Loss Aversion’s Impact on Coaching and Sponsorship  BY ADAM GROSSMAN     

 
   
     
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
     
   
      A recent  The Wall Street Journal    (WSJ) post contained the provocative headline “Football Coaches Are Still Flunking on Fourth Down”. This post demonstrates how NFL coaches are “still too conservative on fourth down” because they instruct their teams to punt or kick a field goal when the math states that going for it actually increasing the chances of winning a game.   This post is particularly surprising because research has been done on this specific topic for years. It is now so clear from a mathematical perspective when to go for it that New York Times (NY Times) created the NYT4thDownBot. Why would coaches, as former NFL coach and current Arizona State University coach Herm Edward said, not “play to win the games?”  Increasing risk by making conservative choices is actually a common occurrence both inside and outside of the sports industry. In fact, it is arguably the driving force behind the creation of the field of behavioral economics and two recent and famous noble prize winners in the field (Richard Thaler and Danny Kahneman).   The critical insight of behavioral economics is that people frequently do not make decisions that maximize their utility. One of the most common reasons for this is loss aversion where people place much more significance losses than they do on gains. For example, the joy of winning a game by 1 point and pain of losing a game by 1 point should be equal. Most sports fans believe (and  research confirms ), however, that losing game by 1 point feels much worse than winning a game by 1 point.   Loss aversion is likely the primary reason that coaches still make conservative choices on fourth down. The WSJ post states that taking the mathematically optimal approach to fourth down adds 0.4 wins per season as compared to the conservative choice. As context, Block Six Analytics’ (B6A)  Revenue Above Replacement  (RAR) found that wide receiver Antonio Brown contributed 0.34 wins throughout the course of the 2018 season.   So why do coaches not go for it when it can impact a season more than player such as Brown? The narrative around fourth down plays is often that they are the deciding plays of a game. In particular, owners, general managers, and fans have traditionally (and often still do) see failures on fourth down when going for it as the specific reason a team lost a game.   That is particularly important because a coach’s highest priority is frequently job security. While winning games is often the best way to maintain job security, it is not the only way. Avoiding blame from “risky” decisions is another. Coaches rarely receive blame by not going for it on fourth down by owners, general managers, and fans for taking the conservative approach because nothing is “lost” from their perspective. Therefore, the conservative choice makes sense for coaches since the perception of losing one game has more significance than the reality of 0.4 wins during the season using the optimal approach.   Using the loss aversion frame can also be applied to the sponsorship industry as demonstrated in a  John Wall Street  post on Endeavor Audio and podcasts. The post states that podcasts receive a “fraction” of the revenues that brands spend on television advertising because podcast “listener numbers are not yet comparable to the television viewing audience.”   However, the post later states that “podcasting also gives advertisers the ability to reach a younger demographic with +/- 50% of millennials and Gen-Zs now listening to on-demand audio content.” In addition, 35% of  podcast listeners  have incomes of over $100,000. As context, our  Audience Inference Platform (AIP)  found that 22% of the population overall has incomes over $100,000.  Research  has also shown that 80% of podcast audience listens to all or most of an episode.   Yet, decision-makers at companies will often examine sponsoring podcasts from a loss aversion perspective. In this case, the conservative approach is to spend advertising on television while optimal approach is to sponsor a podcast. However, being optimal is not enough to drive a decision because the gain of the right audience in a new channel is often perceived as not as significant as the potential loss of audience size in a traditional one.     This makes a podcast recommendation the risky choice even if it is the right one. The best way to change this dynamic is to understand this challenge and arm people with the tools and language to address potential loss aversion issues. B6A’s uses our  Corporate Asset Valuation Model  (CAV) and  Partnership Scoreboard  to achieve this result.    In the podcast example, many companies are looking is to more effectively reach young, affluent demographics with engaging content. The CAV shows quantitatively what lifts in brand engagement, sentiment, and awareness when reaching this demographic through podcasts have on maximizing revenue growth. The model also shows why maximizing audience size is not always effective and why companies our losing value by focusing solely on this metric. We then create insights in our Partnership Scoreboard using words, videos, images, and data that provide a clear narrative that resonates with an organization’s senior leadership to address loss aversion concerns.   In a recent Tweet, Thaler  stated  that the NY Times “bot is way better than any coach” in determining when to go for it on fourth down. For the foreseeable future, however, people are going to make important choices that impact sports organizations on and off the field. Understanding how people make decisions can help minimize loss aversion challenges and maximize the likelihood of making the right choice.

BY ADAM GROSSMAN

Loss Aversion’s Impact on Coaching and Sponsorship

A recent The Wall Street Journal (WSJ) post contained the provocative headline “Football Coaches Are Still Flunking on Fourth Down”. This post demonstrates how NFL coaches are “still too conservative on fourth down” because they instruct their teams to punt or kick a field goal when the math states that going for it actually increasing the chances of winning a game. This post is particularly surprising because research has been done on this specific topic for years. It is now so clear from a mathematical perspective when to go for it that New York Times (NY Times) created the NYT4thDownBot. Why would coaches, as former NFL coach Dennis Green, not “play to win the games?”

      American Express Appears To Value Experiences Over Reach With New Title Sponsorship  BY ADAM GROSSMAN     

 
   
     
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
     
   
      American Express  announced  a multiyear title sponsorship deal that changes the name of the PGA Tour event most recently called The Desert Classic to The American Express. The primary reason the company appears to be returning as a title sponsor for the first time since 2006 appears not to be what many people expected.  In a past post on the recently-named  Allegiant Stadium , we discussed how Allegiant Air would leverage its new naming rights deal with the Las Vegas Raiders for two reasons. The company wanted to maximize brand awareness in multiple, target markets while also creating unique experiences for its targeted customers (leisure fliers). Emphasizing both reasons was a change in the standard approach to naming rights. Maximizing brand awareness, rather than creating unique experiences, had typically been considered the primary value driver for these deals.   The American Express deal appears to be different than Allegiant in that unique experiences are now the primary value driver. Chairman and CEO of American Express Stephen Squeri  called  the new partnership a “perfect match” because “golf consistently ranks as one of the top passions of our Card Members, and the TOUR provides some of the most exciting experiences at some of the best venues the game offers. We’re looking forward to making The American Express a ‘must-see’ event for fans and Card Members alike.”  American Express appears to be building on an experience-driven strategy that has been honed from its successful  U.S. Open  partnership. Why focus on experiences rather than reach? Companies, particularly the size of American Express, recognize that there are more options than in the past to reach a large number of people through partnerships within or outside of sports. This makes reach less valuable as increased supply can reduce overall demand.   It is also often more frequently easier to measure reach. For example, partners and properties can relatively easily obtain television ratings, social media followers, digital traffic, and event attendance to determine how many people they have reached with sponsorship activations. The old adage of what gets measured gets managed applies to sponsorship valuation.    Yet, what partners are finding is that reach is not always the best reflection of ROI. The goal now for many partners is to increase engagement with targeted audiences that can drive specific business outcomes for companies. This has led partners to want to quantify the tangible business impact of engagement and experiences in non-traditional channels and platforms where there are a relatively small number of impressions.   Block Six Analytics’ (B6A)  Corporate Asset Valuation Model  (CAV) accomplishes this goal in a clear and concise way. The CAV examines fit, sentiment, and engagement to determine the value of a partnership in addition to overall reach. From a fit perspective, companies typically want to reach the demographics that can or will drive revenue most effectively. Experiences, like The American Express tournament or the U.S. Open, will reach a relatively small number of customers.   However, American Express likely has discovered that its best customers really value these events. These customers are worth more to a company than its average customers or the average person. Providing access to the experiences that align with the “top passions” of these card members, such as through professional golf and tennis events, creates product and brand differentiation in market with large competitors.  Customers also value experiences because they usually feature engaging and interesting content. B6A’s proprietary research has shown that reaching people in ways that increase brand engagement, sentiment, and awareness have statistically significant correlation with increases in revenue. This is another important and quantifiable way that companies can attract and retain their best customers even without reaching the largest number of people.   There is a reason we focused on a new title sponsorship for this post. Title sponsorships and naming rights deals have in the past focused on value creation by maximizing reach. If partners are now focusing on experiences even with these types of deals to better reach the right customers then it is likely they are using the same lens to evaluate other sponsorship opportunities. Having the tools to measure and communicate fit and engagement will be critical to understanding value for future sponsorship activations.

BY ADAM GROSSMAN

American Express Appears To Value Experiences Over Reach With New Title Sponsorship

American Express announced a multiyear title sponsorship deal that changes the name of the PGA Tour event most recently called The Desert Classic to The American Express. The primary reason the company appears to be returning as a title sponsor for the first time since 2006 appears not to be what many people expected.

      What’s In A Name? Examining The Value Of Ovi O’s and Flutie Flakes  BY ADAM GROSSMAN     

 
   
