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MIT Sports Analytics Conference

March 7, 2010

Saturday I went to the MIT Sloan Sports Analytics Conference.  Well worth it.  Normal tickets were going for $200, but as a current MBA student, I got a ticket for a reasonable $75.  This $75 included breakfast, lunch, snacks, a t-shirt, the hardcover Freakonomics sequel, some other random goodies, and some excellent panel discussions.  The keynote panel was by far the most fascinating, but we’ll take a chronological trip through the day to keep things organized.

On Friday night, I caught a train from New York to Boston with a couple of buddies from Wharton.  4.5 hours is a long time to spend in the café car of an Amtrak train, but we passed the time by talking about classic Schwarzenegger movies and mixing in naps.  Once I got to Boston around midnight, I cabbed it over to my friend Steve’s place (co-worker at Deloitte, current HBS student).  After a couple beers (very nice Harpoon Irish Ale), I got to bed at 3AM with a 7AM wake up call waiting for me.

Panel 1: Developing the Athlete’s Brand

The next morning, I packed my stuff and headed over to the conference.  I missed the opening remarks, but got a good seat for my first panel of the day- Developing the Athlete’s Brand.  The panel consisted of a couple agency execs, two basketball shoe execs, and Jackie MacMullan, of ESPN’s Around the Horn fame.  The most polished panelist was Phil di Piccioto- a president at Octagon.  He made some good points about the difficulty of building a brand around Olympic athletes (because their story needs to live beyond the 17 days in which they compete).  He cited Apollo Ohno’s foray into Dancing with the Stars as a good example of an athlete who made himself relevant beyond the Olympic stage.

The surprise of this panel was MacMullan.  I’ve never been particularly impressed with her TV work, but she really added some great color to the otherwise cliché-filled (“building a brand”, “being relevant”, “reflecting our values”) conversation.  In particular, she had an insightful story about Dennis Rodman (brown haired, Piston Dennis Rodman) crying in a locker room in response to an arena of boos directed his way.  His tearful question to MacMullan: “Why don’t people like me?”  Next, she made great points about Charles Barkley’s ability to be himself and be marketable, despite his array of flaws.  Finally, when pressed about what Tiger should do next to move on and restore his brand, she compared his plight to that of Mark McGwire, who “finally got it right” when he spoke openly about steroid use.  Perhaps too little too late, but at least the public got to see McGwire’s authenticity, whereas Tiger’s handlers have fueled this circus with carefully guarded secrecy and an insincere press conference.

Panel 2: International Expansion

Panel #2 was all about international expansion in pro sports leagues.  The three coolest panelists were Mark Waller (NFL CMO), Sunil Gulati (President of the US Soccer Federation and Columbia prof), and Maurizio Gherardini (SVP of Operations for the Toronto Raptors).

The first great point made during this panel came from the Italian.  When discussing differences between European and US fans, he dished out a great quote: “(In Europe) once the game has started, it’s like church.  You can’t get up in the middle to leave or get a hot dog.”  Waller concurred and offered a story about when he attended a Chelsea game with Roger Goddell.  Mid-game, Goddell asked his hosts if they could visit the in-stadium souvenir shop.  The hosts gave Goddell a puzzled look and responded, “The game has started.  The souvenir shop is closed.”

Gulati then made some good points about competitive differences between US leagues (especially the NFL) and the European club leagues.  The bottom line is that US leagues are structured to provide parity, while Europe revolves around a David vs. Goliath world in which each league is dominated by 2-4 teams, and no one complains.  The bottom-dwellers have relegation and local rivalries as motivating factors, which engage their fans.  In the NFL, there is no threat of relegation, but teams rely on league structures (salary cap, draft, etc.) so that an “any given Sunday” atmosphere prevails.

