A Stranger in a Strange Land (Part Three)

My Journey to the MIT Sloan Sports Analytics Conference

(This is the final installment. Read more in parts one and two.)

The final day of the conference came quickly. After the Celtics game, I went back to my hotel and started looking through pictures from the previous day. I had already been following the Wolves-Sixers game on my (new) cell phone, so I knew how that had gone. Not great. I also knew I wouldn't have much time to write anything the next day, so I wrote the preview for the following night's game against the Washington Wizards. I had a Mountain Dew: Code Red, watched a little SportsCenter and went to bed.

The next morning, I arrived to the Convention Center a full half an hour before the panels started. There was just so much to see and to do that I didn't want to miss anything. I gabbed about David Kahn with some Knicks bloggers. I shook the hand of one of my idols, David Thorpe, and tried not to blush like a little girl. I ate a couple of the free pastries.

I made sure to get a good seat for the first panel of the day.

Panel Four: New Owners. The Challenges and Opportunities.

Moderator: Vice President of Customer Marketing and Strategy for the Kraft Sports Group, Jessica Gelman

Panelists: Boston Celtics co-owner and CEO, Wyc Grousbeck; San Diego Padres owner Jeff Moorad; Golden State Warriors owner Joe Lacob; President and GM of the Toronto Maple Leafs, Brian Burke; ESPN columnist Bill Simmons

For me, saying that owning a basketball team is a dream is like saying that a Maserati is a car. The word doesn't do it justice. So, sitting a few feet from four people who have owned professional sports teams was exciting to say the least. I'm still not exactly sure why they invited Bill Simmons to this one.

Jessica Gelman, to her credit, mostly asked questions when appropriate and disappeared. She began with the seemingly obvious question of, "why buy a team?"

Jeff Moorad, who is a majority owner of the Padres and a previous owner of the Arizona Diamondbacks, started by saying that in order to be a good sports owner, you need a passion for sports and for business. His financial goal is to break even each year while meeting the on-the-field goal of winning baseball games.

Celtics' owner Wyc Grousbeck, who put together and led the group Basketball Partners LLC to purchase the Celtics in 2002 for $360 million, said that owning the team is really about Celtic Pride. "I could make more money elsewhere, but winning is more fun. Losing money and winning is still great."

Bill Simmons chimed in that he believes there are three reasons people buy sports teams:

1. The monetary investment.

2. A hero complex. He believes someone like Joe Lacob buys the Warriors because he knows how much he'll be loved if he can turn the team into a winning franchise.

3. To feed the ego and be able to show off the team like another toy. He made a not-so-subtle reference to Donald Sterling belonging in this last group.

Joe Lacob said that he didn't fit any of those three groups.

"I've wanted to own a team since I was a little kid. I always planned to do it. Sure, I want to make money, but I want it to be fun." Lacob related how he had looked at several teams, not just basketball teams, over a period of time and was interested in a few of them...but never closed the deal on any of them. He joked that David Stern called him a "tire kicker". He eventually settled on the Golden State Warriors because basketball is his favorite sport and Oakland is his hometown. "The fans trust you more if you're not an outsider."

Moorad bought the Padres using what he called a "path to control purchase". Instead of buying the team all at once, his ownership group will make payments over a three year period to the original owner, who will stay involved with the team until the period ends.

Lacob talked about how some believed he overpaid for the Warriors ($430 million). Lacob said that, "you have to take advantage of a situation. There are only so many teams. It's tough to talk about proper valuation. It's about passion. Either you're all-in or you're not."

At this point, Brian Burke chimed in that the shortest learning curve in sports is a new owner. He joked that he's worked for new owners who will start giving him strategy pointers only two months after taking over the team. "Some guys buy a team for ego and then forget the business skills that made them so successful in the first place. They make some terrible decisions."

Burke continued, "sports is not like any other business. It's tough to be successful and that's hard for some owners to process. You can't turn it around in one year. Any other business, would you hire someone as a salesman if you know he wouldn't contribute for two years?"

Grousbeck added, "I bought the team and looked at the last 25 years in the NBA. Every champion has had a Big Three except Detroit. We had a 5-year plan to acquire a Big Three - not necessarily the guys we got, but that type of team - and win a title. Danny Ainge targeted KG."

Lacob: "I benefited from relationships with other owners. I didn't make quick trades or quick decisions about firing personnel. You need to take the time to evaluate. In the NBA, you should make the playoffs every other year on average. We've only done it once in the last 16 years. So, putting a solid plan in place was critical."

Gelman prompted the owners to talk about how minority owners fit into the equation.