     
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
     
   
      One of Shakespeare’s most famous passages comes from a soliloquy in  Romeo and Juliet  where Juliet  says ,  “ What’s in a name? That which we call a rose by any other name would smell as sweet .”  While it has been used in a business context as a frame to analyze everything from baby names to books, this passage arguably applies best to asking what is the importance of a name to company or product success in brand differentiation and revenue generation.   The  announcement  of a new cereal called Ovi O’s featuring the name of Washington Capitals forward Alexander Ovechkin by Giant Foods earlier this is a good example to answer this question. Giant is “the leading greater Washington D.C. regional grocery chain and official grocery sponsor of the Washington Capitals.” Giant is releasing Ovi O’s on the NHL star’s birthday on September 17th and will continue to sell the cereal “while supplies last.”  Supplies may not last long. In 1998, PLB Sports introduced Flutie Flakes named after then Buffalo Bills quarterback Doug Flutie. This seems to be a fool’s errand. Flutie Flakes had many similar qualities to Kellogg's Frosted Flakes and likely had a much smaller promotional, marketing, and advertising budget. As then general manager of Marketing Intelligence Service, Ltd. Tom Vierhileat  said  at the time, “Not only is the cold cereal market a mature market dominated by a handful of very large companies, there's also been a general decline in sales of ready-to-eat cereal.”   Yet, Flutie Flakes sold over  three million boxes  at Wegmans, Tops, Wal-Mart, Kmart, Walgreen and “ dozens  of independent retailers.” This vastly exceeded the original expectation that 50 thousand boxes could be sold. The cereal was so popular that two brand extensions were created - Flutie Flakes Chocolate Bars and Flutie Fruities. Flutie Flakes Chocolate Bars demand exceeded its 150 thousand bar initial production run causing the manufacturer to  make  350 thousand more bars.   So why were Flutie Flakes so successful? We have shown in  past posts  and using our  Intellectual Property Analysis Platform  that business-to-consumer (B2C) companies operating in mature markets can use sports intellectual property (IP) to drive business results. Flutie Flakes further demonstrates this point. A significant differentiator from a product perspective between Flutie Flakes and Frosted Flakes is the name of the cereal and likeness / image of Doug Flutie on the boxes. Yet, this difference appears to be a driving force for Flutie Flakes to achieve success in a mature market.   Giant Foods likely hopes for similar results with Ovi O’s but with a new twist. In this case, Giant Foods operates in two mature, highly competitive environment markets – cold cereals and grocery chains. Ovi O’s are a “honey nut cereal” that has a similar look and flavor profile as General Mills Honey Nut Cheerios as Flutie Flakes had with Frosted Flakes. The Ovi O’s brand should differentiate the product in the cold cereal market in a comparable way to Flutie Flakes.   However, Ovi O’s will likely only be sold in Giant stores rather than in multiple different retailers like Flutie Flakes were in 1998. This gives grocery customers a new reason to shop specifically at Giant rather than other chains in that operate in the D.C. area such as Safeway, Whole Foods, or Walgreens.  To be clear, it is not solely name that is likely driving sales of these products. Both had (with Flutie Flakes) or will (with Ovi O’s) feature limited releases of the products in markets where the players competed. In addition, portions of the proceeds benefit charitable causes (autism and children’s cancer, respectively). These factors had or will have an impact on sales.   However, limited releases and charitable contributions are likely not the main factors that drive revenue. The imminent release of Ovi O’s is particularly notable because of Giant’s decision to partner with Ovechkin over a season removed from when the Capitals won the Stanley Cup. One could argue that Giant missed its window to work with Ovechkin on this type of product.   Research from our  Revenue Above Replacement  (RAR) model, however, has shown that star power is a more consistent variable than on-field performance. Essentially, once athletes become stars that audiences see them as stars even if on-ice, on-field, or on-court performance declines.   Flutie Flakes success reinforces this idea as sales remained strong even when the team was losing in large part because of Flutie’s star power. As Melissa then director of marketing for PLB Sports (the company that produced Flutie Flakes)  stated , “When the Bills lose games, we expect the sales to die off, but they don't. The retailers keep placing orders and the calls keep coming from people who are looking for them.” Flutie Flakes were also re-introduced in 2008 for a 10th anniversary special given the product’s popularity even though Flutie had retired in 2005 after multiple non-descript seasons primarily as a backup quarterback.    Obviously, Shakespeare did not have cold cereals in mind when he wrote  Romeo and Juliet . However, Juliet was “wrong” that a “rose by any other name would smell just as sweet” at least when it comes to using sports IP in targeted contexts. Names, particularly of star athletes, have the power to help the right companies and products generate increased demand through brand differentiation.

BY ADAM GROSSMAN

What’s In A Name? Examining The Value Of Ovi O’s and Flutie Flakes

One of Shakespeare’s most famous passages comes from a soliloquy in Romeo and Juliet where Juliet says, What’s in a name? That which we call a rose by any other name would smell as sweet.” While it has been used in a business context as a frame to analyze everything from baby names to books, this passage arguably applies best to asking what is the importance of a name to company or product success in brand differentiation and revenue generation.

      Varsity Greens: Lessons Learned From Texas High School Naming Rights Deals  BY ADAM GROSSMAN     

 
   
     
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
     
   
      Everything is bigger in Texas, and high school stadium naming rights deals are no exception. A recent  The Dallas Morning News  post highlighted how Independent School Districts (ISD) in Texas now command millions of dollars over the term of naming rights agreements for their venues. While these deals should drive significant value for partners, it is likely not for the reasons that most people expect in two ways.   First, “bigger” can be misleading when it comes to these deals. Conventional wisdom is likely that larger naming rights agreements are signed because Texas high school stadiums are more expensive and have a larger capacity than other high school districts throughout the country.   Yet, what is “bigger” is typically what happens outside of the venue. For example, the 12,000-seat Children’s Health Stadium at Prosper ISD is a featured stadium in the post. While 12,000 is certainly a large number of seats for a high school venue, it is a relatively small audience size as compared to the amount of people consuming high school sports content in traditional, social, and digital media channels   We highlighted the importance of reach outside the venue when evaluating naming rights deal in a  previous post  examining the Cleveland Browns partnership with FirstEnergy. In this example, we used our  Social Sentiment Analysis Platform  (SAP) to show how FirstEnergy generated new earned media impressions when national, regional, and local news outlets covered the Browns. In addition, celebrity influencers (in this case WWE Superstar Mike “The Miz” Mizanin) posted content about FirstEnergy that resonated extremely well with targeted demographics.   Having unique ways to increase engagement with a company’s customers leads to the second way that Texas high school naming rights deals can have a “bigger” partnership impact. A question B6A often receives from high school or youth sports practitioners is how can our organizations attract partners if companies can sponsor larger professional, collegiate, or high school properties to obtain reach.   Our response is to implement the concepts central B6A’s  Corporate Asset Valuation  Model (CAV) and its focus on the fit and engagement in addition to reach to communicate partnership value. In particular, high school naming rights deals can deliver significant value on fit and engagement metrics.   B6A conducted research using our SAP platform to help prove this case. We found that high school sports activations can disproportionally reach both parents and children in higher-income families as compared to what companies reach on their own or through other types of activations. We also have seen targeted-high school and youth sports content generate as much as 99% higher engagement rates than social media posts from large properties such as ESPN.   Engaging the right people in the right way with the right message that will help generate lifts in revenue and brand goals is now equally, if not more, important than reaching the largest numbers of people for many companies. More specifically, high school sports fans are more likely to be customers of the regional and local companies that most frequently partner with high school districts. High schools should use data from naming rights deals to prove this case in similar ways to what was described in the previous paragraph.  That is not to say the audience size is not important. As Market Street Sports Group President of Sales Jeff Bertoni states in the  post , "We've been able to sell [high school] stadiums for 10-year deals, anywhere between $15,000 and $20,000 a year. You have kind of a unique situation going on in Texas, where they're getting multimillion-dollar deals for their sponsorships of their stadiums." One can argue that the unique situation being described by Bertoni is the ability for Texas ISD’s to reach a larger number of people as compared other high school districts outside of the state (i.e. Texas high school sports are “bigger”).  The reason to think this is what Bertoni means is that other high school districts outside of Texas do have similar capabilities to reach targeted demographics using partnership activations common in naming rights agreements. They cannot, however, compete on audience size as Bertoni articulates. The takeaway is that high school naming rights in many geographies are now likely undervalued assets given that they are primarily priced on audience size rather than also including fit and engagement metrics that partners are increasingly prioritizing in these types of deals.

BY ADAM GROSSMAN

Varsity Greens: Lessons Learned From Texas High School Naming Rights Deals

Everything is bigger in Texas, and high school stadium naming rights deals are no exception. A recent The Dallas Morning News post highlighted how Independent School Districts (ISD) in Texas now command millions of dollars over the term of naming rights agreements for their venues. While these deals should drive significant value for partners, it is likely not for the reasons that most people expect in two ways.

      Why Lowe’s Will Leverage NFL IP to Sell League and Team-Branded Merchandise  BY ADAM GROSSMAN     

 
   
     
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
     
   
      Lowe’s announced earlier this week that it  will  begin to “carry more than 10,000 licensed NFL-branded merchandise items.” This includes products with NFL league and team logos for categories such as tailgaiting, “homegaiting”, grills, décor, automotive, pet, and holiday items.    One common question Block Six Analytics (B6A) receives is what is the value of sports properties’ IP rights. In particular, how can both a potential licensor (typically a property) and licensee (typically a company) determine the revenue and brand impact that comes from licensing the marks, logos, likeness, or image of a league, team, athlete, or event.   To answer this question, B6A created the Intellectual Property Analysis Platform (IPAP) within our  Partnership Scoreboard . IPAP enables us to analyze the expected lifts in top-line revenues, gross margins, and operating margins that can occur from licensing IP.   Examining both Bud Light and Lowe’s NFL partnerships demonstrate how we can apply this type of analysis. Bud Light has used NFL team logos on its cans since the beginning of its relationship with the league in 2015. That  season , “A-B saw volume increases of 3.8 percent…in markets where Bud Light was sold in cans featuring local team logos” as compared to the prior year when no logos were featured on the cans.   Bud Light has generated consistent value from local team logos in following seasons as well. The NFL-licensed cans have now  become  “its most powerful ROI driver” for the brand overall (and not solely from its sports partnerships).   This is particularly notable because this impact on  revenue  is occurring even (or especially) within the “mature beer category.” Bud Light operates in a market with large competitors where brand differentiation is critical but difficult to achieve. One could argue the reason the category is “mature” is that consumers often will often not change consumption patterns and / or see relatively little differences in product quality between competitors.   Having NFL-licensed cans enables Bud Light to have a clear point of differentiation with its competitors in ways that also drive lifts in brand sentiment, engagement, and awareness. This is important because B6A’s proprietary research has discovered a strong correlation between lifts in these brand metrics and positive changes in revenue growth. Both IPAP and our  Corporate Asset Valuation Model  (CAV) incorporates this research to determine the tangible value of using IP using both revenue and brand metrics.  It is likely that Lowe’s factored in Bud Light’s licensing success into its decision to pursue its NFL partnership in  2019 . Lowe’s operates in the very competitive home improvement retailer industry where it is often difficult to achieve differentiation. This is very similar to the challenge Bud Light faces in the mature beer category. NFL-licensed products can have a similar impact on revenue growth for Lowe’s as it did for Bud Light in ways that can be predicted and measured as B6A does with both our IPAP and CAV products.     While we have focused primarily on revenue increases, IP valuation must also factor in cost considerations. More specifically, the reason we use margin analysis with IPAP is that there often significant costs associated with leveraging IP. For example, Bud Light  stated  it has “put a lot behind this” relationship with the NFL including a “massive out-of-home” campaign and a 90-second commercial for the first game of the 2016 NFL season. Lowe’s likely will need to make similar commitments to maximize the benefits of using NFL IP for its product categories.   In addition, we are not to saying the leveraging the NFL license is the only benefit for Lowe’s in this partnership. In our previous post on the NFL-Lowe’s  relationship , we showed how the company will leverage unique experiential marketing opportunities to help facilitate retention for both its more valuable “pro customers” (i.e. contractors that typically work on multiple projects) and its 300,000 in-store associates.   However, Lowe’s more recent announcement focused on NFL-branded merchandise highlights the importance of using sports IP for products as a way to differentiate a company in a competitive market. It is also one clear way that sports partnerships can add tangible value to companies that are difficult for other industries to replicate.