The final key point made by this panel came from Waller, who likened the NFL’s new strategy on international growth (i.e., putting its best product out on the field in foreign cities like Toronto and London, instead of pouring money into hapless teams of no-namers in NFL Europe) to Coca-Cola’s long-term pursuit of global market share.  He emphasized time and again that the NFL believes its game, although tough to learn (like cricket) is the best entertainment sport on the planet.  Similar to Coke, the NFL realizes that building global presence will take time and lots of touch points (participation, “showcase” games, marketing, etc.).  Overall, I think this is a winning strategy.  It’s better to take your time in converting people to Coke than it is to try to quickly hook them on a second-rate product.

Lunch

Lunch was a bountiful boxed lunch, accompanied by The Parthenon Group’s thoughts on whether sports spending will recover along with the general economy.  This presentation (led by Parthenon’s chief economist) was surprisingly enlightening.  He focused on two key points:

  1. Pro spectator sports have shifted from a distraction for the common guy to a luxury event
  2. Smart teams can still cater to both the white and blue collar fans, if they handle pricing correctly

On the first point, he highlighted historical data that suggested leagues that responded to economic downturns by lowering prices got hurt, while teams that raised prices were able to better weather tough economic times.  It’s hard to argue with his point about spectator sports becoming a luxury good as I walk to my seat at Conseco Fieldhouse carrying a $6 hot dog, $8 beer, and $7 nachos (plus the jalapenos for an extra $1).

Second, he discussed some of his consulting work for various NBA teams that focused on squeezing revenue from wealthier fans while keeping the rabble (to borrow Potter’s term) content.  To do this, teams inflate prices for prime seats (mid- court, 10 rows up), while keeping a ring of nosebleed seats at excessively low prices.  This allows maximum extraction from the less price-sensitive customers, while keeping the game accessible to die-hard fans and kids.

Panel 3: What Geeks Don’t Get: The Limits of Moneyball

This panel was loaded with stars- all guys I wanted to see.  Here is how each one stacked up on a scale of 1 to 10.

Panelists:

Mark Cuban (Mavs Owner): 8

Plenty of jokes about NBA referees, but he did not let his huge personality overwhelm the panel.  Great balance between his irreverence and his sharp insights (like the Random Walk on Wall Street comparison to the “ceiling” of sports analytical capabilities).

Jonathan Kraft (Patriots President): 7

I assumed he would be a paperweight sitting around his dad’s office, but he actually made some great points and interacted humorously with the other guys.  He seemed to have an excellent sense for the business side of sports, and enough of an understanding of the game itself to get by pretty well.

Daryl Morey (Rockets GM): 7

This guy is known as “the stats guy” in NBA circles.  He had some good anecdotes about being a non-athletic guy who has succeeded as a GM, and was a funny guy overall, but he got a bit overshadowed by Cuban’s star.

Bill Polian (Colts President): 10

Admittedly, I may be a bit biased, but if the tweets immediately following this panel are any indication, I was not alone in thinking that Polian owned this panel.  I knew he was a good GM, but listening to his simple way of explaining complex things like NFL matchups, tactics, and techniques was truly amazing.  I assumed a guy like him, especially an older dude, would talk a lot about “gut” or “feel”, but Polian was thoughtful and methodical when describing his methods.  He was more articulate and well-read on analytics than I expected, but he still finished up by saying that even the best drafters only “bat about .550” and that stats aside, there is a built-in, God-given knack for evaluating talent- “just like some people are born better singers or writers, some people are born with a better eye for evaluating talent.”

Bill Simmons (Sports Guy): 3

I generally like Simmons’ writing as the Sports Guy.  Today, however, Simmons was a dud.  Perhaps it’s not all his fault.  Although he’s a big name, he didn’t quite fit in on this panel.  He spent half his time asking questions and hijacking Lewis’ role as moderator, and the other half of his time repeating things that had already been said.  Additionally, the fact that he said the word “whatever” once every four words didn’t look too good compared with charismatic guys like Morley and Cuban.

Moderator:

Michael Lewis (Moneyball, The Blind Side author): 5

The best moderator of the day was Boston Celtics play-by-play guy Mike Gorman.  He was pithy, kept the subjects moving,  and stayed out of the way of the panelists.  Lewis was the opposite.  He was long-winded, and let certain topics simmer for too long.  I think a better set up would have been to see Simmons moderate and Lewis panelize about his extensive research and experience in the world of sports statistics.

