusive deals mean that only one company can benefit from their relationship with their rights holders. While both MGM and Sportradar derive clear benefits from their relationships with the league, the NBA is arguably the biggest winner. It is a blueprint that other leagues are likely to follow to maximize revenue from gambling partnerships.

BY ADAM GROSSMAN

NBA Makes A Good Bet On Gambling Sponsorship

One of the biggest challenges in the era of big data is monetization. How do you monetize information at a time when so much data is being created? One answer to that question is to find an immediate use case where the information an organization generates addresses a critical business challenge. That is exactly what the NBA has done in its new deal making MGM Resorts its official gambling partner. This new relationship is generating significant attention because it is the first of its kind in a major professional sports league. Yet, that is really not the most significant component of this deal.

       Blockchain’s Potential Impact On Sports Media And Sponsorship   BY ADAM GROSSMAN     

 
   
     
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
     
   
      Even though we have Block in our name, Block Six Analytics is not a blockchain company. However, we do see blockchain technology impacting our business in ways that are likely to surprise many in the sports industry. More specifically, blockchain could alter sports media and sponsorship in counterintuitive ways.  To start, we will give a brief summary of what blockchain is as there several books, documentaries, and articles that can provide a fuller description. Let’s look at the area where blockchain first became famous – currency. For money to change hands, a buyer needs to submit a form of payment (i.e. cash, check, or digital payment) and the seller needs to receive the payment. A clearing house needs to ensure that a transaction only occurs once (i.e., a person does not use the same check for two different transactions) and that both parties can be involved in a transaction. Banks, credit card companies, and digital payments providers (e.g., PayPal) provide this service for a fee as private companies.  Blockchain technology, typically via cryptocurrency, changes this type of transaction. The way that cryptocurrency works is based on everyone in a network having a public and private cryptographic key. The public key serves like the routing and account number on a check. It lets everyone involved in the transaction know that a specific person that is making the transaction and is derived mathematically from a public key. The private key is like your signature on a check. Rather than writing a person’s name, the private key an extremely long series of numbers and letter that only that person knows and is  difficult to determine  by another person or computer. When a transaction occurs, high powered computers are  mining  the network for a new “block” (i.e. receipt of that transaction) by decrypting a “hash” (a complex series of letters and numbers). To incentivize mining in the network, the first computer in the network to successful mine a transaction receives a new portion of currency. Transactions all are recorded in a “public ledger” with unique blocks of transactions that include people’s public keys that can be seen by everyone in the network.      What does any of this have to do with sports? Cryptocurrency enables everyone in a network to trace every transaction by looking at the blocks in public ledgers. In sports, one of the most difficult things to track right now are tickets. When a team sells a ticket, it is a challenge to determine if a person used the ticket, sold the ticket on the secondary market (i.e., StubHub or SeatGeek), gave it to a friend, or did not use it at all. Advances in digital ticketing and Major League Baseball’s new relationship with  Clear  make this significantly easier. In particular, scanning tickets on a phone or letting fans “enter stadiums using fingerprints, and eventually, just their face, instead of tickets” makes it much easier for teams to track whom and when someone is using a ticket.  However, this still requires fans to opt-in to a team’s specific ticketing platform or to participate with a vendor like in Clear. If that does not occur, then a team will still have difficulty tracking a transaction, particularly if it occurs outside of its network. Blockchain for tickets will eliminate these issues because all transactions would be public and decentralized. Every team (and potentially their sponsors) could see every part of the transaction through the public ledger and track each part of the ticket’s journey through a block. This would potentially eliminate counterfeit tickets and payment processing because each ticket would be tracked no matter where it is sold. There are several  companies  currently exploring how to apply blockchain technology to tickets but are still in early stages.  Yet, ticketing may not be the most interesting application of blockchain technology in sports. In his recent book     Life After Google: The Fall of Big Data and the Rise of the Blockchain Economy  , George Gilder argues that Google has helped to lead to the creation of the “aggregation and advertising” model as the primary way to monetize content. The reason is that there is so much content it is difficult to know who is consuming it or when it is being consumed at any time. In addition, people are not charged by the amount of content they consume. Therefore, content has ads in the form of banners, pop-ups, pre-roll, mid-roll, etc. that interrupt the experience or audiences have to go through an inefficient process to pay for content.  Sports is extremely susceptible to this problem particularly when comes to watching games. Historically, much of sports content has been free. The traditional way to consume a game is to have it “interrupted” by ad breaks or the “Playing Through” concept seen in NBC’S broadcast of the British Open where ads are run next to a live broadcast. In addition, customers of cable or satellite companies are not happy with the increase in their bills to pay for sports they may or may not be watching. As more content moves to digital and / or over the top (OTT) channels, consumers have to go through paywalls where people typically have to fill in their credit or banking information, pay a flat fee, and wait for the transaction to process.  Blockchain technology would eliminate most if not all of these issues with sports media in a way described in more detail in Gilder’s book. He states that Blockchain technology would enable the currency to become the “messenger” of content. More specifically, content would essentially contain an embedded code then, when accessed, would automatically charge the consumer. The transaction would be recorded in a public ledger in block format automatically and be tracked in a similar form to the way currency is tracked as described above.  Knowing and generating revenue for the content that people actually consume could be a boon to the sports industry. Sports content is still in high demand as demonstrated by how many of the  top-watched programs  every year are sporting events. Rights holders can not only charge people every time they consume content but also track exactly where the content is seen. This would make it extremely efficient to remove any illegal broadcasts or streams of content because teams, leagues, etc. would know exactly where that activity is occurring by examining the public ledger. In addition, audiences would have an easier time accessing content they want while watching shorter games because there would be less need for ad breaks. This likely would increase the number of people watching sporting events and increase revenue for rights holders and / or broadcasters as games become more popular over time.    Counterintuitively, this likely makes traditional sponsorship more valuable. Sponsors still want to reach large audiences that are engaged in content. If commercials are limited or eliminated completely then companies will need to activate within the content itself. Sports is already in position to do this via stadium signage and jersey logo activations. More specifically, sports audiences are already accustomed to seeing company signage and logo activation when watching games. It is not clear if that would be the case with other entertainment content as product or logo placements have received  mixed reviews . Therefore, “traditional” sponsorship can potentially be the most “lucrative” asset in a blockchain content world.  Blockchain is still in its very early stages, both inside and outside of the sports industry. We are still a long way from blockchain impacting ticketing sales let alone media and sponsorship. However, blockchain does provide the opportunity for sports organizations to develop novel solutions to many of the industry’s most pressing challenges.

BY ADAM GROSSMAN

Blockchain’s Potential Impact On Sports Media And Sponsorship

Even though we have Block in our name, Block Six Analytics is not a blockchain company. However, we do see blockchain technology impacting our business in ways that are likely to surprise many in the sports industry. More specifically, blockchain could alter sports media and sponsorship in counterintuitive ways.