The following article was written by 2013 SSAC panelist Lou DePaoli, EVP and CMO of the Pittsburgh Pirates.
Like many other executives in the Sports and Media industries, the MIT Sloan Sports Analytics Conference (SSAC) is the highlight of my calendar every year. I feel it is hands down the best conference in our industry. Here are a couple of reasons why:
• SSAC is a “5-Tool Player”– it delivers the key elements that an ideal conference should offer: evolving and engaging topics, best-in-class speakers and presenters, valuable networking, excellent planning and logistics, all combined in a great setting.
• SSAC is a “Game Changer” – the impact this conference has had in how decisions get made in our industry, on and off the field, has been nothing short of revolutionary. Many of the topics that were presented, debated, and analyzed during the first six years of this conference have led to an evolution in analytics-based decision-making that is now utilized by most team’s front offices and has also become part of the lexicon used by broadcasters, writers, and fans.
As someone who has participated as a panelist in each of MIT’s Sloan Sports Analytics Conferences to date, it is amazing to see how the SSAC has grown overall but more specifically how it has grown in terms of its content related to the business side of sports, which is where my focus is. The business-related panels in 2007 were more general topics such as Fan Management, Sponsorship, Media Rights, and Careers in Sports, while the 2012 Conference had business-related topics on Ticketing Analytics presented by Stub Hub, Business of Sports, Winning Off the Field, Fanalytics, Competitive Advantage: Sports Business Analytics, and Brand Equity: Valuing Sports Sponsorship, just to name a few. The evolution of the topics alone provides a good snapshot of how the value of analytics has grown in a short time thanks in large part to this conference.
In preparing to write this blog entry, I took a reflective look back at my own career to see how business analytics have evolved and how the complexity has changed, as well as the acceptance and reliance on analytics to drive decision-making. It was quite interesting to see how things have changed.
Starting with the Florida (now Miami) Marlins in 1996, we used fan surveys and focus group data to drive decisions on our packaging of our season ticket plans (primarily focused around weekend dates), aggressively grew our database by gathering contact information in-stadium to find out who was actually attending our games, and created sales territories and goals for our ticket sales reps based on historical sales data and key demographic information. These were all fairly rudimentary by today’s standards, but certainly cutting edge at the time. That said I always felt there was more data that needed to be made available from either the other MLB teams or from MLB itself, which led me to my next role at the NBA.
Upon joining the Team Marketing and Business Operations Department (TMBO) at the NBA League Office in late 2000, one of the very first things that caught my attention was the potential to access a treasure trove of information gathered from league reports, ticket pricing submissions, sponsorship elements, successful sponsored promotions, premium items, etc. The data from an individual team can only tell you so much, but the data from an entire league over a period time is very powerful. Our goal in TMBO was to focus on the points of data that could have the largest and fastest impact on revenue generation for the teams. Two major areas that we focused on were:
• Determining Ticket Sales Best Practices – we standardized the gate receipt reporting process and the data included in the gate submissions in order to get a true handle on which best practices were worth sharing across the league, and to compare each team’s sales results on a more level playing field. Again while not overly complex, the reports created back in 2001 are still in use today and have been replicated by other leagues.
• Ticket Price Optimization – we developed metrics to track the impact of ticket price changes over time along with how to best scale a building from a pricing perspective. Ticket revenues are a vital source of revenue, but one that is variable from season to season. The goal was to help teams make better pricing and scaling decisions to maximize revenues without negatively impacting tickets sold.
These key items are just two early examples of TMBO’s ability to take analytics to the next level in an effort to help NBA teams. Since this meager beginning TMBO has become the “gold standard” in the industry for consulting services, which is driven by their analytical approach.
But in the winter of 2007, the analytics revolution was about to take off across our industry. While many knew of “Moneyball” and had cursory knowledge of Bill James’ works over the previous two decades, most had no idea what other teams and fans had been developing on their own, mostly in anonymity. The first SSAC shined a light on people who were making huge strides in analytics such as Daryl Morey, Sam Presti, Dean Oliver, Paraag Marathe, and John Hollinger just to name a few. The reaction from the media and interested fans catapulted this small conference held in classrooms on MIT’s campus in 2007 to the top of the charts in a very short time.
The first SSAC opened my eyes as well to the bigger and broader scope of what is possible from a business perspective. Thus, when I started with the Pittsburgh Pirates in late 2008, one the first things I did was create a Business Analytics department whose sole function was to become the analytical engine to drive the majority of our revenue generating decisions. This concept was something I discussed with our President and Owner prior to coming on board in order to make sure they were willing to support this concept 100%, which they did and continue to do. We were fortunate to have a person on staff that shared the passion for data and analytics, had a solid vault of information, and came from a sales management and operations background. We quickly added an MIT grad and have since added two Carnegie Mellon grads to the department, bringing us to four full-time people focused solely on the ultimate goal of increasing revenues while optimizing our expenditures.
That sounds nice, but does it work? I would say yes, and could elaborate forever on their hard work and accomplishments to date along with what our goals are to keep growing going forward. But the real proof is in the results. Since 2009, Pirates attendance has grown at the fourth highest rate in MLB at (34%) and gate receipts have grown by 60%. During that same four year window, our team’s winning percentage improved every season, but was still the second lowest in MLB during that stretch. Can all of the growth be attributed to business analytics? Definitely not, but can I unequivocally say that it has had a dramatic impact in just these two areas alone? No doubt. Plus, this department has done many other things that “don’t’ show up in the box score” such as creating richer reports and dashboards, building and managing our database and CRM systems, predictive modeling, segmentation, fan surveying and analysis, and forecasting just to name a few. Further proof that it must be working is seeing other organizations such as the Houston Astros, Cleveland Indians, San Diego Padres, Arizona Diamondbacks, Orlando Magic, and MLB’s League Office, to name a few off the top of my head, following suit and creating similar departments. This is proof that business analytics is gaining acceptance by an ever-growing audience, and this acceptance can be largely attributed to the success of the SSAC.
For those reading this who have never attended the SSAC and/or are already in the sports and media industry and are not utilizing business analytics to drive revenues, I strongly encourage you to attend the SSAC as the information shared is off the charts. If you haven’t already purchased your tickets for the 2013 Conference (they go quickly!) make sure you do. Also follow SSAC via Twitter (@sloansportsconf) and follow the conference via live stream on March 1st and 2nd as it will assuredly provide groundbreaking ideas from a sports and business perspective while also providing excellent entertainment.
Editor’s note: The views expressed in each post are those of the author(s) only and not those of the conference organizing team or blog sponsor.