The highlights of this panel were the banter between Polian and Kraft about the infamous 4th and 2 call this year and Cuban’s thoughts on “protecting the moron”.  The Polian/Kraft discussion began with a careful analysis by Polian of the situation.  Polian cited the Pats’ depleted defense, element of surprise (they came out in a Brady sneak formation and ran a different play), the Colts’ hot offense, and Belichick’s historic 4th down success as reasons why he supported Belichick’s decision.  He closed by saying that he gets tired of hearing from researchers that teams should go for it on 4th down in X and Y situations, because each situation is unique, and certain factors (such as momentum, injuries, etc.) are not captured in these general statistics.  Polian quipped, “For a given in-game situation, the stats are not wrong.  They are just irrelevant to that particular moment.”  Kraft showed a healthy respect for Polian’s analysis and agreed that in that situation, he too would not second-guess the coaching staff’s decisios.  This playful, thoughtful interaction was only hampered by Simmon’s disagreement with Kraft and Polian.  Instead of making a coherent point, Simmons just insisted that he thought the Pats’ decision did not come from a “position of strength”.  Whatever the hell that means.

The second highlight came in the midst of a discussion about psychology in sports.  Cuban, Morey, Kraft, and Polian all discussed the rigor with which their organizations approach psychological vetting of their prospects.  Apparently, hammering junior high school teachers about a 22 year-old’s personality is pretty common.  Surprising when you look at how many personality busts happen each year, but sensible when you consider how many millions of dollars these guys are throwing at these players.  Cuban admitted that none of these tests are perfect, and that sometimes guys with bad attitudes or no brains sometimes slip through.  Because of this, Cuban pointed out that it’s important to “protect the morons” on your team so that when you decide it’s time to trade such players, you can dump them to another team at an inflated value.  Cuban cited players who can’t remember plays as soon as they break from a time-out as those whose lack of mental aptitude should be hidden as much as possible.

Panel 4: Social Media

The final panel of the day focused on a fascinating topic, but got stuck in the moderator’s (John Walsh of ESPN) lack of subject matter knowledge.  I think I heard a variation of the question “How should teams respond/have responded to social media?”.  Poor moderating aside, Jeff Ma (yes, the MIT blackjack dude who was portrayed in “Bringing Down the House” and later “21”) and Darren Rovell of CNBC put on a good show.  The Pittsburgh Pirates CMO was woefully uninformed about social media- he spent the 80 minutes throwing in clichés about surveying fans, being in front of social media, and “understanding his customers” in a dead-on Paul Giammatti voice.  Ma and Rovell provided the fireworks.

When another panelist brought up privacy concerns, Joe Kessler made a great point that younger generations don’t even think about privacy- they post their entire lives- pictures, status updates, and texts- to the world.  In the context of watching over players to make sure their tweets and other media are suitable for fan consumption, Kessler noted, “The idea of controlling this content is dead.”  Great point.  The teams that will get the most from this are the ones that will educate their players on how to tweet and post well, not the ones who curb their players’ creativity.

The final big takeaway from the social media panel came from Ma.  He was far-and-away the most tech-savvy guy on the panel, and his smarts and Silicon Valley experience came through when discussing cannibalization of traditional media (radio, TV, etc.).  Ma emphatically claimed that social media is actually additive, and not cannibalistic.  For example, when you are at home, you’re not going to watch the big game on your iPhone, and when you’re in your car, you’ll listen to the game on the radio.  In other words, teams and leagues should stop worrying about “protecting” their content and focus on pushing their content to fans in as many ways as possible, and only then worry about monetizing this content.

Conclusion

Big ups to everyone at MIT for putting this together.  Top-notch panelists, smooth logistics, and great discussion topics made this a very worthwhile trip to Beantown.  It’s just a shame I couldn’t stick around for an extra night.  I’m back on the Amtrak and feeling veeerryyy sleepy.

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