BY ADAM GROSSMAN

Why Lowe’s Will Leverage NFL IP to Sell League and Team-Branded Merchandise

Lowe’s announced earlier this week that it will begin to “carry more than 10,000 licensed NFL-branded merchandise items.” One common question Block Six Analytics (B6A) receives is what is the value of sports properties’ IP rights. In particular, how can both a potential licensor (typically a property) and licensee (typically a company) determine the revenue and brand impact that comes from licensing the marks, logos, likeness, or image of a league, team, athlete, or event. To answer this question, B6A created the Intellectual Property Analysis Platform (IPAP) within our Partnership Scoreboard. IPAP enables us to analyze the expected lifts in top-line revenues, gross margins, and operating margins that can occur from licensing IP.

      What Curt Schilling’s Potential Congressional Run Says About Athlete Influencer Marketing  BY ADAM GROSSMAN     

 
   
     
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
     
   
      One of the reasons that Block Six Analytics (B6A) built our Influencer Platform with our  Partnership Scoreboard  is the power of athletes to resonate with fans as much or more than teams. More specifically, a recent example shows how athletes can secure attention for topics outside of sports and of other influencers to potentially drive audience behavior.  Curt Schilling had been primarily known as one of the best playoff pitchers of his era, winning the World Series MVP in 2001 and helping power the Boston Red Sox to their first World Series Championship in 86 years. More recently, however, he has turned from pitcher to pundit  after  “ESPN fired Schilling in 2016 after he shared an anti-transgender post on Facebook shortly after the state government in North Carolina passed a law that effectively allowed local governments to ban transgender people from using their preferred public bathrooms.”  Schilling is now a conservative talk show host mulling a run for Congress from Arizona (even though he is  currently  “listed as a Massachusetts resident”). He has already “influenced” President Donald Trump to support is potential run calling the idea “terrific.”   The mixture of politics and sports (and President Trump’s policies specifically) has not always been received well. The most well-known recent example comes issues stemming from ESPN for ESPN’s  stating  that the company’s on-air talent should stay away from political discussions unless they are directly applicable to sports. ESPN has evidence that comments like the ones Schilling (and several other current and former ESPN employees with more liberal views such as Jemele Hill and Dan Le Batard) have made have a negative impact on viewers perception of the company and overall viewership numbers.   Yet, Schilling’s potential candidacy can demonstrate the importance of athletes having an impact on influencing behavior outside of sports. In a partisan political environment, the goal of a candidate for either party is to maximize their voter turnout while minimizing voter turnout for their opponent.     The challenge is that many Democratic and Republican candidates have few differences on their policy positions as compared to candidates within their own party as the Democratic presidential primary often demonstrates. This makes it difficult to build voter enthusiasm for on candidate when many people view candidates from the same party as similar. The challenge for candidates is their ability to generate awareness, engagement, and differentiation with voters both early in process and in ways that will drive them to the voting booth on election days.   Arizona is particularly difficult as the once reliably red (conservative) state is turning  increasing blue  (liberal). It would be difficult for almost any Republican to secure the support of liberal and / or moderate voters in this election. A conservative politician (like Schilling) should therefore likely must focus on maximizing conservative voter turnout.   Schilling’s high name-recognition, known views, and support from President Trump (who is extremely popular with conservative voters) create a credible pathway to accomplish these goals. He has already secured the support of arguably the most important current political “influencer” while also being well-known in Arizona for his MVP-winning performance in the 2001 World Series for the Diamondbacks.   The argument could be made that Schilling’s positions will turn-off moderate or liberal voters in Arizona. In  The Sports Strategist: Developing Leaders for a High-Performance Industry , my co-authors and I discuss the importance of targeting the marginal fan. This is a concept derived from the “marginal voter” in politics which states that campaigns should only target the voters that are likely to be persuaded through advertising or campaigning.   B6A used our  Social Sentiment Analysis Platform  (SAP) to analyze the approximately 40 thousand Tweets about Schilling in the hours after Trump’s endorsement for his potential candidacy to evaluate his initial viability as a candidate. We found that:    The posts created 2.39 million impressions.    The posts had an average sentiment of 42.44%.    The posts had an average engagement rate of 1.84%.    B6A’s sentiment score ranges from -100% to +100% with 42.44% being a strong score. From an engagement perspective, we  demonstrated  in a previous post how LUNA Bar achieved a 1.25% engagement rate (a 60.15% over average LUNA Bar posts) when a similar announcement occurred with a new partnership with the US Women’s National Team. This was focused on how LUNA BAR would eliminate the gender pay gap between the men’s and women’s national soccer teams. Schilling related posts exceeded the LUNA Bar level of engagement by 47.20%.   This is one reason why corporate partners are looking to athletes as an important component of influencer strategy. It is not just that athletes can often reach and engage with sports fans that are often companies’ target customers. It is also that the athletes can generate lifts in the outcomes and behaviors even (and especially at times) for outcomes that are non sports-related.  This is not to say B6A’s support Schilling’s positions or his potential candidacy. He has made several statements that many (including us) could or should find to be  offensive . However, Schilling does showcase that athletes can and do have an impact outside of sports. Whether you agree with Schilling’s stances or not, his potential Congressional candidacy does highlight features that demonstrate why athletes can and should be considered as part of influencer strategy.

BY ADAM GROSSMAN

What Curt Schilling’s Potential Congressional Run Says About Athlete Influencer Marketing

One of the reasons that Block Six Analytics (B6A) built our Influencer Platform with our Partnership Scoreboard is the power of athletes to resonate with fans as much or more than teams. More specifically, a recent example shows how athletes can secure attention for topics outside of sports and of other influencers to potentially drive audience behavior.

      Pledge Of Allegiant: Analyzing The Raiders New Naming Rights Deal  BY ADAM GROSSMAN     

 
   
     
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
     
   
      In a  post  in December 2018, we analyzed why Allegiant Air’s new credit card partnership with Minor League Baseball (MiLB) was a good fit for the company’s strategic goals. More specifically, the company’s  strategy  is being one of the only airlines focused on targeting low frequency leisure travelers looking for direct flights to underserved cities such as the ones where MiLB teams play their games.   That may make the  Allegiant Stadium  announcement earlier this week, with the company becoming the official naming rights partner of the Las Vegas Raiders, seem counterintuitive. More specifically, Las Vegas is one of the most popular travel destinations in the world (i.e. not an underserved city) and the NFL is a much bigger organization than MiLB that also operates in larger cities.    Yet, the naming rights deal with the Raiders specifically does nevertheless appear to be particularly well suited for Allegiant’s business model. That is the result from the Block Six Analytics (B6A)  Corporate Asset Valuation  Model (CAV) which analyzes partnerships based on their ability for companies to generate lifts in their revenue and brand goals.    There are two key ways that this partnership enables Allegiant to better engage and monetize its target customers. The first is enabling Allegiant to more effectively target cities that are both larger and underserved to facilitate the company’s growth. More specifically, the company has  targeted  “selected medium-sized cities, to which major carriers have reduced service” including NFL cities Cincinnati, Indianapolis and Pittsburgh.   Redefining underserved cities has  enabled  the company to increase operating and net margins even as overall revenue increases. Naming rights deals typically excel in enabling partners to maximize brand awareness and brand perception. Because NFL games have large, national television audiences, the new naming rights deal in Las Vegas will enable Allegiant to reach leisure travelers in medium-sized NFL cities that would potentially want to fly to NFL games.   Encouraging its target audience to travel for experiences like NFL games is an important part of Allegiant Air’s strategy. Allegiant has been  selling  “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. 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 leisure customers that are increasingly in the medium-sized NFL cities that are key to its profitable revenue growth.  The naming rights deal with the Raiders specifically achieves this goal, as it is expected to  include  “exclusive access to customers of the venue at various events” at Allegiant Stadium. An increasingly important consideration is how to create unique experiences for customers through partnerships. The transportation industry as a whole is in the position of providing the planes, trains, cars, etc. that enable fans to get to their favorite sporting events.   Allegiant now has a competitive advantage in that it can now both transport, host, and provide exclusive access to the unique experiences its leisure traveler customer is passionate about. That includes both NFL games where a customer’s favorite team is playing the Raiders, Pac-12 Championship games, and UNLV football games.   Allegiant Air’s deal also comes with the  knowledge  that AEG Facilities, a division of venue and live-entertainment company AEG, will manage the venue when it opens. This includes the expectation that “AEG will be able to develop more than 40 events at the stadium” including a “planned a new music festival this year.”  Profitable revenue growth is difficult to achieve in all industries in general and the airline industry specifically, where margins for many airlines are  tightening . Even though Las Vegas is a major travel destination, it is not clear that other airlines would receive the same value as Allegiant Air from this deal. It is by analyzing Allegiant’s specific business strategy, customer base, and brand goals that we can determine that good value will likely be created through its partnership with the Raiders. 