Bill Simmons joked that some minority owners think they'll get far more say than they actually will. He likened it in some cases to a really expensive season ticket.

Lacob: "I try to include minority owners. I have board meetings. I get them and get information. Before me, there were no board meetings and there were a lot more pissed off limited owners."

Grousbeck: "Prior to the Kevin Garnett deal, we gathered all seven minority owners and had Danny explain the deal and the extension that KG would sign. We hashed it out. I'm much happier with 8 people on the board agreeing to a decision that just one person."

Moorad said that limited partners reminded him of two different stories. He talked about George Steinbrenner and joked that a limited partner of his barely got a parking space. He contrasted that with Arizona, where the team had 73 limited partners. He said that a smaller team of owners allows for more inclusion and for better decisions.

How does an owner evaluate talent?

Moorad: "I don't. I try to hire the best GM and leadership, trust them and let them be autonomous. I do give them a budget, but other than that, I believe strongly in that approach. I have three reports: the CFO, the team president and the general manager. I don't meddle beyond that. I want to know and stay informed. I might give insight or knowledge. But I believe in letting people do their jobs."

Brian Burke, the panel's lone GM, said that, "there are only two hands on the steering wheel and they're mine. If I see a third, there's a problem. I start every interview asking about who I report to and how much control I'll have. I only want to report to one guy."

Public financing?

The panel also discussed stadium funding and how difficult it can be to get public financing. Joe Lacob mentioned that Oracle Arena is dated and that his team is looking at other options. "Things can be done privately with some public help." He mentioned that he could get out of the Oracle Arena lease in six years and would consider getting into a new arena.

Input from star players?

Grousbeck, the Celtics' owner, joked that he "can't pick which star to think about." The panel agreed that while the support of star players is important, you don't want approval from star players. Ultimately, you need to make them see why decisions are in their best interest and help them to jump on board.

Former player owning teams?

Bill Simmons said that, "it's usually a disaster. Owners are very competitive, but for some reason, they seem to make decisions based upon how things were when they were playing. They don't seem to be good at adapting to the new game."

The panel brought up Mario Lemieux, part owner of the Pittsburgh Penguins, as an example of a successful former player.

Moorad added that, "Troy Aikman is in our ownership group. He's a football guy, but he's part owner of a baseball team and he makes a great effort to learn. He is probably as prepared as anyone in the ownership group."

How are owners held accountable? Is it fans or bloggers or both?

The panel agreed that fan support is the most important piece. Lacob offered that, "people vote with their feet. Season ticket renewals. Fans see us at games and let us know personally."

Burke: "We want to reward people who buy tickets. They are first, TV is second."

Lacob added that he wasn't concerned about bloggers because, "unlike every real fan, they don't even have season tickets."

Moored: "Our responsibility is to have a fan go home, even after a loss, feeling good and wanted to go back. We compete with the beach, so we need to have a great experience at a game."

Is it better to squeak into the playoffs with veterans or miss them with a young team?

Burke answered first. "We're not in the game for the playoffs. We want a parade. We don't want to get 2nd. [In the Olympics], winning the silver medal sucked. If its the goal of the owner to just get into the playoffs, I don't want to work for him."

Simmons: "In basketball, the worst place to be is no man's land. Look at a team like Indianapolis. 40 wins consistently is terrible."

Grousbeck: "One player can change everything in basketball. Not in other sports. Being in the lottery is much better than just missing the playoffs."

Panel Five: The Business of Sports

Moderator: Sports journalist Andrea Kramer

Panelists: Executive Vice President of ESPN, John Walsh; President of the U.S. Soccer Federation, Sunil Gulati; President of Game Plan LLC, Randy Vataha; Boston Celtics co-owner Steve Paliuca

Kramer began the panel by asking the group if there was one thing they could change about the business of sports, what would it be?

Randy Vataha: "I would take the business of sports out of the CBA and put it into the business planning process. We can find out how both sides can generate the most income, instead of horse trading in CBA negotiations."

Sunil Gulati: "As a soccer guy, I would ban the use of hands in every other sport."

Steve Paliuca: "I'd like to give every team a chance to win. Sometimes, it's pre-ordained who will win a game or even a title. Fans need hope."

John Walsh: "All of sports needs to understand the economy we're in. Instead of observing, people are participating and creating. We need to show more concern for the customer. Fans want to see games played, not people fighting over millions of dollars."

Kramer asked Gulati if lockouts in the NBA and NFL could be good for soccer, since sports fans will need something to pay attention to in the sports world.