BY ADAM GROSSMAN

Pledge Of Allegiant: Analyzing The Raiders New Naming Rights Deal

In a post in December 2018, we analyzed why Allegiant Air’s new credit card partnership with Minor League Baseball (MiLB) was a good fit for the company’s strategic goals. More specifically, the company’s strategy is being one of the only airlines focused on targeting low frequency leisure travelers looking for direct flights to underserved cities such as the ones where MiLB teams play their games. That may make the Allegiant Stadium announcement earlier this week, with the company becoming the official naming rights partner of the Las Vegas Raiders, seem counterintuitive. Yet, the naming rights deal with the Raiders specifically does appear to be particularly well suited for Allegiant’s business model

      ESPN8: The Ocho’s Return Shows The Value Of The Long-Tail In Sports  BY ADAM GROSSMAN     

 
   
     
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
     
   
      Arguably Mark Twain’s most famous quote  is  “Truth is stranger than fiction.” Sports movies put this adage to the test with strange plots that would “never” happen in the sports industry. Yet, it appears that many sports movies’ attempts to be “strange” have actually been strangely predicative of important future industry strategies.    In a previous  post , we discussed how a deleted scene in the movie  Major League  released in 1989 first foretold of the type of Moneyball analytics used by the Oakland A’s in 2001. The third anniversary of ESPN’s broadcast of  ESPN8: The Ocho  on Aug. 7th is the culmination of another example of movie fiction leading to sports reality.   The Ocho was a fictional satire of an ESPN network that solely broadcast obscure sports in the movie  Dodgeball: A True Underdog Story . Even though ESPN then (and now) has multiple networks, it would not make sense for the company to broadcast an obscure sport such as dodgeball in 2004 because the audience would be too small.     This idea is actually the crux of the long tail concept. In his book  The Long Tail: Why the Future of Business is Selling Less of More  published in 2006, Chris Anderson demonstrates  how , “how the future of commerce and culture isn't in hits, the high-volume head of a traditional demand curve, but in what used to be regarded as misses--the endlessly long tail of that same curve.”  The Ocho concept of targeting a large number of small audiences using a long tail approach is now at the heart of over-the-top sports media platforms.  The best example of this approach is the rise of FloSports. Launched in 2014, FloSports  has  “has rapidly grown its content line-up to more than 10,000 live events annually by catering to underserved sports and audiences” through its OTT platforms. FloSports has grown rapidly and recently secured $47 million in funding to continue to implement this long tail strategy.  FloSports’ success has likely played a role in ESPN’s decision to transform ESPN2 into The Ocho for one day every August since 2016 (and also to launch its OTT platform ESPN+). This year the company will be  featuring  “traditional favorites” such as “The Amazing Games, Premier League Darts, World Sumo Challenge, Burger Eating and Spikeball.”  The main change for The Ocho this year is that ESPN will for the first time broadcast a live event with the 2019 World Cornhole Championship, a tournament that has both a US bracket and an International bracket. This appears to be very similar to the movie version of The Ocho which broadcast the fictional ADAA Las Vegas International Dodgeball Open in 2004.    While the similarities of the real and parody Ocho are very funny (or eerie depending on your point-of-view), the long tail is something to be taken seriously in the sports industry. More specifically, the success of FloSports and other OTT platforms like DAZN demonstrates the increasing importance of fit and engagement when it comes to sports media content.    However, the long tail strategy is not just limited to sports media. The long tail is one reason why the value of finding fit and engagement when it comes to sponsorship is at the heart of the B6A  Corporate Asset Valuation Model  (CAV).   There are two applications of the long tail concept when it comes to corporate partnerships. First, the success of FloSports shows how smaller properties can articulate sponsorship value. While audience sizes are smaller, smaller sports properties’ fans are so passionate that they are willing to buy a FloSports subscription to view the content. This effect of customers voting with their dollars is a demonstrable level of engagement that larger sports cannot always achieve or prove in this way.  Second, an increasing number of companies are looking for opportunities where they can focus on a small audience that will value a specific activation. While reaching large audiences is still desirable for many corporate partners, having unique  experiences  that are the partnership equivalent to The Ocho for a small number of a company’s best customers or employees can have an even greater impact on its top or bottom line revenue growth.     ESPN may never create The Ocho as a full-time network. However, even a company as large as ESPN that focuses on broadcasting the largest sporting events in the world has begun to see the value of the long tail sports audience. The potential power of the small audience should not be lost on those working in the sports sponsorship industry as well.

BY ADAM GROSSMAN

ESPN8: The Ocho’s Return Shows The Value Of The Long-Tail In Sports

Arguably Mark Twain’s most famous quote is “Truth is stranger than fiction.” Sports movies put this adage to the test with strange plots that would “never” happen in the sports industry. Yet, it appears that many sports movies’ attempts to be “strange” have actually been strangely predicative of important future industry strategies. 

      How Robot Umpires Apply To The Sports Industry  BY ADAM GROSSMAN     

 
   
     
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
     
   
      The independent baseball Atlantic League announced that will it will use robot umpires to call balls and strikes during games for the remainder of this season. The robot  umpires  “uses the TrackMan, a network of calibrated lasers that work to call strikes and balls that (if all goes well) are accurate to each hitter's unique strike zone.” The Atlantic first used robot umpires during its All-Star Game earlier in July and will start using them full-time on Thursday.   The idea of using machines instead of humans for specific tasks is something we are familiar with at B6A. For example, our  Media Analysis Platform  (MAP) leverages machine learning to identify and classify logo activations in linear, OTT, digital, and social video / images. The reason we adapted this approach is that machines have the ability to be more accurate and analyze content more quickly than humans particularly when logos are moving quickly across the screen (i.e., NASCAR races or even NBA jersey patches).   This is a similar thesis to using robot umpires. More specifically, professional baseball players routinely pitch baseballs in excess of 90 mph which provides  human umpires four-tenths  of a second to analyze a pitch for a ball or strike. While this is an extremely small amount of time for a human, the typical computer central processing unit (CPU) “can execute 1,800,000,000 instructions” per second. This means four-tenths of a second is a relatively long time for a machine to analyze this information.   It is admirable how accurate umpires are, particularly at the MLB level, given how fast pitches get to home plate. However, between 2008-2018 MLB umpires made incorrect calls 12% of the time. A  study  published in The Conversation also found that, “when batters had two strikes, the error rate for all umpires increased – incorrect calls happen 29 percent of the time.”  There most common explanation for the increased error in two-strike situations is a false negative issue in that umpires do not want to call a third strike because that ends the at-bat with an umpires decision rather a player’s action. If an umpire calls a ball then (except for counts with three balls and two strikes) the at-bat can continue with the hitter continuing to have the ability to swing and miss or make contact with the pitch.   These are the types of biases that are common and completely reasonable for humans to have but can be eliminated by machines. For example, a machine is not going to care if a player or manager yells at it for calling a third strike. And yet this same The Conversation umpire study that documented umpire error also expresses the belief that umpires should not be replaced by machines completely, particularly given the complexity of what an umpire has to do outside of calling balls and strikes.   The Conversation article recommends  that  “Umpires could easily be fitted with ear pieces connecting them to a control center that conveys real-time ball and strike information. These tech-assisted umpires could then make calls correctly, quickly and effortlessly…Umpires could remain the final arbiter, having override ability under certain circumstances, such as if a ball hits the ground before crossing the plate or if a system outage occurs.”    The ability of a human to potentially override a machine is a core part of MAP as well. In particular, we use our Visual Verify tool within our General Manager backend platform to manually analyze each positive frame to identify if / when a machine has made an error. We particularly focus on the beginning of a season, new client relationships, or new activations to ensure we can be as accurate as possible with our analysis.   We then can update our algorithms in the appropriate way when needed so we can maximize the processing speed of a machine to deliver results typically within 72 hours after a game occurs. This also enables our team to be more focused on delivering insights to our clients on what can be done to improve performance and how that can be communicated to internal and external stakeholders.   Leveraging machine learning to help with specific and often repetitive tasks where it is better-suited than humans is a good example of how this type of technology can work both on and off the field. While this may change in the future, for now machines provide the ability to free up humans to focus on more complex issues that can provide more value to core sports industry challenges.

BY ADAM GROSSMAN

How Robot Umpires Apply To The Sports Industry

The independent baseball Atlantic League announced that will it will use robot umpires to call balls and strikes during games for the remainder of this season. The robot umpires “uses the TrackMan, a network of calibrated lasers that work to call strikes and balls that (if all goes well) are accurate to each hitter's unique strike zone.” The Atlantic first used robot umpires during its All-Star Game earlier in July and will start using them full-time on Thursday. The idea of using machines instead of humans for specific tasks is something we are familiar with at B6A.

      Should We Analyze The Partnership Value Of Illegal Streaming?   BY ADAM GROSSMAN     

 
   
     
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
     
   
      One issue we are asked about at B6A frequently is whether we can determine the value of illegal streams of games, matches, or contests particularly in terms of television viewable assets such as on-field signage or jersey patches. The thinking is that illegal streams are a large enough percentage of overall sports viewership that buyers and sellers are not understanding the full value of these deals without evaluating pirated video.   A recent  study  by GumGum Sports and Muso found evidence to support this point of view. More specifically, the two companies “focused on eight matches spanning the 2018-19 season… [and found] worldwide illegal streaming of the English Premier League (EPL) delivers £1M in uncaptured sponsorship media value per match.”  It is probably not surprising to most that there is potentially significant exposure value in pirated streams. As MUSO co-founder and CEO, Andy Chatterley  states  “these huge audiences still see the same shirt sponsors and commercials as people watching the game via a licensed channel.”  The problem is determining whether this type of analysis should be done and determining whether it is driving significant partnership value. In particular, two issues emerge if this type of analysis becomes a more consistent approach to valuing partnerships. First, is the huge audience the right audience for many corporate partners. Second, partnership in sports also encompasses that sports properties media partners have paid significant amounts of money for the exclusive rights to broadcast sports events.   The first issues stems from a challenge on a focus on quantity or reach in partnership valuation that we have discussed in several previous blog  posts . More specifically, partnership valuation has traditionally focused on the number of people that interact with an activation. In this case, the greater the number people that watch a game (whether illegally or legally) the more value that is created.   However, quantity is only one component of B6A’s  approach  to valuing partnership. Fit is an equal, if not more important, factor in analyzing partnership value. More specifically, the goal is to reach the right people with the right message at the right time in the right channel where they consume content. The right people are typically the ones that are current or potential customers for a company’s specific products or service offerings.   It is not clear that the people watching illegal streams are the right people for many brands. For example, many corporate partners only operate in a specific country, region, or city where a team or league competes. If “huge audiences” of people outside of these markets are watching games, these viewers have relatively little value to a corporate partner since it is very unlikely that they will be customers. Therefore, this audience is not a good fit and should not be valued in the same way as those consuming content legally.  The second issue that arises comes from the definition of partnership in a media context. For example, EPL media rights partners have paid tens of millions of pounds for the exclusive rights to broadcast games in linear, over-the-top (OTT), and / or digital channels. Valuing illegal streams for the end goal of selling more partnerships or selling partnerships at a higher price point is arguably the sports properties telling teams that they are tacitly (if not explicitly) endorsing illegal streaming because it can help their team, league, and event generate more revenue.    Obviously, this is not an ideal way for a partnership to operate and opens the door for media companies to potentially explore ways to monetize illegal uses of sports organizations’ intellectual property. For example, sports properties are rightfully concerned about apparel companies illegally using the likeness and image of a league, team, or player. Yet,  counterfeit apparel  is a multi-million (if not billion) dollar per year industry. If sales of counterfeit apparel are happening then why shouldn’t media partners sell ad inventory promoting these companies?  One maxim that my co-authors and I discuss in   The Sports Strategist: Developing Leaders for a High-Performance Industry   is the concept of “doing well by doing good.” This concept is that ethical approaches are not just the “right” approach but also are often the best way to maximize revenue growth.   GumGum and Muso have proven that there are ways to analyze the value of illegal streaming. However, it is not clear that the illegal streaming audience is the best fit for many corporate partners. It is clear that valuing illegal streams will likely antagonize media partners. This provides a solid foundation for the idea that the “right” approach is to think very hard about valuing illegal streaming.    

BY ADAM GROSSMAN

Should We Analyze The Partnership Value Of Illegal Streaming?

One issue we are asked about at B6A frequently is whether we can determine the value of illegal streams of games, matches, or contests particularly in terms of television viewable assets such as on-field signage or jersey patches. The thinking is that illegal streams are a large enough percentage of overall sports viewership that buyers and sellers are not understanding the full value of these deals without evaluating pirated video. The problem is determining whether this type of analysis should be done and determining whether it is driving significant partnership value.

      How The U.S. Women’s National Team Players Can Better Score Sponsorship Deals  BY ADAM GROSSMAN     

 
   
     
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
     
   
      In previous  posts , we have discussed how women’s sports represents an opportunity for potential sponsors as undervalued assets for reaching target markets. In particular, we used a  case study  featuring LUNA Bar showing the value of its decision pay each United States Women’s National Team (USWNT) player the difference in salary between them and their male counterparts for participating in the World Cup.  The USWNT members seem now to be in a position to change this situation. As a recent MarketWatch post  states , “The U.S. women’s team won the World Cup, and they’re about to get paid — by sponsors, anyway.” The post goes on to describe how players can cash in on winning the World Cup via “endorsement deals, speaking engagements and social-media campaigns.”  However, President of Sportsimpacts and Director of the Sports Business Program at Washington University in St. Louis Patrick Rishe explains the challenge of this thinking. He  states , “While it is certainly possible that a very few select individual female soccer players could earn $5 [million] to $10 million in endorsement income (with Alex Morgan and Megan Rapinoe being near the top of that list right now), the reality is that [male international soccer stars] Cristiano Rinaldo ($44 million last year) and Lionel Messi ($35 million last year) have a much higher endorsement income ceiling, because there are many more consumer eyeballs on their sport than there is for the women’s game.”  Rishe articulates that challenge common to women’s sports. While it is true that the USWNT consistently draws many of the  largest television audiences  to watch soccer in the United States for male or female competitions, this typically only happens during the World Cup or the Olympics. It is difficult for women, even USWNT stars, to attract sponsors if they are focused solely on quantity metrics such as “consumer eyeballs,” given that the audiences are not as consistently large in different channels as they are for men’s sports.  While this gap should continue to close in the long-term, the USWNT demonstrates why sponsorship of women’s sports in the short and medium-term should not focus on quantity metrics. Instead, USWNT should be focused on fit and engagement metrics. More specifically, the USWNT has a passionate, engaged audience that is a good fit for many companies’ key consumer demographics.   We decided to examine LUNA Bar again to demonstrate how this approach can work. Below is an example of our  Social Sentiment Analysis Platform  (SAP) analysis within our  Partnership Scoreboard  analyzing Twitter activity during the World Cup for the USWNT and its three of its star players.      

  

    
       
      
         
          
             
                  
             
          

          

         
      
       
    

  


     We found that the USWNT and its players excels from a fit, engagement, and sentiment perspective. More specifically, the team and its players are able to target the audiences that are most valuable to LUNA Bar, create substantial lifts in engagement rates, and generate significantly positive sentiment with this conversation. In fact, the only negative sentiment created with posts featuring LUNA Bar and the USWNT or its players were fans complaining that the women’s team does not receive equal pay to the men’s team for participating in the World Cup.    This is not to say that quantity metrics do not add value for sponsors. In fact, looking at reach is one of three primary components of our  Corporate Asset Valuation  Model (CAV). However, it is also only one of three components. In particular, we have found that companies are increasingly making fit and engagement metrics a higher priority in their approach to valuation. Reaching the right people with the right message at the right time and in the right channel drives the revenue and brand metrics that have significant impacts on their businesses.  The USWNT rightfully deserves new or renewed interest from current and potential sponsors. However, the USWNT should compete for sponsorship dollars in the ways that best position these players to be successful. Prioritizing fit and engagement in sponsorship conversations  is both what companies are increasingly looking for in partnerships and should maximize the players’ success in securing new deals.

BY ADAM GROSSMAN

How The U.S. Women’s National Team Players Can Better Score Sponsorship Deals

In previous posts, we have discussed how women’s sports represents an opportunity for potential sponsors as undervalued assets for reaching target markets. In particular, we used a case study featuring LUNA Bar showing the value of its decision pay each United States Women’s National Team (USWNT) player the difference in salary between them and their male counterparts for participating in the World Cup. The USWNT members seem now to be in a position to change this situation.

      Examining Top NBA Free Agents Using On-Court and Off-Court Analysis  BY ADAM GROSSMAN     

 
   
     
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
     
   
      There is little doubt that the Brooklyn Nets have already had one of the most successful free agencies in recent NBA history. This off-season has seen the Nets sign Kevin Durant, Kyrie Irving, and DeAndre Jordan to the team.   Many people define success by a player’s on-court performance. Yet, NBA teams are businesses, focused on maximizing revenue generation. NBA teams, like teams in every other sport, do not rely solely on on-court performance to drive revenue. The NBA in particular has often leveraged the star power of its athletes as the centerpiece of its brand identity.    Therefore, players’ values should be determined by how their on-court and off-court performance drives team revenue growth. This is the foundation of B6A’s  Revenue Above Replacement  (RAR) model. We applied the RAR model and our  Social Sentiment Analysis Platform  (SAP) to examine on-court and off-court factors for five of the top NBA free agents.      

  

    
       
      
         
          
             
                  
             
          

          

         
      
       
    

  


     Our RAR and SAP products confirm Durant’s and Irving’s value using both on-court and off-court quantity-based (as opposed to quality-based) metrics as illustrated in the chart above and the chart below. For on-court performance, RAR uses the B6AWins metric. B6AWins examines multiple metrics to determine which factors are most likely to drive team wins during the regular season and how each player performs on each factor. Durant and Irving were determined to be ranked number one and number three in highest B6AWins.  For off-court performance, SAP first examines the total number of Twitter followers and the total number of posts during free agency. The goal is to determine the size of the potential audience and whether the audience is talking about the player. Durant and Irving had the highest and second highest totals for followers and posts, respectively.    Maximizing revenue, however, should not only focus on quantity-based metrics. In B6A’s  Corporate Asset Valuation Model  (CAV), fit is one of the most important components in determining the overall value that a company receives from a partnership. We apply similar logic to the top free agents by using the SAP tool to determine the demographic profile of each player’s audience.      

  

    
       
      
         
          
             
                  
             
          

          

         
      
       
    

  


     In this example, we specifically focused on the income profiles of each player’s Twitter followers. Despite having the smallest number of followers, Leonard is the best able to target higher income demographics. This is likely one reason that New Balance has decided to sign Leonard to a multi-year shoe deal. More specifically, Leonard and New Balance have significant overlap in their audience demographic from an income perspective, making Leonard a good fit for the New Balance brand.  That is not to say that Irving and Durant do not have significant off-court value. For example, both players are still able to target higher income demographics more effectively than the TWITTER_BASE population, while reaching large audiences overall and generating significant conversation.    As partners increasingly prioritize  fit  when evaluating sponsorship relationships, however, it is important to for teams to examine athletes as influencers that can more effectively reach a company’s core demographic. More specifically, star power should not rely solely on follower counts. The ability to engage with specific audiences that are valuable to companies should drive more sponsorship revenue to teams and can be a key factor in determining player values.  

BY ADAM GROSSMAN

Examining Top NBA Free Agents Using On-Court and Off-Court Analysis

There is little doubt that the Brooklyn Nets have already had one of the most successful free agencies in recent NBA history. This off-season has seen the Nets sign Kevin Durant, Kyrie Irving, and DeAndre Jordan to the team. Many people define success by a player’s on-court performance. Yet, NBA teams are businesses, focused on maximizing revenue generation. NBA teams, like teams in every other sport, do not rely solely on on-court performance to drive revenue. The NBA in particular has often leveraged the star power of its athletes as the centerpiece of its brand identity.  Therefore, players’ values should be determined by how their on-court and off-court performance drives team revenue growth.