Gulati answered: "I don't think so. Fans forgive and forget pretty quickly. There might be a little increase, but I don't think soccer will get fans because of a work stoppage." Gulati went back to Paliuca's comment and added, "The European model is the antithesis of [parity]. There is not the belief that 'everyone deserves the chance to win'. That's why you'll usually see the same teams winning in the Premier League, for example."

Walsh turned the conversation back to the fan and how teams can appeal to the fan. "TV used to try to duplicate the game experience. Now, live games try to duplicate the experience that you would get on the TV."

Paliuca agreed. "I spend a lot of time talking to players about fan relations. We like to have the players slap five with the fans and interact with them before and after games. We like to have players go out into our communities. We've done a pretty good job, but when Shaq came here, he turned it up a notch."

Kramer: How do you think player safety should be addressed in the new CBAs? What do you think specifically about the NFL and the proposed 18-game schedule in light of what's going on with concussions?

Walsh: "The average lifepsan of an NFL offensive lineman is 57 years. The new CBA needs to focus on benefits for current and retired players."

Paliuca; "Players who are this young aren't thinking about the future or what will happen if they get seriously hurt. I think the problem will change when it goes from being viewed by the leagues as 'bad PR' to 'how do we fix the problem'?"

What is the media's influence on sports in the new world of social media and 24-hour news cycles?

Walsh: "I don't see why anyone would listen to the media. Especially some of the guys who are just screaming on the radio. There is never any context to it."

Gulati: "The conversation in the bar is now in cyberspace forever. Everyone has a megaphone. Now, instead of a private conversation, we hear it when someone calls us an idiot and it has an influence."

Kramer: "Players are starting to take media into their own hands for this very reason."

Randy Vataha: "The media can turn fans against players and coaches very quickly. They'll take up a narrative, develop that narrative, and in some cases, will have an influence on whether that narrative comes true. Media influences business decisions in sports all the time."

Paliuca: "For instance, after we traded Kendrick Perkins, we took a beating in the media. Perkins was a good friend of mine. I went to to his wedding. But you have to make business decisions that are in the best interest of the franchise long term. Sometimes fans don't understand that."

Kramer brought up Charlie Sheen, Hosni Mubarek and Muammar Gaddafi as non-sports examples of people who have been significant impacted by the use of social media. Randy Vataha mentioned Tiger Woods and how, after an accident on his own property, the world knew about it mere hours after it happened.

"Tiger didn't just hurt himself. He hurt the tour. Players, and especially teams, have to proactive with social media, stay on top of the technology and protect their brand."

Walsh: "No one lives a perfect lifetime, but mistakes that all of us made as kids are now broadcast to the world."

Steve Paliuca took a cue from Kramer and asked John Walsh how a news organization decides to do a show like, "The Decision". Paliuca said he was with Dan Gilbert at the time of the show and he saw how much of an impact it had on him.

Walsh got a little defensive and said, "Look, this past offseason was the greatest offseason in the history of sports in terms of build-up and excitement. It was just one press conference like athletes have been doing for years. When high school athletes go on TV to announce which college they will attend, that's no different. Perhaps we should have been more transparent in how it happened. But we'd do it over again in a second because it was huge in the ratings."

Panel Six: The Future of the Game-Day Experience. HDTV vs. Live Events

Moderator: ESPN senior writer Ric Bucher

Panelists: ESPN columnist Bill Simmons; President of the Kraft Group, Jonathan Kraft; COO of the Dallas Cowboys, Stephen Jones; Dallas Mavericks owner Mark Cuban

 The final panel of the day was also the most popular. The two biggest draws of the conference - Simmons and Cuban - bickered back-and-forth about many subjects with Cuban always seeming to make the better argument.

To begin the panel, however, Ric Bucher asked Stephen Jones about the giant video screen at Cowboy Stadium and whether building that screen was an answer to HDTV.

Jones: "The screen fulfills many things. It gets people out of the house. It was a once in a generation project that is supposed to provide a great experience. Ticket holders in the upper decks can get a great experience that is closer to the game. While it was designed primarily for the Cowboys, the screen is also used for other events and has been wildly popular. The biggest challenge with the screen is the content, but you have to give people a reason to take the time to come out to a game."

Kraft: "There is always something about the live experience, but it is important to make that experience as quality as possible. Old Foxboro Stadium wasn't an enjoyable place to be. We built Gillette Stadium to add to the fan experience and to make a game a community event. We want to feel the energy from a crowd. The fan needs to feel that he or she is getting value. Video is an important part, but not the only part."