      StubHub Beyond Shows Importance Of Creating The Right Loyalty Plan  BY ADAM GROSSMAN     

 
   
     
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
     
   
      StubHub announced a new customer loyalty program earlier this week called  StubHub Beyond  which offers its highest revenue customers several new benefits. These include a dedicated support team, access to VIP events, and the ability to secure refunds up to seven days before an event. StubHub Beyond will initially only be available to customers that spend over $10,000 per year with the company and only in the U.S. for now, with the company looking to expand globally in the near future.   There are several interesting insights that come from the launch of StubHub Beyond. The first is that the loyalty  program  “is a first within the ticketing industry” and the company is using this as a way to “stand out among its competitors in the secondary market.”  That may seem counterintuitive because we have discussed in past blog posts, for example our post from last  week , that many companies use access to live events as a way to better engage with their customers and differentiate themselves from their competition. The apparent fact that the ticketing companies that provide access to these events have not had this type of loyalty program for their own customers is interesting.  This is all the more surprising in that this is not the first time that StubHub has had a loyalty program. From 2011-2016, StubHub Fan Rewards was a point-based program that was similar to credit card reward programs. More  specifically , “members accrue rewards based on a percentage of eligible purchases, and for every $10 earned member receive a $10 FanCode (sic) to apply toward future StubHub purchases.”     There are several studies that  show  that loyalty programs “are effective in increasing consumer purchase behaviors over time, but their impact differs across consumer segments and markets.” StubHub realized that the impact on their consumer segment to receive discounts on future purchases did not generate the results it wanted. Instead, the company wanted to create a reward program starting with what was valuable to its most-valued customers.   The events that seem to be most valuable to StubHub customers are sports-related events. The first StubHub loyalty offerings will  occur  this Thursday with a private tour of Yankee Stadium including batting cage practice. A similar event is scheduled for September at Citi Field. While StubHub is a secondary marketplace for both sports and non-sporting events, the focus on sports for the launch of the loyalty program reveals that this is where its highest-value clients can or want to spend their money.  The fact that StubHub, a company built on analytics and data, is using these events specifically targeting high-revenue clients is a good indication that other sports organizations should follow suit. More specifically, tickets to unique sporting events (e.g., access to batting cages at Yankee Stadium) is something that high-revenue customers will value. This type of experience helps partners of sports teams to differentiate themselves in crowded competitive environments.   The ability to attract and retain these clients through unique events, particularly for companies operating in a business-to-business environment, using these types of non-media assets has been difficult for buyers and sellers of sports sponsorship to value in the past. Our  Corporate Asset Valuation Model  (CAV) can do this more accurately because it prioritizes fit which maximizes the probability of driving tangible business outcomes for each company.    Loyalty programs are similar to sponsorship activation in that the most successful programs consider audience fit. StubHub Beyond also shows the importance of providing access to sporting events as way to maximize audience engagement particularly for high-value demographics.

BY ADAM GROSSMAN

StubHub Beyond Shows Importance Of Creating The Right Loyalty Plan

StubHub announced a new customer loyalty program earlier this week called StubHub Beyond which offers its highest revenue customers several new benefits. These include a dedicated support team, access to VIP events, and the ability to secure refunds up to seven days before an event. StubHub Beyond will initially only be available to customers that spend over $10,000 per year with the company and only in the U.S. for now, with the company looking to expand globally in the near future. There are several interesting insights that come from the launch of StubHub Beyond.

      How To Value The New World Of Sports Sponsorship  BY ADAM GROSSMAN     

 
   
     
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
     
   
      Facebook Head of Industry for Financial Services Deepanjan De expressed a key insight in “The New World of Sports Sponsorship” in an article the company sponsored recently in  AdWeek . De focuses on four core activation opportunities - Pre-Event, On Site, In Venue, and From The Couch. The  thesis  of the piece is that “It’s all about engagement” and engagement primarily occurs through differentiated experiences.   It is not surprising that an article by someone who works at Facebook examines engagement in all of these activation opportunities through a technology lens. De  asserts  that “many of the old tried-and-true activations are still standard issue for sponsors—hospitality tents, product demonstrations and swag giveaways still have their place. But for a lot of sponsors, those have been supplanted by tech-enabled executions that really get at the passion that fans feel.”  There are several points of contention that sponsorship industry veterans could make with De’s claims. In particular, De’s seemingly negative connotation of “standard issue” items and the idea that tech-enable executions “really” stir passion and / or are necessary to have great experiences could be criticized particularly in the context of the first principles for “The New World Of Sports Sponsorship.”   However, De’s thesis is one that needs to be examined carefully whether one is a sponsorship buyer, seller, or agency. More specifically, De is right in that everyone needs to be able to determine if and how new technologies are good fits for a sponsorship portfolio. Yet, measurement has always been the essential challenge for new sponsorship assets.   In particular, most sponsorship models are built around quantity and reach. Yet, the primary goal has shifted to engagement with targeted audiences that can drive specific business outcomes for companies. De articulates how sports can uniquely create the experiences that generate the engagement opportunities that brands are looking for in a sponsorship.  The next step is to be able to quantify the tangible business impact of engagement and experiences in non-traditional channels and platforms. Our  Corporate Asset Valuation Model  (CAV) accomplishes this goal in a clear and concise way.   The essential CAV insight is that all sponsorship assets can be broken down into specific attributes that can be measured for their impact on the specific revenue and brand goals of the company. In particular, the CAV breaks out fit, sentiment, and engagement to determine the value of a partnership in addition to overall reach. We then can determine the value for virtually any sponsorship opportunity by using the same approach for both “standard issue” and “tech-enabled” sponsorship activations.   For example, De spotlights the American Express interactive gaming experience  that  “fused augmented reality with actual tennis play” through Fan Experience at the U.S. Open . This was the way the company  could  “up its presence with innovative benefits for both its Card Members and all tennis fans.”  It is likely that the augmented reality activation did reach a larger audience than the card members that attended the U.S. Open. De’s featuring of this sponsorship in the AdWeek article is an example of the earned media that has been generated by this tech-enabled activation. This is one way that the in-venue experience has a reach outside of the venue.  However, the larger benefit comes from differentiation in the crowded markets of both credit issuers and credit processors. American Express has built its business in large part based on its ability to provide unique experiences to its card holders and use those to command a higher willingness-to-pay for access to these product offerings.   More specifically, card holders saw significant value through the unique experiences provided by American Express. This also enabled American Express to charge merchants a higher fee for processing transactions because it had lucrative customers for stores that accepted American Express.  In the “standard issue” world of the past, the unique experiences often meant providing items such as travel perks and high-touch concierge service. Other credit card companies now have the capability to offer a comparable experience to American Express. In the “tech-enabled” world of the future, the American Express augmented and virtual reality experiences create the opportunity to attract and retain customers. American Express can use its U.S. Open sponsorship to show how it is creating differentiated experiences at the events that most resonate with its card holders.   This type of analysis is at the heart of the CAV. We can break down an augmented reality partnership into its component attributes. Augmented reality will maximize the probability that American Express’s target customer (fit) will spend a longer period of time interacting (engagement) with the brand in ways that drive lifts (perception in the probabilities of customer acquisition and customer retention)  and revenue.   The impact of fit and engagement on brand perception and driving revenue become the framework for measuring value. More specifically, virtually every tech-enabled and standard-issue sponsorship activation can be broken into component parts and tangible business metrics. The decision then becomes which type of activation is right for the company.   The “New World of Sponsorship” is not what is ushering in the change in understanding of sponsorship value. Tech-enabled activations are the Trojan Horses for a shift in focus to fit and engagement rather than myopically examining reach when it comes to sponsorship. Having the tools to understand how value is created in the “New World” will be the key to success for sponsorship buyers, sellers, and agencies.

BY ADAM GROSSMAN

How To Value The New World Of Sports Sponsorship

Facebook Head of Industry for Financial Services Deepanjan De expressed a key insight in “The New World of Sports Sponsorship” in an article the company sponsored recently in AdWeek. De focuses on four core activation opportunities - Pre-Event, On Site, In Venue, and From The Couch. The thesis of the piece is that “It’s all about engagement” and engagement primarily occurs through differentiated experiences. De’s thesis is one that needs to be examined carefully whether one is a sponsorship buyer, seller, or agency.

      Raptors Maximize Partnership Revenue By Listening  BY ADAM GROSSMAN     

 
   
     
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
     
   
      While the Toronto Raptors almost secured their first NBA Championship in team history on Monday night, the team has already secured a championship-level approach to partnership sales strategy. Even though the Raptors play in a different country from every other NBA team, the approach the team employs has  caused  “everyone [to think] we’re on a different planet.”   What does Jeff Deline, chief revenue officer for Maple Leaf Sports and Entertainment (MLSE), mean when he says that the NBA team that MLSE owns operates on a different planet? The two more tactical approaches the team has employed are  eliminating  “sales commission for selling a corporate partnership and a draft process that determines which executives are authorized to sell specific sponsor categories.”    However, the more strategic approach that the Raptors  employ  is “listening and understanding a brand’s problems before actually pitching their plans.” The Raptors will now wait until the “fifth or sixth” meeting before crafting a pitch for a potential partner in a process that is “almost like you’re not even selling.”   The Raptors are employing a form of behavioral economics  developed  in large part by Kurt Lewin and Daniel Kahneman that both seems obvious and is counter-intuitive. The most effective way to incentivize someone to change or employ a certain behavior is by removing obstacles or barriers that prevent that behavior from occurring.   One the biggest obstacles from a company perspective is to be able to answer the question: “does this partnership fit my business needs from an economic or brand perspective?” Companies can receive hundreds of pitches from sports properties containing assets ranging from more traditional activations such as signage or television commercials to more experimental activations such as augmented or virtual reality. The question becomes which activations will best help the company achieve that goal?   Answering this question has been a challenge for sports properties. Unfortunately, a sales commission structure typically incentivizes sales teams to speak to as many companies as possible, spend less time with each potential partner, and create similar proposal templates to determine prices and values. While this may seem like an optimal strategy, it is often inefficient because the sales team will frequently be speaking to companies that are uncertain if they are a good fit for a partnership and unlikely to work with a property.   The Raptors solution to this problem is to ask partners what they need rather than “telling” them what they need. If a company knows up front that the Raptors are developing a solution tailored to their needs, it removes the uncertainty barrier. This enables a brand to make a purchasing decision more quickly and / or at a higher dollar amount because it is significantly more confident that its partnership is built for its specific business and brand goals.    Listening does not always require speaking directly to companies. Social media listening tools, such as our  Social Sentiment Analysis Platform  (SAP), enable teams to determine potential partners’ customer demographics and what they are saying about the brands. These insights provide sports properties with ability to better identify companies potential partners based on their ability to reach and influence these companies’ target demographics. Proactively identifying fit also reduces uncertainty during the new partnerships sales process because companies will know they are more likely to reach the right audience to achieve their revenue and brand goals.         The Raptors approach should not be limited to the new sales process. Our  Corporate Asset Valuation Model  (CAV) and  Partnership Scoreboard  enable both companies and properties to understand the value of specific activations to specific companies across multiple different activation types. The CAV is focused on demonstrating the fit of a partner for each company based on its specific revenue and brand goals. The Partnership Scoreboard aggregates data from different sources and displays insights for buyers and sellers of corporate partnerships in one location. This enables what is communicated in a sales process to be tracked in a clear and concise way in the account management and renewal phases of an agreement, further eliminating the uncertainty barrier.   This strategy may not work for every team or company. Deline  recognizes  that the Raptors on-court success has had a positive impact on partnership revenue. In addition, commissions are often critical for retaining sales talent even though the Raptors claim to have few problems with employee retention with their new strategy. This likely stems from increased employee satisfaction that comes from the ability for the partnership team to have more meaningful conversations with a fewer number of companies to generate increased revenue.  The Raptors are not living on another planet with this approach. In fact, the team appears to be applying frequently researched behavioral economics concepts to corporate partnerships. Eliminating as much uncertainty as possible from the sales, account management, and renewal process should incentivize the behaviors that maximize value for buyers and sellers of corporate partnerships.

BY ADAM GROSSMAN

Raptors Maximize Partnership Revenue By Listening

While the Toronto Raptors almost secured their first NBA Championship in team history on Monday night, the team has already secured a championship-level approach to partnership sales strategy. Even though the Raptors play in a different country from every other NBA team, the approach the team employs has caused “everyone [to think] we’re on a different planet.” What does Jeff Deline, chief revenue officer for Maple Leaf Sports and Entertainment (MLSE), mean when he says that the NBA team that MLSE owns operates on a different planet?

      Salah Shows Athletes Can Be Superheroes In Influencing Behavior  BY ADAM GROSSMAN     

 
   
     
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
     
   
      Fighting crime is typically a central component of the superhero narrative that appeals to fans of movies, comics, and graphic novels. While athletes are often portrayed as superheroes, it is typically for their “super human” on-field accomplishments rather than any ability to fight crime.  Liverpool F.C. forward Mo Salah, however, could be one of the first athletes to change that narrative. A   study   from Stanford University’s Immigration Policy Lab found that “hate crimes fell 18.9 percent in Merseyside County relative to a synthetic control” since 2017 when Salah was signed by Liverpool.   As the authors of the study wrote, ”This decline was more extreme than we would expect based on chance alone, and the decrease in hate crimes was more pronounced than the decrease in any other crime category. Taken together, the evidence points to Salah’s rise in prominence causing a decrease in hate crimes in Liverpool F.C.’s home county.”  The authors of this study were looking to see if a “ celebrity ” could potentially reduce hate crimes in the area against a prejudiced group. In Salah’s case the impact is specifically focused on the reduction of hate crimes against Muslims in Merseyside County in England by  looking  at “police data, 15 million tweets from soccer fans and took a survey of more than 8,000 Liverpool fans.”  Salah was selected because he has arguably been a superhero on the field for Liverpool having won two consecutive Golden Boots for scoring the most goals in each of the past two seasons in the English Premiere League. This included helping to lead Liverpool to a UEFA Champions League Final victory on June 1st.   However, Salah’s ability to be a more “traditional” superhero in helping to fight crime is really extraordinary. B6A’s  Social Sentiment Analysis Platform  (SAP) can provide some insight into why this is the case.     

  

    
       
      
         
          
             
                  
             
          

          

         
      
       
    

  


    

 
   
     
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
     
   
      A recent study commissioned by the Welsh Government  found  that “the majority of hate crime offenders in the UK are white, male and under 25.” Our SAP demographic analysis demonstrates that Salah is able to disproportionately reach this audience by looking at his 8.9 million Twitter followers. In particular, 30.1% of his followers are under 25 years-old and 82.8% are male. Salah also reaches a significant portion of both Caucasian and non-Caucasian audiences.    This combination puts Salah in the position of reaching a large audience that is the right fit to target with positive, engaging content in ways that could have at least some impact in reducing hate crimes. The Stanford study  found  that “Liverpool fans halved their rate of anti-Muslim tweets compared with other top-flight English clubs — a drop from 7.2 percent of all tweets about Muslims to 3.4 percent.”  The “ Salah effect ” does provide new evidence on the extraordinary ability for athletes to influence behavior as we have highlighted in past B6A blog  posts . While definitely less important from a moral / social perspective, influencing the behaviors of target audiences is one of the most important attributes in successful partnerships. In fact, fit and lift are central components of our  Corporate Asset Valuation (CAV) Model .    We understand that even athletes with comparable profiles to Salah are not always necessarily going to be able to single-handedly reduce crime like a superhero. However, it is clear that athletes can have tangible impacts on important outcomes and need to be considered as an important part of any influencer marketing or partnership campaign strategy.

BY ADAM GROSSMAN

Salah Shows Athletes Can Be Superheroes In Influencing Behavior

Fighting crime is typically a central component of the superhero narrative that appeals to fans of movies, comics, and graphic novels. While athletes are often portrayed as superheroes, it is typically for their “super human” on-field accomplishments rather than any ability to fight crime. Liverpool F.C. forward Mo Salah, however, could be one of the first athletes to change that narrative.

      Norway Benefits From Empiricism In Youth Sports  BY ADAM GROSSMAN     

 
   
     
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
     
   
      On the May 21st episode of   Real Sports  , correspondent John Frankel explores “The Norwegian Way”. Frankel’s focus is to explore the question of how a country of 5.3 million people is becoming a global sports powerhouse. This includes everything from winning the most medals in the 2018 Winter Olympics to having   top-ranked  beach volleyball teams.   The answer from the segment is based on Norway’s empirical approach to youth sports. More specifically, Norway has changed or eliminated many of the standard practices used to develop top athletes in many other countries by looking at actual performance. The most stunning finding appears to be that the approach used by these other countries is fundamentally the wrong strategy to take with youth sports.   Central to Norway’s approach is essentially that children younger than the age of 12 should have as much fun playing as many sports as possible. There is frequently no score kept during games and every child has to participate. Norway also does not allow for rankings to be kept with athletes under the age of 12.  Only after the age of 12 does Norway allow for athletes to “specialize” in a sport. The country provides the coaching, training, and equipment resources comparable to top sports programs in other countries.   “The Norwegian Way” defies the conventional wisdom on specialization in youth sports. Throughout the world, children are increasingly encouraged to focus on one sport, often chosen by their parents. The archetype for this approach is Tiger and Eldrick Woods where Tiger started playing golf as a toddler and focused solely on the sport to become the most dominant player in the world.   This is also at the heart of the 10,000-Hour Rule made famous by Malcolm Gladwell. The rule’s underpinning comes from a study that purportedly showed that the most successful violinists were the ones that practiced for the most time. The takeaway was that it essentially would take 10,000 hours to become an expert in something with the best performers practicing even more than that length of time.  The only problem with the 10,000-Hour Rule is that the exact opposite appears to be true. In the book   The Sports Gene: Inside the Science of Extraordinary Athletic Performance  , author David Epstein shows that the actual finding of the violinist study is that people that are better at something practice more often because they receive positive feedback. In a sports context, Epstein shows that there are athletes that are naturally better than other people. These athletes will become better at their sport at a faster pace with practice. This positive feedback makes them want to practice more so they can keep getting better.   Norway found that using this approach was the most successful way to create world-class athletes particularly in a country with a small population. Parents and / or the state should not make children practice as much as possible on one sport as early as possible. The best thing the state can do is let children figure out what sports they are good at by experimenting with as many sports as possible. Then athletes are more likely to participate in more rigorous training sessions in their teenage / early adult years which leads to the development of world-class athletes.  Challenging conventional wisdom is not an easy thing to do. As the  Real Sports  piece demonstrates, Norway has taken a significant amount of criticism for employing this new approach. It is also early in the process where the outsized rewards like winning the most Olympic medals or having one of the best beach volleyball teams has come to fruition.   However, Norway also shows the importance of leveraging data and empiricism when operating in an environment with competitors who have structural advantages. More specifically, Norway does not have the population size or the resources that the larger countries it competes against have on a global scale. The country needed to find ways where it could create a competitive advantage and experiment with new approaches to see if they could work.   The same type of logic can be applied to other parts of the sports industry, particularly when it comes to sponsorship valuation. In particular, conventional wisdom is that sponsorship assets are valuable because of their ability to generate the highest number of impressions. This is comparable to the conventional wisdom that population size is the best way to determine if a country will be successful in sports.  B6A’s  Corporate Asset Valuation  Model (CAV) helps to show why size should not be the only thing that matters. In particular, corporate partners are looking for the assets that can help them reach the right people with the right message in the right channels. The right people are typically the ones that can help drive revenue growth based on a company’s specific products or services. The right message is the one that can create authentic engagement with these customers. It is not the size of the asset that should solely drive value but the fit of the asset to the company.   This is the approach that enables the “Norways” of the sports industry to compete with larger teams, leagues, athletes or events. It also shows that larger organizations should not rely on the “10,000-Hour” rule approach when valuing sponsorships by focusing solely on quantity metrics. All sports organizations can benefit from an approach that understands the drivers of sponsorship ROI just like all countries can benefit from the “The Norwegian Way.”

BY ADAM GROSSMAN

Norway Benefits From Empiricism In Youth Sports

On the May 21st episode of Real Sports, correspondent John Frankel explores “The Norwegian Way”. Frankel’s focus is to explore the question of how a country of 5.3 million people is becoming a global sports powerhouse. This includes everything from winning the most medals in the 2018 Winter Olympics to having  top-ranked beach volleyball teams. The answer from the segment is based on Norway’s empirical approach to youth sports. More specifically, Norway has changed or eliminated many of the standard practices used to develop top athletes in many other countries by looking at actual performance.