Cuban: "It's also important to make the experience memorable and cost-effective. The first game you ever went to, you don't remember the score, you might not even remember who won. You remember the experience. If you're texting at a game, I've failed. If you're looking down instnead of looking at the action on the court or on the screen, I've failed. Electricity isn't only something that powers devices."

Simmons talked about how he misses games where there was no Jumbotron, there were no cheerleaders and PA announcers didn't have to get the crowd to cheer. Cuban said that "some people live in the fast lane, Bill lives in the past lane," which drew many laughs. Cuban reiterated that not everything old is good and not everything new is bad.

"I spend hundreds of thousands on Jumbotron entertainment. One time, we had a fat guy dancing on the Jumbotron and people loved it. I figured that if one fat guy is good, 12 fat guys are better. The KissCam is a standby favorite that people love. No one goes to a game for jumpshots. They go to have a fun time."

Jones added that, "kids love it. We watch other teams for tips, including Mark's Mavs, and will borrow things for our own entertainment."

Kraft: "Football is different from basketball, too, in that there are more breaks in the action and those beraks are longer. People want to check other games, so we don't mind if they text, as long as when the game is back on, they are invested."

Cuban: "In Dallas, that board is captivating. I had to watch it for the first three games before I could come to a game and watch the field."

Simmons said that its easy for someone like Mark Cuban, whose team is good, to draw fans. He said that its a lot harder for a team like Charlotte to draw fans and to use entertainment to give them an 'experience'. Cuban disagreed.

Cuban countered by saying, "A good team averages about 20,000 fans a game. A bad team averages abotu 15,000. So, there's only about a 5,000 fan gap between a great audience and a bad one. There is the same audience base for good and bad teams. Even a bad movie can be a great experience. People like you and me, and many of the [bloggers] out there, take games more seriously. But most fans just go home and forget about the result."

Ric Bucher asked if the owners thought it was a problem when people come to the stadium, but stay in the clubs and restaurants, and aren't at their seats watching the game.

Kraft: "It's not a big problem. If they're are in the building, they can do what they want. Sometimes, they want to be able to watch other games and they can do that in our stadium. We spend 1/2 a million this year to put more WiFi in the stadium. When costs come down, we want to get better WiFi in our setadium."

Jones: "Getting people there is the key. If they are there, then you can start worrying about changing their behavior. If you get the right product out on the field, people will start watching and cheering."

What is the 'carrot' for getting people out to the stadium?

Jones: "You start with the product. If you're winning, you're way ahead of the game. Travel time is also huge. If you can cut down the time the people are sitting in their cars, people will be more willing to come out to a game. We spent a lot of money designing our parking so that people can get in-and-out easier."

Kraft: "I agree with that. We're also exploring other technologies for our fans. We want to be able to have WiFi in the whole arena. We're looking at giving season ticket holders in the stands access to coach-to-quarterback communication on a five second delay. We want to eventually mic up every player, so that fans can get those feeds on their phones and devices."

Cuban: "I want to make technology a big part of the experience. Prompts keep kids involved and that's important."

Jones: "Some of what we have to do is provide an educational product for the kids. Most people at games aren't die-hards. A good percentage of NFL fans have never seen a game live, so when they come to one, you need to make sure people understand the game and are engaged."

Cuban: "Back to Bill's talk about the 'good old days', I think we have a misconception of how those days actually were. The Celtics and Knicks didn't sell out their games back in the early 80s. Games were on tape delay. I remember paying $10, getting a lower-level seat to a Celtics game and heckling [Robert] Parish all game long. It's not like that anymore."

How do you make sure pricing is good for your fans?

Jones: "We think more people is always better and gives more energy to our team. We have something for every income level. Our standing room only seats are cheap and give all walks an opportunity to come see Cowboy games."

Kraft: "I guess we're kind of the opposite. We believe part of the quality of the experience is exclusivity, especially with season tickets. Not a ton of capacity, and no general admission, limits the fan base and our prices are relatively high. However, we don't charge any personal seat licenses, which we feel is fairer for our fans."

Simmons: "If I were in charge of a team, I'd build a 12 thosuand seat stadium and gear everything towards the lower bowl. There would be no worries about ticket sales and there would likely be a waiting list for season tickets."

Cuban: "Tickets are becoming less of a part of overall revenue. We use dynamic pricing now, so in case we suck, we'll still be a good deal."

What will the game experience be like in 10 years?

Simmons: "I think season tickets will go away. Single game tickets are now cheaper and easier to get. You can pick-and-choose which games you want to go to and make it cheaper than buying 40+ games a year."