      The Potential Limits To Growing Sponsorship Revenue From Gambling, Cannabis  BY ADAM GROSSMAN     

 
   
     
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
     
   
      If you were to say that there were organizations that would benefit from sports gambling and cannabis even a few years ago, you would more likely be thinking of organized crime rather than state governments. Not only are both achieving legalization throughout the U.S., but also governments are making them important parts of their strategies for how to generate new  tax revenues . For example, two of the primary components of new Illinois governor J.B. Pritzker’s  budget  proposal to help address budget deficit and pension liabilities are legalizing sports betting and adult recreational use of marijuana.  The increasing number of states approving one or both of these items should be a boon for sports partnership revenues. We have documented the impact of gambling on  sports sponsorships  that include that new companies that can partner with sports organizations for the first time and the overall increased fan engagement with lucrative demographics for corporate partners.  Cannabis oriented products (including marijuana) would seem to be following a similar path. More specifically, sports organizations often compete where a cannabis-based product is legal and athletes often use these products. As of  March 2019 , “a whopping 82 percent of [MLB, NBA, NHL, and NFL] teams (101 of 123) are playing in areas where their employees can legally purchase either medicinal or recreational marijuana.”   The Toronto Wolfpack  became  the “first pro sports team to launch a line of cannabis products.” The rugby team launched CBD aka cannabidiol products in part because its chairman  claims  “Rugby is a gladiatorial sport. You have your fair share of bumps and bruises and for recovery and inflammatory pain management CBD products are very, very effective.” The UFC also recently announced a  new  “exclusive, multi-year, multi-million dollar, global partnership to advance CBD research” with Aurora Cannabis Inc.  Authenticity is critical to successful partnerships. There are a growing number of  current and former players  that use cannabis-based products for pain management and are willing to publicly talk about these real and/or perceived benefits even though these products are still largely considered banned substances by most major professional sports leagues. It is difficult to think of a more authentic endorsement for a product or company than continuing to support something that could get you banned from playing the sport you love.    Yet, gambling also demonstrates one of the potential hurdles to cannabis-based products becoming ubiquitous to sponsorship. The primary goal of B6A’s  Corporate Asset Valuation Model (CAV)  is to determine the fit of partnerships between sports organizations and sponsors based on the specific return on investment (ROI) for these companies.   Both gambling and cannabis-based products could be “too good” of a fit with sports fans and deliver “too high” (pun not intended) of an ROI to these companies. More specifically, gambling companies became one of the largest sponsors of European sports teams because this is one of the best ways to target fans and increase use of their products. This can increase the probability of fans becoming addicted to gambling particularly younger audiences that are attracted to teams and athletes.   The United Kingdom, Belgium, Italy, and Austria all  instituted or are considering laws  to restrict gambling sponsorships in large part to address this concern. Even before sports gambling is officially legalized in most of the U.S., the American Gaming Association (AGA) has already  issued  its “Responsible Marketing Code for Sports Wagering” to provide guidelines for “marketing content” to proactively address these issues.   Many people both inside and outside of the sports industry, including  NFL Commissioner Roger Goodell,  believe  that marijuana also has an “addictive nature.” He also stated, “I want to make sure that the negative consequences aren't something that is going to be something that we'll be held accountable for some years down the road.” While CBD products appear to  differ  from marijuana in that “CBD is purported to provide certain health-related benefits, such as pain relief, while lacking the psychoactive properties of THC,” they are still on the banned lists of most major sports leagues’ products lists because many perceive them to also be addictive.   This does not mean that both gambling and cannabis will not have a long-term significant impact on domestic sports sponsorship. However, the efforts to restrict gambling partnerships abroad have already had and will continue to have an impact on gambling partnerships domestically as demonstrated by the AGA report. Similar types of efforts will potentially be applied to cannabis-based products as well. It is important to note that increasing legalization of both items does not mean instant or unlimited new partnership revenues.

BY ADAM GROSSMAN

The Potential Limits To Growing Sponsorship Revenue From Gambling, Cannabis

If you were to say that there were organizations that would benefit from sports gambling and cannabis even a few years ago, you would more likely be thinking of organized crime rather than state governments. Not only are both achieving legalization throughout the U.S., but also governments are making them important parts of their strategies for how to generate new tax revenues. Yet, gambling demonstrates one of the potential hurdles to cannabis-based products becoming ubiquitous to sponsorship.

      NHL Scores With Cup Confidential Campaign  BY ADAM GROSSMAN     

 
   
     
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
     
   
      What content works best on social media? This is a question we receive frequently from current and potential clients particularly as social media becomes an increasingly important component of sports properties and their partners’ marketing strategies.    The NHL’s Cup Confidential campaign is an example of an effective answer to this question.  Cup Confidential  is a video series where players from the NHL teams in the playoffs shoot videos of their daily lives to share on social media. This campaign “is part of the NHL’s efforts to elevate and highlight the personalities of its on-ice stars.”   One reason to emphasize the players’ personalities is that the NHL can then maximize the value of its social media content. Social media is not unlike other types of activations that B6A evaluates with our  Corporate Asset Valuation Model  (CAV). More specifically, the goal of social media is to maximize the quantity, quality, and engagement of a targeted audience through video, image, and text content.   What the NHL as well as other teams and leagues have discovered is that athletes are good at maximizing all three levers to drive value. From a quantity perspective, the 100+ videos of the Cup Confidential campaign have generated  58 million impressions  across multiple different social media platforms.  While this is a significant number of impressions, where focusing on players can really help the NHL drive value is on the quality and engagement side. For example, our  Social Sentiment Analysis Platform (SAP)  found that the NHL can often more effectively target high income demographics than its partners can on their own.   However, individual players can be even more effective at targeting than the NHL. Our SAP platform examined Twitter follower demographics for the Boston Bruins’ Brad Marchand versus the NHL and versus the Twitter population overall because Marchand was featured in one of the Cup Confidential videos.     

  

    
       
      
         
          
             
                  
             
          

          

         
      
       
    

  


     This example demonstrates another reason why featuring players as social media influencers can be an effective strategy for league or team campaigns. In particular, Marchand’s ability to reach more high-income demographics that are a particularly in-demand audience for companies increases the value of a potential partnership with the league.  Marchand is also an example of how the NHL can more effectively engage this audience through social media than other channels. Engagement is increasingly becoming important to companies because it can drive tangible business outcomes.   A recent study published by professors at Stanford University, University of Pennsylvania, and Carnegie Mellon University of 782 companies found  that  “inclusion of widely used content related to brand personality—like humor and emotion—is associated with higher levels of consumer engagement (Likes, comments, shares)…[There] are benefits to content engineering that combines informative characteristics that help in obtaining immediate leads (via improved click-throughs) with brand personality–related content that helps in maintaining future reach and branding on the social media site (via improved engagement).”  The Marchand post specifically and the NHL Cup Confidential campaign more generally are examples of this type of content that could fit within this type of “content engineering.” For example, the Marchand post on the NHL’s Facebook channel generated over 8,900 likes, shares, and comments with an engagement rate that is both  higher  than the media average specifically and the industry average overall.      The Cup Confidential campaign helps validate the NHL’s decision to focus on players particularly as relates to maximizing social media value. Partners should also examine the value of athletes in this influencer marketing context. While players can often help teams and leagues maximize the number of impressions to a lucrative audience with engaging content, they can accomplish many of the same goals for companies as well. Having athlete activations, particularly within social media, should be an important consideration for companies as part of a larger partnership with a league or team.

BY ADAM GROSSMAN

NHL Scores With Cup Confidential Campaign

What content works best on social media? This is a question we receive frequently from current and potential clients particularly as social media becomes an increasingly important component of sports properties and their partners’ marketing strategies. The NHL’s Cup Confidential campaign is an example of an effective answer to this question. Cup Confidential is a video series where players from the NHL teams in the playoffs shoot videos of their daily lives to share on social media. This campaign “is part of the NHL’s efforts to elevate and highlight the personalities of its on-ice stars.”

      NASCAR Bets On Fan Engagement With Genius Sports  BY ADAM GROSSMAN     

 
   
     
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
      
       
         
            
            
         
       
     
   
      NASCAR recently  announced  a new partnership with Genius Sports to be the official provider of racing data to licensed sportsbooks. This enables Genius Sports to provide the NASCAR official data necessary to for sportsbooks to provide, “up-to-the-minute odds and a slew of traditional wagers and prop bets.”  This partnership deal may seem like NASCAR is putting the cart before the horsepower. For example, only  one-tenth  of one percent of all sports bets ($208.1 thousand out of $154.8 million) has been wagered on auto racing from June 5, 2018 through April 28, 2019. NASCAR could rightfully counter that this deal provides the necessary fuel (last racing pun we promise) to increase the number of bets given that Genius Sports can provide the information sports bettors need to get more involved with the sport.   However, NASCAR’s deal is not only about increasing the number of sports bets by current sports bettors. As Genius spokesman Chris Dougan  said , "What could happen in the next five seconds? What could happen in the next lap? It opens the door to a massively exciting new market. NASCAR is now starting to recognize this is a huge fan engagement tool. We give them that distribution and that reach."  When the Supreme Court struck down the Professional and Amateur Sports Protection Act (PASPA), many thought that this would be a  boon  for sports leagues and teams. While leagues have been unable to charge the integrity fees to monitor sports bets that they originally would have preferred,  leagues and teams  are signing on new partners endemic to gambling.   Yet, the NASCAR and Genius Sports partnership highlights the bigger opportunity which is potentially for sports right holders to sign more non-endemic sponsors because of gambling. One of the most common questions that Block Six Analytics (B6A) hears from current and potential clients is how do we demonstrate to non-endemic partners or companies unfamiliar with our sport how they will generate value through a new relationship.  Gambling and non-endemic partnerships demonstrate one of the benefits of using B6A’s  Corporate Asset Valuation  (CAV) model. One critical reason that companies want to partner with sports organizations is the level of fan engagement. In particular, fans have a figurative investment in their favorite leagues, teams, athletes, and / or events.   Making it easier for people to gamble on NASCAR makes it easier to change figurative investments into literal ones. This makes it more likely that the exact people companies want to reach are now more likely to be involved with a sport. These  fans  are often disproportionately more diverse, higher-income, and / or more highly educated audiences that companies want to target.   The CAV model translates increased engagement into tangible return on investment (ROI) and return on objective (ROO) metrics. In essence, no partner is “non-endemic” if the company can understand the specific economic and brand impact that having increased fan engagement has for each company given its business goals. The CAV enables our team to develop the insights within the  Partnership Scoreboard  that enables our clients to communicate this value to non-endemic partners.   While sponsorship plays arguably as big role in NASCAR as in any other sport, connecting with non-endemic partners is a challenge not unique to NASCAR.  Betting enables having an increasing number of these demographics to have an increased likelihood of engaging with a game, contest, or event because they are literally invested in the outcome. Companies of all types can be the beneficiaries of this engaging content by activating partnerships with sports organizations in ways that maximize the likelihood of connecting with their audiences.

BY ADAM GROSSMAN

NASCAR Bets On Fan Engagement With Genius Sports

NASCAR recently announced a new partnership with Genius Sports to be the official provider of racing data to licensed sportsbooks. This enables Genius Sports to provide the NASCAR official data necessary to for sportsbooks to provide, “up-to-the-minute odds and a slew of traditional wagers and prop bets.” NASCAR’s deal is not only about increasing the number of sports bets by current sports bettors. As Genius spokesman Chris Dougan said, "What could happen in the next five seconds? What could happen in the next lap? It opens the door to a massively exciting new market. NASCAR is now starting to recognize this is a huge fan engagement tool. We give them that distribution and that reach."