Cuban: "Here is why [Bill] is wrong. The only reason why a secondary ticket market exists is inefficient pricing. Dynamic pricing helps to fix that."

"That being said, if you can predict what will happen 10 years from now, it's a boring decade. We're trying to do more with augmented reality. Maybe you use your phone to scan something on your ticket and a video of Dirk Nowitzki will play. We want to use apps to enhance the experience. Twitter is a great opportunity, but that's the past. How can Facebook be new and different when there are 500 million people on it? If everyone's looking at something, you're looking in the wrong place."

What is the balance of the on-field product with the in-arena experience?

Jones: "It's equal. You have to make huge investments in both."

Kraft: "If you're in sports, the fan base needs to believe that the team is committed to success, even if the team is not ultimately successful. Anybody will go to a game once or twice, but for long-term fans, they need to trust the organization." 

Cuban: "Look, you can wait to see a movie from Netflix, but the theater is still an experience. I went on movie dates to not talk and then would have something to talk about with the girl afterwards. You need the path of least resistance for customers. You can't make it hard to go to the games. Good transportation is just smart business, and sometimes that means investing in the infastructure of the roads around the stadium."

Kraft: "We charge a lot for parking so that people will car pool. We want fewer cars on the road, which will enhance the experience for people who do drive to the games."

The panel finished up talking about how the in-game experience will never be duplicated by HDTV and that it is on the owners and teams to make sure people feel compelled to come out to games. It was a very entertaining panel with a good amount of back-and-forth. Mark Cuban was very impressive to me.

Other Stuff at the MIT Sloan Sports Analytics Conference

In addition to the panels, there were other events going on at the conference that were very engaging.

There was a research track where attendees could create papers and posters featuring revolutionary ideas in sports, such as:

• A new look at adjusted plus/minus for basketball analysis
• Forecasting performance of international players in the NBA
• Optimizing an NBA team's approach to free agency using a multiple-choice knapsack model (no, I still have no clue what that means)
• Evaluating basketball player performance via statistical network modelings

There were oral presentations given on:

• Flipping coins in the warm room: skill and chance in the draft
• Allocation and dynamic efficiency in NBA decision making
• How much trouble is early foul trouble?
• Moral hazard in long-term guaranteed contracts - theory and evidence from the NBA

There was also a trade show where entrepreneurs pitched sports-related products that ranged from an online program, StarStreet, where you can buy and sell virtual share of professional athletes using real money; GameSlam, where fans make real-time predictions of actions during live sporting events; and FAM Sports Training Optimizer, which is a tool to monitor neuromuscular loading and recovery non-invasively.

Most of these booths were giving out SWAG and I made sure to get as much of it as possible. My favorite piece of SWAG was a mini-football that the StarStreet booth gave out.

Wrapping Up: What I Learned From the Conference

I didn't know what to expect to get out of the Sloan Sports Conference. When I bought my ticket, I thought that there might be quite a bit of material from the conference that I wouldn't understand, but that it could be a good entry point to broaden my horizons. In actuality, most of the main panels did not talk about the kinds of complex analytics that I was expecting. The panels tended to focus on broader topics, while still incorporating some talk about how analytics can aid things like labor negotiations, the game experience and player performance.

Some have said that for this reason, the Sloan Sports Conference is no longer a conference on analytics. It's only a sports conference that has gone mainstream and that the organizers have sold out the mission in order to attrack a larger following.

In my opinion, that's not a bad thing. For someone like myself, I need an entry point to analytics. If people start talking about WAR, WinShares, and the details of statistical modeling, I would not have the necessary understanding. I would tune it out, and ultimately, would probably not be as willing to open my mind to analytics in the broader sense. By giving people like me an entry point, I will now start to learn more, and eventually, may start to understand the more complex analytics.

In the past, I had viewed analytis as a way of dominating the conversation about sports. After all, if every question can be boiled down to a stat, and every stat had a conclusive answer, discussion about sports would become meaningless since there would be nothing to debate. I don't reject statistical inference, but I have been - and still am - weary about using stats to fully explain and to try to fully understand a game with so many moving parts.

After listening to panels and talking with people at the Sloan Sports Conference, I'm starting to understand that analytics are not a final answer, they are just a way for fans to look at the sport from different angles. Rebounding rate might not, by itself, say who is the best rebounder, but when used as a piece of data in tandem with observation, it can help to reach a better conclusion, while still preserving the ability to debate that conclusion.

I believe I'll still always trust observation more than data, but at least now, I am not as opposed to looking at data in order to enhance those observations. I would recommend the Sloan Sports Conference to any sports fan, as it is definitely an unforgettable experience.